v3.4.0.3
INCOME TAXES:
|
12 Months Ended |
|
|---|
| INCOME TAXES: |
|
| INCOME TAXES: |
13.INCOME TAXES:
Total income tax expense (benefit) was allocated as follows (dollars in thousands):
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
Loss from continuing operations
|
|
$
|
(11,632
|
)
|
$
|
(14,805
|
)
|
$
|
12,040
|
|
|
Earnings from discontinued operations
|
|
3,598
|
|
11,973
|
|
17,587
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
Tax shortfall (excess tax benefits) from stock-based compensation
|
|
293
|
|
(4,645
|
)
|
(11,295
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(7,741
|
)
|
$
|
(7,477
|
)
|
$
|
18,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) attributable to loss from continuing operations consists of (dollars in thousands):
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
Current:
|
|
|
|
|
|
|
|
|
U.S. Federal
|
|
$
|
(2,410
|
)
|
$
|
(7,744
|
)
|
$
|
1,157
|
|
|
Non-U.S.
|
|
535
|
|
164
|
|
890
|
|
|
State
|
|
1,907
|
|
(2,260
|
)
|
(942
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
(9,840
|
)
|
1,105
|
|
|
|
|
|
|
|
|
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
U.S. Federal
|
|
(3,789
|
)
|
(1,064
|
)
|
2,421
|
|
|
Non-U.S.
|
|
(3,220
|
)
|
326
|
|
7,641
|
|
|
State
|
|
(4,655
|
)
|
(4,227
|
)
|
873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,664
|
)
|
(4,965
|
)
|
10,935
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(11,632
|
)
|
$
|
(14,805
|
)
|
$
|
12,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax attributable to U.S. and non-U.S. continuing operations consists of (dollars in thousands):
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
U.S.
|
|
$
|
(6,952
|
)
|
$
|
(24,459
|
)
|
$
|
872
|
|
|
Non-U.S.
|
|
(13,328
|
)
|
(16,888
|
)
|
(6,172
|
)
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(20,280
|
)
|
$
|
(41,347
|
)
|
$
|
(5,300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes, as shown above, are based on the location of the entity to which such earnings (loss) are attributable. However, since such earnings (loss) may be subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. may not correspond to the earnings (loss) shown above.
Below is a reconciliation of expected income tax benefit computed using the U.S. federal statutory income tax rate of 35% of loss before income taxes to actual income tax expense (benefit) from continuing operations (dollars in thousands):
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
Computed expected tax benefit
|
|
$
|
(7,098
|
)
|
$
|
(14,472
|
)
|
$
|
(1,855
|
)
|
|
Increase (reduction) in income taxes resulting from:
|
|
|
|
|
|
|
|
|
State income taxes, net of federal benefit
|
|
(1,796
|
)
|
(441
|
)
|
(371
|
)
|
|
Research and other tax credits
|
|
(4,027
|
)
|
(6,369
|
)
|
(5,251
|
)
|
|
Impairment of goodwill and intangibles
|
|
—
|
|
—
|
|
5,368
|
|
|
Share-based compensation
|
|
1,857
|
|
2,276
|
|
—
|
|
|
Non-U.S. subsidiaries taxed at other than 35%
|
|
2,468
|
|
4,354
|
|
5,875
|
|
|
Adjustment to valuation allowances
|
|
(3,585
|
)
|
(776
|
)
|
7,604
|
|
|
Other, net
|
|
549
|
|
623
|
|
670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(11,632
|
)
|
$
|
(14,805
|
)
|
$
|
12,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to changes in management’s assessment of the realizability of deferred tax assets in certain foreign jurisdictions, the Company released $3.6 million in valuation allowances in fiscal 2016 and increased valuation allowances by $7.6 million in fiscal 2014.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2016 and 2015 are presented below (dollars in thousands). In accordance with income tax accounting standards, as of March 31, 2016, the Company has not recognized deferred income taxes on approximately $12.7 million of undistributed earnings of foreign subsidiaries that are indefinitely reinvested outside the respective parent’s country. Calculation of the deferred income tax related to these earnings is not practicable.
|
|
|
2016
|
|
2015
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
Accrued expenses
|
|
$
|
11,525
|
|
$
|
10,041
|
|
|
Deferred revenue
|
|
1,612
|
|
2,715
|
|
|
Net operating loss and tax credit carryforwards
|
|
57,370
|
|
60,893
|
|
|
Share-based compensation
|
|
12,706
|
|
11,993
|
|
|
Other
|
|
5,242
|
|
6,838
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
88,455
|
|
92,480
|
|
|
Less valuation allowance
|
|
(46,602
|
)
|
(49,922
|
)
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
41,853
|
|
42,558
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
Intangible assets
|
|
$
|
(65,084
|
)
|
$
|
(75,104
|
)
|
|
Capitalized software costs
|
|
(14,143
|
)
|
(15,862
|
)
|
|
Property and equipment
|
|
(9,705
|
)
|
(6,651
|
)
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
(88,932
|
)
|
(97,617
|
)
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities
|
|
$
|
(47,079
|
)
|
$
|
(55,059
|
)
|
|
|
|
|
|
|
|
|
|
At March 31, 2016, the Company has net operating loss carryforwards of approximately $5.6 million and $70.9 million for U.S. federal and state income tax purposes, respectively. These net operating loss carryforwards expire in various amounts and will completely expire if not used by 2036. The Company has foreign net operating loss carryforwards of approximately $130.9 million. Of this amount, $130.0 million do not have expiration dates. The remainder expires in various amounts and will completely expire if not used by 2025. The Company has federal and state credit carryforwards of $3.5 million and $17.5 million, respectively, of which $0.9 million and $1.5 million, respectively, will be credited to additional paid-in capital when realized. Of the credits, $5.1 million will not expire. The remainder expires in various amounts and will completely expire if not used by 2036.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Based upon the Company’s history of profitability and taxable income and the reversal of taxable temporary differences in the U.S., management believes that with the exception of carryforwards in certain states it is more likely than not the Company will realize the benefits of these deductible differences. The Company has established valuation allowances against $6.0 million of deferred tax assets related to loss and credit carryforwards in the states where activity does not support the deferred tax asset.
Based upon the Company’s history of losses in certain non-U.S. jurisdictions, the Company has not recorded a benefit for current foreign losses in these jurisdictions. In addition, Management believes it is not more likely than not the Company will realize the benefits of certain foreign loss carryforwards and has established valuation allowances in the amount of $40.6 million against all of its foreign deferred tax assets in such jurisdictions. No valuation allowance has been established against deferred tax assets in non-U.S. jurisdictions in which historical profits and forecasted continuing profits exist. The earnings of subsidiaries in such jurisdictions and the differences in income taxes computed using the U.S. statutory tax rate and the effective tax rate in such jurisdictions are not significant.
The following table sets forth changes in the total gross unrecognized tax benefits for the fiscal years ended March 31, 2016, 2015 and 2014 (dollars in thousands):
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
Balance at beginning of period
|
|
$
|
9,711
|
|
$
|
2,457
|
|
$
|
3,646
|
|
|
Increases related to prior year tax positions
|
|
1,717
|
|
292
|
|
946
|
|
|
Decreases related to prior year tax positions
|
|
(1,227
|
)
|
(83
|
)
|
—
|
|
|
Increases related to current year tax positions
|
|
2,035
|
|
4,339
|
|
902
|
|
|
Increases resulting from acquisitions
|
|
—
|
|
2,887
|
|
—
|
|
|
Settlements with taxing authorities
|
|
(1,330
|
)
|
—
|
|
—
|
|
|
Lapse of statute of limitations
|
|
—
|
|
(181
|
)
|
(3,037
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
$
|
10,906
|
|
$
|
9,711
|
|
$
|
2,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The total amount of gross unrecognized tax benefits as of March 31, 2016 was $10.9 million, of which up to $8.8 million would reduce the Company’s effective tax rate in future periods if and when realized. The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. The combined amount of accrued interest and penalties related to tax positions on tax returns was approximately $0.3 million as of March 31, 2016. There was no material change in accrued interest and penalties during fiscal year 2016. The Company does not anticipate any reduction of unrecognized tax benefits within the next 12 months.
The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions. The Company’s subsidiaries also file tax returns in various foreign jurisdictions in which it operates. In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Company’s federal income tax returns for fiscal years subsequent to 2012. The status of state and local and foreign tax examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.
|
| X |
- DefinitionThe entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
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