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Income Tax Expense
 12 Months Ended
Sep. 30, 2024
Income Tax Expense  
Income Tax Expense

5.      Income Tax Expense

The components of income before income taxes for 2024, 2023 and 2022 consisted of the following:

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

2024

    

2023

    

2022

United States

​

$

100,059

 

98,983

 

90,674

Foreign

​

 

29,830

 

19,964

 

15,761

Total income before income taxes

​

$

129,889

 

118,947

 

106,435

​

The principal components of income tax expense (benefit) for 2024, 2023 and 2022 consist of:

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

2024

    

2023

    

2022

Federal:

 

​

  

 

  

 

  

Current

​

$

25,681

 

24,192

 

7,248

Deferred

​

 

(7,670)

 

(5,816)

 

9,752

State and local:

​

 

​

 

​

 

​

Current

​

 

3,215

 

3,563

 

1,635

Deferred

​

 

(25)

 

(1,038)

 

1,774

Foreign:

​

 

​

 

​

 

​

Current

​

 

8,602

 

5,694

 

4,645

Deferred

​

 

(1,795)

 

(193)

 

(939)

Total

​

$

28,008

 

26,402

 

24,115

​

The actual income tax expense for 2024, 2023 and 2022 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows:

​

​

​

​

​

​

​

​

​

​

    

2024

    

2023

    

2022

 

Federal corporate statutory rate

    

21.0

%  

21.0

%  

21.0

%

State and local, net of Federal benefits

​

2.4

 

2.1

 

2.9

​

Impact of foreign operations

​

0.4

​

0.3

​

(0.3)

​

Federal research credit

​

(0.8)

​

(1.1)

​

(0.3)

​

Executive compensation

​

0.1

 

0.9

 

0.5

​

Valuation allowance

​

(0.3)

 

0.3

 

(0.3)

​

U.S. tax on GILTI

​

2.4

​

1.2

​

1.8

​

GILTI foreign tax credits

​

(2.0)

​

(0.9)

​

(1.5)

​

FDII deduction

​

(1.7)

​

(1.6)

​

(0.9)

​

Other, net

​

0.1

 

—

 

(0.2)

​

Effective income tax rate

​

21.6

%  

22.2

%  

22.7

%

​

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2024 and 2023 are presented below:

​

​

​

​

​

​

​

(Dollars in thousands)

    

2024

    

2023

Deferred tax assets:

 

​

  

 

  

Inventories

​

$

4,577

 

5,457

Pension and other postretirement benefits

​

 

460

 

658

Capitalized research and development expenditures

​

​

9,726

​

4,114

Lease liabilities

​

​

7,451

​

9,822

Net operating and capital loss carryforwards — domestic

​

 

544

 

553

Net operating loss carryforward — foreign

​

 

3,855

 

3,714

Other compensation-related costs and other cost accruals

​

 

10,305

 

8,691

State credit carryforward

​

 

1,601

 

2,249

Total deferred tax assets

​

 

38,519

 

35,258

​

​

 

​

 

​

Deferred tax liabilities:

​

 

​

 

​

ROU assets

​

​

(6,895)

​

(9,822)

Goodwill

​

 

(15,416)

 

(13,313)

Acquisition intangible assets

​

 

(66,986)

 

(61,187)

Depreciation, software amortization

​

 

(19,892)

 

(21,772)

Net deferred tax liabilities before valuation allowance

​

 

(70,670)

 

(70,836)

Less valuation allowance

​

 

(1,513)

 

(1,772)

Net deferred tax liabilities

​

$

(72,183)

 

(72,608)

​

We had a foreign net operating loss (NOL) carryforward of $13.8 million at September 30, 2024, which reflects tax loss carryforwards in Germany, Canada, Japan, and the United Kingdom. Approximately $11.7 million of the tax loss carryforwards have no expiration date while the remaining $2.1 million will expire between 2031 and 2042.We had deferred tax assets related to state NOL carryforwards of $0.5 million at September 30, 2024 which expire between 2025 and 2044. We also had state research and other credit carryforwards of $1.6 million of which $0.1 million expires in 2039. The remaining $1.5 million does not have an expiration date.

The valuation allowance for deferred tax assets as of September 30, 2024 and 2023 was $1.5 million and $1.8 million, respectively. The net change in the total valuation allowance for each of the years ended September 30, 2024 and 2023 was a decrease of $0.3 million and an increase of $0.6 million, respectively. In addition, we maintained a valuation allowance against state NOL carryforwards that are not expected to be realized in future periods of $0.5 million at September 30 of both 2024 and 2023. Lastly, we released a valuation allowance against foreign deferred tax assets of $0.3 million in the year ended September 30, 2024, which resulted in a valuation allowance against foreign deferred assets which may not be realized in future periods of $1.0 million and $1.3 million at September 30, 2024 and 2023, respectively.

As of September 30, 2024, the Company does not have any material unrecognized tax benefits.