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Income Tax Expense
 12 Months Ended
Sep. 30, 2025
Income Tax Expense  
Income Tax Expense

6.      Income Tax Expense

Total income tax expense (benefit) for the years ended September 30, 2025, 2024, and 2023 was allocated to income tax expense as follows:

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

2025

    

2024

    

2023

Income tax expense from continuing operations

​

$

36,554

​

28,325

​

24,684

Income tax expense (benefit) from discontinued operations

 

​

57,464

 

(317)

 

1,718

Total income expense

​

$

94,018

 

28,008

 

26,402

​

The components of income from continuing operations before income taxes for 2025, 2024 and 2023 consisted of the following:

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

2025

    

2024

    

2023

United States

​

$

121,169

 

101,123

 

90,404

Foreign

​

 

31,684

 

29,830

 

19,964

Total income before income taxes

​

$

152,853

 

130,953

 

110,368

​

The principal components of income tax expense (benefit) from continuing operations for 2025, 2024 and 2023 consist of:

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

    

2025

    

2024

    

2023

Federal:

 

​

  

 

  

 

  

Current

​

$

25,007

 

25,584

 

21,923

Deferred

​

 

(1,185)

 

(7,295)

 

(5,095)

State and local:

​

 

​

 

​

 

​

Current

​

 

3,935

 

3,212

 

3,304

Deferred

​

 

(228)

 

17

 

(950)

Foreign:

​

 

​

 

​

 

​

Current

​

 

13,109

 

8,602

 

5,694

Deferred

​

 

(4,084)

 

(1,795)

 

(192)

Total

​

$

36,554

 

28,325

 

24,684

​

The actual income tax expense from continuing operations for 2025, 2024 and 2023 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows:

​

​

​

​

​

​

​

​

​

​

    

2025

    

2024

    

2023

 

Federal corporate statutory rate

    

21.0

%  

21.0

%  

21.0

%

State and local, net of Federal benefits

​

2.3

 

2.5

 

2.1

​

Impact of foreign operations

​

1.1

​

0.4

​

0.3

​

Federal research credit

​

(1.1)

​

(0.8)

​

(0.9)

​

Executive compensation

​

0.9

 

0.2

 

1.1

​

Valuation allowance

​

(0.1)

 

(0.3)

 

0.3

​

U.S. tax on GILTI

​

2.5

​

2.4

​

1.3

​

GILTI foreign tax credits

​

(1.8)

​

(2.0)

​

(1.0)

​

FDII deduction

​

(1.1)

​

(1.7)

​

(1.7)

​

Other, net

​

0.2

 

(0.1)

 

(0.1)

​

Effective income tax rate

​

23.9

%  

21.6

%  

22.4

%

​

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2025 and 2024 are presented below:

​

​

​

​

​

​

​

(Dollars in thousands)

    

2025

    

2024

Deferred tax assets:

 

​

  

 

  

Inventories

​

$

5,589

 

4,663

Pension and other postretirement benefits

​

 

417

 

460

Capitalized research and development expenditures

​

​

14,648

​

9,726

Lease liabilities

​

​

8,571

​

7,183

Net operating and capital loss carryforwards — domestic

​

 

473

 

544

Net operating loss carryforward — foreign

​

 

3,855

 

3,855

Other compensation-related costs and other cost accruals

​

 

9,904

 

9,289

State credit carryforward

​

 

1,016

 

1,601

Total deferred tax assets

​

 

44,473

 

37,321

​

​

 

​

 

​

Deferred tax liabilities:

​

 

​

 

​

ROU assets

​

​

(8,906)

​

(6,627)

Goodwill

​

 

(15,904)

 

(13,353)

Acquisition intangible assets

​

 

(107,190)

 

(66,986)

Depreciation, software amortization

​

 

(20,359)

 

(17,079)

Net deferred tax liabilities before valuation allowance

​

 

(107,886)

 

(66,724)

Less valuation allowance

​

 

(1,347)

 

(1,513)

Net deferred tax liabilities

​

$

(109,233)

 

(68,237)

​

We had a foreign net operating loss (NOL) carryforward of $13.9 million at September 30, 2025, which reflects tax loss carryforwards in Germany, Canada, Japan, and the United Kingdom. Approximately $12.1 million of the tax loss carryforwards have no expiration date while the remaining $1.8 million will expire between 2031 and 2042.We had deferred tax assets related to state NOL carryforwards of $0.5 million at September 30, 2025 which expire between 2031 and 2045. We also had state research and other credit carryforwards of $1.0 million of which $0.1 million expires between 2035 and 2045. The remaining $0.9 million does not have an expiration date.

The valuation allowance for deferred tax assets as of September 30, 2025 and 2024 was $1.3 million and $1.5 million, respectively. The net change in the total valuation allowance for each of the years ended September 30, 2025 and 2024 was a decrease of $0.2 million and $0.3 million, respectively. In addition, we maintained a valuation allowance against state NOL carryforwards that are not expected to be realized in future periods of $0.4 million at September 30, 2025 and $0.5 million at September 30, 2024. Lastly, we released a valuation allowance against foreign deferred tax assets of $0.1 million in the year ended September 30, 2025, which resulted in a valuation allowance against foreign deferred assets which may not be realized in future periods of $0.9 million and $1.0 million at September 30, 2025 and 2024, respectively.

As of September 30, 2025, the Company does not have any material unrecognized tax benefits.