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INCOME TAXES
 12 Months Ended
Mar. 31, 2025
INCOME TAXES [Abstract]  
INCOME TAXES
14. INCOME TAXES
 
We account for our tax positions in accordance with Codification Topic 740. Under the guidance, we evaluate uncertain tax positions based on the two-step approach. The first step is to evaluate each uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. For tax positions that are not likely of being sustained upon audit, the second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
 
As of March 31, 2025, and 2024, we do not have any unrecognized tax benefits for uncertain tax positions. We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense.
 
We file income tax returns, including returns for our subsidiaries, with federal, state, local, and foreign jurisdictions. The tax years ended March 31, 2024, March 31, 2023, and March 31, 2022, are subject to examination by federal and state taxing authorities.
A reconciliation of income taxes computed at the statutory federal income tax rate of 21.0% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):
 
                    
  Year Ended March 31,
  2025   2024   2023
Income tax expense computed at the US statutory federal rate
$ 31,256    $ 33,830    $ 34,224 
State income tax expense—net of federal benefit
  7,722      9,624      8,754 
Non-deductible executive compensation
  2,020      1,718      1,708 
Other
  (137)      145      (1,068) 
Provision for income taxes
$ 40,861    $ 45,317    $ 43,618 
Effective income tax rate
  27.5%     28.1%     26.8%
 
The components of the provision for income taxes are as follows (in thousands):
 
                    
  Year Ended March 31,
  2025   2024   2023
Current:
                  
Federal
$ 26,708    $ 34,232    $ 30,928 
State
  9,648      12,371      10,110 
Foreign
  1,092      1,370      499 
Total current expense
  37,448      47,973      41,537 
                    
Deferred:
                  
Federal
  3,141      (2,419)      1,301 
State
  127      (188)      970 
Foreign
  145      (49)      (190) 
Total deferred expense (benefit)
  3,413      (2,656)      2,081 
                    
Provision for income taxes
$ 40,861    $ 45,317    $ 43,618 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands):
 
 
March 31,
 
2025
  
2024
Deferred tax assets:
            
Accrued vacation
 $ 2,744    $ 2,666 
Deferred revenue
   7,108      6,934 
Allowance for credit losses
   1,745      1,278 
Restricted stock
   301      738 
Other deferred tax assets
   841      689 
Inventory reserve
   1,313      546 
Capitalized research expenditures
   1,666      502 
Accrued bonus
   2,708      2,641 
Lease liabilities
   5,067      4,503 
Other credits and carryforwards
   101      251 
Gross deferred tax assets
   23,594      20,748 
Less: valuation allowance
   (63)      (70) 
Net deferred tax assets
   23,531      20,678 
             
Deferred tax liabilities:
            
Property and equipment
   (2,516)      (2,724) 
Operating leases
   (7,804)      (3,889) 
Prepaid expenses
   (4,095)      (1,807) 
Right-of-use assets
   (4,714)      (4,113) 
Tax deductible goodwill
   (2,198)      (2,525) 
Total deferred tax liabilities
   (21,327)      (15,058) 
             
Net deferred tax asset
 $ 2,204    $ 5,620 
 
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. Based on this evaluation as of March 31, 2025, we are recognizing a valuation allowance to offset gross deferred tax assets primarily attributable to net operating losses at certain of the foreign subsidiaries and foreign tax credit carry forwards. We believe that it is more likely than not that we will realize the remaining gross deferred tax assets through generating taxable income or the reversal of existing temporary differences attributable to the gross deferred tax liabilities.