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INCOME TAXES | 12 Months Ended
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Sep. 30, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES: The income tax provision (benefit) consisted of the following:
| 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 2,897 |  |  | $ | 13,967 |  |  | $ | 13,481 |
State | 1,849 |  |  | 4,381 |  |  | 4,676 |
Foreign | 10,480 |  |  | 5,052 |  |  | 10,414 |
| 15,226 |  |  | 23,400 |  |  | 28,571 |
Deferred: |  |  |  |  |
Federal | (15,507) |  |  | (14,466) |  |  | (24,239) |
State | (2,372) |  |  | (1,887) |  |  | (3,895) |
Foreign | (7,344) |  |  | (5,273) |  |  | (4,828) |
| (25,223) |  |  | (21,626) |  |  | (32,962) |
Total | $ | (9,997) |  |  | $ | 1,774 |  |  | $ | (4,391) |
The reconciliation of the federal statutory tax rate to the consolidated effective tax rate was as follows:
| 2024 |  | 2023 |  | 2022
Federal statutory tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Effect of state income taxes, net of federal deduction | 1.3 | % |  | 3.8 | % |  | 0.2 | %
Foreign statutory taxes compared to federal statutory rate | 19.6 | % |  | (0.7) | % |  | 1.6 | %
Share-based compensation | (0.7) | % |  | 3.6 | % |  | (1.1) | %
Tax credits (net of withholding taxes) | 3.6 | % |  | (7.0) | % |  | 1.2 | %
Goodwill write-down | (4.9) | % |  | — | % |  | (11.2) | %
Nontaxable income | 5.0 | % |  | (7.5) | % |  | 0.8 | %
Nondeductible held-for-sale asset write-downs | (4.0) | % |  | — | % |  | — | %
Change in realizability of foreign deferred tax assets | (30.7) | % |  | (9.5) | % |  | (5.8) | %
Other | 4.2 | % |  | 0.6 | % |  | (2.5) | %
Effective tax rate | 14.4 | % |  | 4.3 | % |  | 4.2 | %
The Company's consolidated income taxes for the year ended September 30, 2024 were a benefit of $9,997, compared to an expense of $1,774 for fiscal 2023, and a benefit of $4,391 for fiscal 2022. The difference between the Company's consolidated income taxes for fiscal 2024 compared to fiscal 2023 partially resulted from the Company's fiscal 2024 pre-tax consolidated loss position compared to pre-tax consolidated income for fiscal 2023. The fiscal 2024 tax rate included charges related to changes in the realizability of foreign deferred tax assets. These changes included both current year foreign net operating losses requiring a full valuation allowance as well as other changes in realizability of certain foreign net operating losses from prior years. The fiscal 2024 consolidated loss before income taxes also reflected a goodwill write-down and write-down of certain net assets held-for-sale that were non-deductible for tax purposes. Additionally, the fiscal 2024 tax rate benefited from research and development and foreign tax credits. The fiscal 2023 effective tax rate benefited from research and development and foreign tax credits, and changes in realizability of foreign deferred tax assets due to the utilization of foreign tax net operating losses with a valuation allowance. The fiscal 2023 effective tax rate was negatively impacted by share-based compensation. The difference between the Company's consolidated income taxes for fiscal 2023 compared to fiscal 2022 partially resulted from fiscal 2023 having consolidated income before income taxes compared to fiscal 2022 having a consolidated loss before income taxes. The fiscal 2023 tax rate was negatively impacted by share-based compensation. Additionally, the fiscal 2023 tax rate benefited from research and development and foreign tax credits and the utilization of foreign tax net operating losses with a valuation allowance. The fiscal 2022 consolidated loss reflected a goodwill write-down recorded in the fourth quarter of fiscal 2022 that was primarily non-deductible. The fiscal 2022 effective tax rate also benefited from research and development and foreign tax credits. The fiscal 2022 effective tax rate was negatively impacted by foreign net operating losses requiring a full valuation allowance. The Company's foreign subsidiaries had losses before income taxes for the year ended September 30, 2024 of approximately $39,069, income before income taxes for the year ended September 30, 2023 of approximately $43,090 and losses before income taxes for the year ended September 30, 2022 of approximately $47,653. At September 30, 2024, undistributed earnings of foreign subsidiaries for which deferred income taxes have not been provided approximated $411,885. Deferred income taxes have not been provided on undistributed earnings of foreign subsidiaries since they have either been previously taxed, or are now exempt from tax, under the U.S. Tax Cuts and Jobs Act, or such earnings are considered to be reinvested indefinitely in foreign operations. A determination of the deferred tax liability to be recorded if the earnings were not permanently reinvested is not practicable. The components of deferred tax assets and liabilities at September 30, 2024 and 2023 are as follows:
| 2024 |  | 2023
Deferred tax assets: |  |  |
Pension and postretirement benefits | $ | 6,405 |  |  | $ | 5,544 |
Accruals and reserves not currently deductible | 16,992 |  |  | 11,158 |
Income tax credit carryforward | 5,563 |  |  | 4,970 |
Operating and capital loss carryforwards | 83,234 |  |  | 59,956 |
Stock options | 8,266 |  |  | 8,007 |
Research and development capitalization | 18,299 |  |  | 11,028 |
Operating lease liability | 15,833 |  |  | 18,795 |
Interest carryforward | 10,796 |  |  | 2,017 |
Other | 6,057 |  |  | 999 |
Total deferred tax assets | 171,445 |  |  | 122,474 |
Valuation allowances | (45,462) |  |  | (22,506) |
Net deferred tax assets | 125,983 |  |  | 99,968 |
Deferred tax liabilities: |  |  |
Depreciation | (25,724) |  |  | (23,547) |
Unrealized gains and losses | 21 |  |  | (2,969) |
Goodwill and intangible assets | (95,828) |  |  | (97,415) |
Revenue recognized over time | (27,467) |  |  | (21,226) |
Operating lease right-of-use assets | (15,282) |  |  | (18,153) |
Other | (843) |  |  | (5,644) |
Total deferred tax liabilities | (165,123) |  |  | (168,954) |
Net deferred tax liability | $ | (39,140) |  |  | $ | (68,986) |
At September 30, 2024, the Company had foreign net operating loss carryforwards of $394,576. The majority of the Company's foreign net operating losses have no expiration period. Certain of these carryforwards are subject to limitations on use due to tax rules affecting acquired tax attributes, loss sharing between group members, and business continuation. Therefore, the Company has established tax-effected valuation allowances against these tax benefits in the amount of $45,462 at September 30, 2024. The Company has recorded deferred tax assets of $2,710 for state net operating loss carryforwards, which will be available to offset future income tax liabilities. Changes in the total amount of gross unrecognized tax benefits (excluding penalties and interest) are as follows:
| 2024 |  | 2023 |  | 2022
Balance, beginning of year | $ | 3,779 |  |  | $ | 4,123 |  |  | $ | 2,807 |
Increases for tax positions of prior years | 378 |  |  | 100 |  |  | 1,393 |
Decreases for tax positions of prior years | — |  |  | — |  |  | (200) |
Increases based on tax positions related to the current year | 1,044 |  |  | 769 |  |  | 551 |
Decreases due to lapse of statute of limitation | (695) |  |  | (1,213) |  |  | (428) |
Balance, end of year | $ | 4,506 |  |  | $ | 3,779 |  |  | $ | 4,123 |
The Company had unrecognized tax benefits of $4,506 at September 30, 2024, which would impact the annual effective tax rate. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $2,815 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitation related to specific tax positions. The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $588 and $730 at September 30, 2024 and 2023, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions. The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitation expires for those tax jurisdictions. As of September 30, 2024, the tax years that remain subject to examination by major jurisdiction generally are:
United States - Federal | 2021 and forward
United States - State | 2020 and forward
Canada | 2020 and forward
Germany | 2019 and forward
United Kingdom | 2023 and forward
Australia | 2020 and forward
Singapore | 2020 and forward

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