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INCOME TAXES | 12 Months Ended
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Sep. 30, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of loss before income taxes are presented below:
| 2023 |  | 2022
Loss before income taxes: |  |  |
U.S. | $ | (121,245) |  |  | $ | (338,565) |
Non-U.S. | (2,997) |  |  | (13,884) |
Total loss before income taxes | $ | (124,242) |  |  | $ | (352,449) |
Significant components of our deferred tax assets and liabilities are as follows:
| As of September 30,
| 2023 |  | 2022
Deferred tax assets: |  |  |
Inventory | $ | 2,792 |  |  | $ | 1,461 |
Allowance for credit losses | 1,487 |  |  | 1,288 |
Accrued compensation and vacation | 515 |  |  | 2,574 |
Domestic net operating loss carryforwards | 8,813 |  |  | 8,837 |
Foreign net operating loss carryforwards | 11,302 |  |  | 8,276 |
Foreign tax credit carryforwards | 2,811 |  |  | 769 |
Unrealized foreign exchange | 400 |  |  | 1,191 |
Capital loss carryforward | 1,693 |  |  | — |
Stock compensation expense | 3,059 |  |  | 2,999 |
Business Interest Limitation | 10,615 |  |  | 3,137 |
Lease liabilities | 9,878 |  |  | 9,071 |
Goodwill | 9,468 |  |  | — |
Other | 356 |  |  | 608 |
Total deferred tax assets | 63,189 |  |  | 40,211 |
Deferred tax liabilities: |  |  |
Prepaid expenses | (643) |  |  | (483) |
Lease ROU assets | (9,511) |  |  | (8,941) |
Accreted interest on convertible debt | (7,170) |  |  | (8,586) |
Basis difference for property and equipment | (12,689) |  |  | (12,300) |
Basis difference for intangible assets | (66,865) |  |  | (76,307) |
Goodwill | — |  |  | (267) |
Total deferred tax liabilities | (96,878) |  |  | (106,884) |
Total net deferred tax liabilities | (33,689) |  |  | (66,673) |
Valuation allowance for net deferred tax assets | (16,375) |  |  | (10,354) |
Net deferred tax liabilities | $ | (50,064) |  |  | $ | (77,027) |
Significant components of the benefit for income taxes were as follows for the years ended September 30, 2023 and 2022:
| 2023 |  | 2022
Current: |  |  |
Federal | $ | 4,490 |  |  | $ | 61 |
State and local | 967 |  |  | 496 |
Foreign | 944 |  |  | 1,674 |
Deferred: |  |  |
Federal | (20,560) |  |  | (12,494) |
State and local | (4,807) |  |  | (4,911) |
Foreign | (374) |  |  | (13) |
Income tax benefit | $ | (19,340) |  |  | $ | (15,187) |
The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows:
| Fiscal Years Ended September 30
| 2023 |  | 2022
Federal statutory income tax rate | 21.0 | % |  | 21.0 | %
Increases (decreases): |  |  |
State and local income taxes, net of Federal tax benefit, if applicable | 3.3 | % |  | 2.6 | %
Loss on Fair Value Remeasurement of Embedded Derivative | — | % |  | (2.9) | %
Goodwill | (3.5) | % |  | (16.4) | %
Impact of foreign operations | (0.3) | % |  | 0.3 | %
Sale of Israel | (0.8) | % |  | — | %
Other | 1.1 | % |  | (0.7) | %
Valuation allowance changes | (5.2) | % |  | 0.4 | %
Effective income tax rate | 15.6 | % |  | 4.3 | %
U.S. GAAP requires that valuation allowances should be established against deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard. The Company assesses its deferred income taxes to determine if valuation allowances are required or should be adjusted. This assessment considers, among other matters, the nature, frequency and amount of recent losses, the duration of statutory carryforward periods, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. The Company’s U.S. tax reporting group has a cumulative three-year loss. The valuation allowance related to the Company’s U.S. tax reporting group as of September 30, 2023 and 2022 was $4,618 and $0, respectively, and the valuation allowance related to the Company's non-U.S. entities was $11,757 and $10,354, respectively, as the Company does not believe that certain deferred tax assets will be realized in the foreseeable future. Payments made in fiscal years 2023 and 2022 for income taxes, net of refunds, amounted to $7,146 and $479, respectively. The Company’s non-U.S. subsidiaries’ cumulative undistributed earnings, projected as of September 30, 2023, are considered to be indefinitely reinvested. Accordingly, no provision for U.S. federal and state income taxes or withholding taxes has been made in the accompanying consolidated financial statements. Further, a determination of the unrecognized deferred tax liability for the amount indefinitely reinvested is not practicable due to the complexities in the tax laws and assumptions we would have to make. As of November 5, 2021, with the acquisition of Envigo, the Company adopted an accounting policy regarding the treatment of taxes due on future inclusion of non-U.S. income in U.S. taxable income under the Global Intangible Low-Taxed Income provisions as a current period expense when incurred. Therefore, no deferred tax related to these provisions has been recorded as of September 30, 2023. At September 30, 2023, the Company had domestic net operating loss carryforwards for federal tax purposes of $23,927, all of which may be carried forward indefinitely. State and local loss carryforwards totaled approximately $67,591. The majority expire from September 30, 2028 through 2042; however, approximately $21,911 may be carried forward indefinitely, as they relate to states conforming to the provisions of the Tax Cuts and Jobs Act which allowed for an indefinite carryforward period of losses generated after December 31, 2017. The Company had non-U.S. net operating loss carryforwards of $44,412, which have been fully offset by valuation allowance. These losses may be carried forward indefinitely. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon regulatory examination based on the technical merits of the position. The amount of the benefit for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon ultimate settlement of the position. As of September 30, 2023, there were no material uncertain tax positions based on any federal or state tax position. In fiscal year 2022, the Company established an uncertain tax position of $1,861 in accordance with ASC 805-740 to directly offset acquired foreign net operating losses of $2,222 within the foreign net deferred tax liability. The position was settled during fiscal year 2023. The Company is no longer subject to U.S. Federal tax examinations for years before 2018 or state and local for years before 2017, with limited exceptions. For federal purposes, the tax attributes carried forward could be adjusted through the examination process and are subject to examination 3 years from the date of utilization.

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- Definition The 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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