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INCOME TAXES
 12 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of loss before income taxes are presented below:
Fiscal Year Ended
September 30,
202520242023
Loss before income taxes:
U.S.$(91,902)$(135,913)$(121,245)
Non-U.S.4,134 5,153 (2,997)
Total loss before income taxes$(87,768)$(130,760)$(124,242)
Significant components of the benefit for income taxes are presented below:
Fiscal Year Ended
September 30,
202520242023
Current:
Federal$319 $198 $4,490 
State and local242 5 967 
Foreign1,918 1,193 944 
Deferred:
Federal(18,517)(18,954)(20,560)
State and local(2,801)(4,019)(4,807)
Foreign(304)(298)(374)
Income tax benefit$(19,143)$(21,875)$(19,340)
The effective income tax rate on continuing operations varied from the statutory federal income tax rate as follows:
Fiscal Year Ended
September 30,
202520242023
Federal statutory income tax rate21.0 %21.0 %21.0 %
Increases (decreases):
State and local income taxes, net of Federal tax benefit, if applicable2.7 %3.2 %3.3 %
Goodwill— %— %(3.5)%
Impact of foreign operations(3.5)%(1.2)%(0.3)%
Sale of Israeli businesses— %— %(0.8)%
Fines and penalties— %(4.6)%— %
Other(2.0)%(0.8)%1.1 %
Valuation allowance changes3.6 %(0.9)%(5.2)%
Effective income tax rate21.8 %16.7 %15.6 %
Significant components of our deferred tax assets and liabilities are presented below as of the Company's fiscal year-end:

September 30, 2025September 30, 2024
Deferred tax assets:
Inventory$1,926 $1,009 
Allowance for credit losses1,628 1,676 
Domestic net operating loss carryforwards16,707 16,343 
Foreign net operating loss carryforwards7,736 10,170 
Foreign tax credit carryforwards4,632 3,861 
Capital loss carryforward1,833 1,870 
Stock compensation expense3,020 3,017 
Business interest limitation28,207 19,948 
Lease liabilities12,507 12,450 
Goodwill6,069 7,739 
Other466 194 
Total deferred tax assets84,731 78,277 
Deferred tax liabilities:
Prepaid expenses(617)(333)
Lease ROU assets(11,845)(12,123)
Accreted interest on convertible debt(3,707)(5,240)
Basis difference for property and equipment(11,179)(13,374)
Basis difference for intangible assets(49,533)(56,041)
Total deferred tax liabilities(76,881)(87,111)
Total net deferred tax liabilities7,850 (8,834)
Valuation allowance for net deferred tax assets(13,423)(18,207)
Net deferred tax liabilities$(5,573)$(27,041)
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, 2025, 2024 and 2023 was $5,991, $7,114 and $4,618, respectively, and the valuation allowance related to the Company's non-U.S. entities was $7,432, $11,093 and $11,757, respectively, as the Company does not believe that certain deferred tax assets will be realized in the foreseeable future. Payments made in fiscal years 2025, 2024 and 2023 for income taxes, net of refunds, amounted to $749, $1,843 and $7,146, respectively.

The cumulative undistributed earnings, projected as of September 30, 2025, of the Company’s non-U.S. subsidiaries, except the Deemed Repatriated Entities (as defined below), 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. 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. Further, the Company’s intent regarding repatriation of retained earnings at certain non-U.S. subsidiaries, Envigo RMS Sarl, Envigo RMS GmbH, and
Envigo RMS, S.L. (collectively, the "Deemed Repatriated Entities"), is primarily driven by a change in our transfer pricing policy. Since any such additional taxes would generally be limited to foreign withholding, the tax effect of currency gains and losses, capital gains and state taxes, any additional taxes due to a repatriation would be immaterial, Accordingly, no deferred tax liability has been recorded as of September 30, 2025.

At September 30, 2025, the Company had domestic net operating loss carryforwards for federal tax purposes of $48,827, all of which may be carried forward indefinitely. State and local loss carryforwards totaled approximately $129,411. The majority of these loss carryforwards expire from September 30, 2028 through 2044; however, approximately $39,969 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 $40,617, 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, 2025, there were no material uncertain tax positions based on any federal or state tax position.

The Company is no longer subject to U.S. Federal tax examinations for tax years before 2022 or state and local tax examinations for tax years before 2021, 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.