Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.26.1
Income Taxes
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income taxes included in the consolidated income statement consisted of the following:
Year Ended March 31, 2026 Year Ended March 31, 2025 Year Ended March 31, 2024
Current provision:
Federal provision $ 4,275  $ 3,725  $ 5,643 
Foreign provision 13,625  12,795  11,315 
State provision 1,136  1,164  1,207 
Deferred provision:
Federal deferred provision (benefit) 1,180  252  (329)
Foreign deferred benefit (705) (1,426) (1,626)
State deferred provision (benefit) 144  94  (124)
Total provision for income taxes $ 19,655  $ 16,604  $ 16,086 
    Deferred income tax assets and liabilities were as follows:
March 31,
2026 2025
Deferred tax assets:
Accrued liabilities and reserves $ 8,938  $ 6,753 
Capitalized research and development costs 2,029  3,744 
Foreign deferred benefits 1,373  1,162 
Stock option compensation 1,010  886 
Net operating loss carryforward 1,006  428 
Inventories 1,139  801 
Capitalized transaction costs 343  373 
Tax credit carryforward 295  674 
Unrealized gain on hedge —  21 
Total deferred tax assets $ 16,133  $ 14,842 
Less valuation allowance (748) (553)
Deferred tax assets, net of valuation allowance $ 15,385  $ 14,289 
Deferred tax liabilities:
Intangible assets $ (6,632) $ (6,278)
Intangible and other - foreign (8,599) (9,632)
Property, plant and equipment (7,920) (5,546)
Prepaid expenses (333) (327)
Unrealized loss on hedge (58) — 
Undistributed foreign earnings (1,583) (1,367)
Total deferred tax liabilities $ (25,125) $ (23,150)
Net deferred tax liability $ (9,740) $ (8,861)
The Company expects that it is more likely than not that the results of future operations will generate sufficient taxable income to realize its domestic and foreign deferred tax assets, net of valuation allowance reserves.
    The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows:
Year Ended March 31, 2026 Year Ended March 31, 2025 Year Ended March 31, 2024
U.S. $ 19,050  $ 30,135  $ 28,065 
Non-U.S. 45,176  39,984  39,609 
Income from continuing operations $ 64,226  $ 70,119  $ 67,674 
The following table summarizes the jurisdictions in which the Company paid income taxes during the year ended March 31, 2026. Amounts represent cash income taxes paid, net of refunds, in each jurisdiction.
Jurisdiction Year Ended March 31, 2026
United States:
   Federal $ 4,111 
   State(1)
1,093 
      Total United States $ 5,204 
Foreign:
   Canada $ 10,774 
   All other foreign(2)
2,022 
      Total Foreign $ 12,796 
Total income taxes paid, net $ 18,000 
(1) No individual state tax exceeded 5% of total taxes paid.
(2) No individual foreign jurisdiction exceeded 5% of total, other than Canada.
The difference between the provision for income taxes and the amount that would result from applying the U.S. statutory tax rate to income before provision for income taxes is as follows:
Year Ended March 31, 2026 %
Statutory federal tax rate $ 13,487  21.0  %
Domestic tax effects:
Domestic state income taxes, net of federal effect (a) 1,034  1.7  %
Transaction costs 2,658 4.1  %
Non-deductible compensation 843 1.2  %
Change in valuation allowance (441) (0.7) %
Other, net (16) —  %
Foreign tax effects:
Canada:
Statutory income tax rate differential (2,114) (3.3) %
Regional income taxes 3,133  4.9  %
Withholding taxes 1,204  1.9  %
Other reconciling items 135  0.3  %
Italy 264  0.4  %
Other foreign jurisdictions 532  0.8  %
Effects of cross-border tax laws (572) (0.9) %
Tax credits (492) (0.8) %
$ 19,655  30.6  %
(a) State taxes in CA, GA, IL, LA, TN and TX made up the majority (greater than 50%) of the tax effect in this category.
The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended March 31, 2025 and 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:
Year Ended March 31, 2025 Year Ended March 31, 2024
Notional U.S. federal income tax expense at statutory rate $ 14,725  $ 14,252 
Adjustments to reconcile to the income tax provision:
Rate difference-international subsidiaries 1,252  482 
Withholding on intercompany dividends and income 1,726  — 
Charges/(benefits) related to uncertain tax positions (1,046) 84 
U.S. state income tax provision, net 994  912 
Undistributed foreign earnings 683  371 
Tax credits available in the U.S. (902) (425)
Change in valuation allowance 353  (37)
Russian loss not benefited —  207 
Non-deductible charges (39) 741 
Stock compensation (58) 178 
Impact of U.S. global intangible taxes and benefits (612) (560)
Other, net (472) (119)
Provision for income taxes $ 16,604  $ 16,086 
We operate in multiple international geographies. Our tax expense is reflective of the blended tax rate across those jurisdictions. We do not assert a permanent reinvestment position in any of our foreign subsidiaries. Accordingly, we expect to repatriate certain earnings that will be subject to withholding taxes. At March 31, 2026 we have accrued $1,583 as an additional deferred tax liability associated with the future repatriation of earnings from jurisdictions that withhold taxes on foreign paid dividends.
As of March 31, 2026, the Company had foreign tax net operating loss carry-forwards ("NOLs") of $3,831. Of this amount, $448 may be carried forward indefinitely. As of March 31, 2026, the tax years 2021 through 2025 remain open to examination by the major taxing jurisdictions to which we are subject.
During fiscal 2025, we released our reserves of $1,046 for uncertain tax position which consisted of positions related to the final Transition Tax, which is associated with the Tax Act of 2018. We released these reserves as they are no longer subject to examination by tax authorities.