v3.26.1
Income Taxes
 12 Months Ended
Apr. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes - Income Taxes
The components of net income (loss) before income tax expense are as follows:
Years Ended April 30,
(In thousands)202620252024
Domestic$(107,981)$22,801 $(40,135)
Total$(107,981)$22,801 $(40,135)
The components of the provision for income taxes are as follows:
Years Ended April 30,
(In thousands)202620252024
Current expense (benefit):
Federal$3,985 $12,408 $9,453 
State84 3,123 3,312 
Total$4,069 $15,531 $12,765 
Deferred expense (benefit):
Federal$21,636 $(7,325)$(18,916)
State5,425 (3,337)(2,591)
Total$27,061 $(10,662)$(21,507)
Total income tax expense (benefit)$31,130 $4,869 $(8,742)
A reconciliation of the Company’s statutory income tax rate and effective tax rate is as follows:
Years Ended April 30,
202620252024
(In thousands, except for percentages of income before tax)AmountPercentAmountPercentAmountPercent
Pretax Income (Loss)$(107,981)$22,801 $(40,135)
US Federal Statutory Tax Rate(22,676)21.0 %4,788 21.0 %(8,428)21.0 %
State and Local Income Taxes, net of Federal benefit (1)
5,508 (5.1)%(966)(4.2)%(1,204)3.0 %
Tax Credits:
Federal Employment Credits(246)0.2 %173 0.8 %(63)0.2 %
Change in valuation allowance47,227 (43.7)%— — %— — %
Nontaxable or Nondeductible Items:
Section 162(m) limitation205 (0.2)%288 1.3 %405 (1.0)%
Related Finance Provision/(Benefit)(841)0.8 %1,083 4.8 %— — %
Other(85)0.1 %47 0.2 %(184)0.5 %
Other Adjustments:
True Ups2,038 (1.9)%(571)(2.5)%— — %
Other, net— — %26 0.1 %732 (1.8)%
Total$31,130 (28.8)%$4,869 21.4 %$(8,742)21.8 %
(1) State taxes in Arkansas, Alabama, and Oklahoma make up the majority (greater than 50%) of the tax effect in this category.
The components of the Company's deferred tax assets and liabilities are as follows:
As of April 30,
(In thousands)202620252024
Deferred tax assets:
Accrued liabilities$2,042 $2,188 $2,218 
Inventory172 183 152 
Share based compensation6,626 5,859 4,803 
Net operating loss carryforwards57,028 38,033 20,700 
Deferred revenue 8,360 9,536 4,030 
Other94 91 — 
Total deferred tax assets before valuation allowance$74,322 $55,890 $31,903 
Valuation Allowance(52,987)— — 
Total deferred tax assets after valuation allowance$21,335 $55,890 $31,903 
Deferred tax liabilities:
Finance Receivables(52,950)(59,714)(46,056)
Property and equipment(1,820)(2,760)(3,222)
Goodwill(772)(562)(426)
Interest expense limitation— — (7)
Total deferred tax liabilities$(55,542)$(63,036)$(49,711)
Net deferred tax assets (liabilities)$(34,207)$(7,146)$(17,808)
Net Operating Loss Carryforwards
As of April 30, 2026, the Company had $242.0 million of U.S. federal net operating loss carryforwards, which have an unlimited carryforward period. As of April 30, 2026, the Company had $146.4 million of state net operating loss carryforwards, that begin to expire at various dates starting in 2031.
The future realization of the tax benefits from existing temporary differences and tax attributes ultimately depends on the existence of sufficient taxable income. The Company assesses the realizability of its deferred tax assets at each balance sheet date. In assessing the realization of its deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers the projected future taxable income, expected reversal of existing deferred tax liabilities, and tax planning strategies in making this assessment. After consideration of all available evidence, both positive and negative, the Company determined that it is not more likely than not that its net deferred tax assets for its Colonial Auto Finance filing group will be realized in the foreseeable future. As a result, the Company recorded a valuation allowance on this group's net deferred tax assets of $53.0 million as of April 30, 2026.
Uncertain Tax Positions
The Company records uncertain tax positions as liabilities in accordance with ASC 740-10 and adjusts these liabilities when judgment changes as a result of the evaluation of new information not previously available. Since there is complexity in some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. The calculation and assessment of the Company's income tax exposures generally involves the uncertainties in the application of complex tax laws and regulations for federal and state jurisdictions. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon local tax examination including resolutions of any related appeals or litigation on the basis of the technical merits.
The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company's tax years are still open under statute from fiscal year 2022 to the present. The resolution of tax matters is not expected to have a material effect on the Company's Consolidated Financial Statements.
The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of April 30, 2026 and 2025, no accrued interest or penalties related to unrecognized tax benefits are included on the related tax liability line in the consolidated balance sheet.
Income Taxes Paid
The following summarizes the Company's income taxes paid (net of refunds received) for the years presented below:
Years Ended April 30,
(In thousands)202620252024
Federal$6,913 $8,908 $4,782 
State2,261 2,224 1,677 
Total$9,174 $11,132 $6,459 
The following summarizes the jurisdictions that exceeded 5% of the Company's total income taxes paid (net of refunds) for the years presented below:
Years Ended April 30,
(In thousands)202620252024
State:
Arkansas*$586 *
* Jurisdiction below the threshold for the period presented.