Income Taxes |
3 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Taxes [Abstract] | |
| Income Taxes |
13. Income Taxes
The Company recorded income tax expense of $3,369,000, or an effective tax rate of (33.5)%, and $2,425,000, or an effective tax rate of 44.4%, for the three months ended June 30, 2026 and 2025, respectively. The effective tax rate for the three months ended June 30, 2026 was primarily impacted by the change in valuation allowance on certain jurisdictions' deferred tax assets resulting from current year activities and foreign income taxed at rates that are different from the federal statutory rate.
Management continues to monitor its valuation allowance position in its various jurisdictions. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, past financial performance, and tax planning strategies. Based on this analysis, the Company determined that it is more likely than not that certain deferred tax assets will not be realized. As a result, the Company continued to maintain valuation allowances on its U.S., one of its Mexican subsidiaries’, and one of its Canadian subsidiaries’ deferred tax assets. The Company will monitor its position in future periods. Should the actual amount differ from the Company’s estimates, the amount of any valuation allowance could be impacted.
The Company and its subsidiaries file income tax returns for the U.S. federal, various state, and foreign jurisdictions with varying statutes of limitations. At June 30, 2026, the Company remains subject to examination for fiscal years ended March 31, 2023 and forward. At June 30, 2026, the Company continues to be under examination in the U.S. by the Internal Revenue Service for fiscal year 2024. The Company is not under examination in any another jurisdiction. The Company believes no significant changes in the unrecognized tax benefits will occur within the next 12 months.
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