v3.26.3
INCOME TAXES
 12 Months Ended
Aug. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates includes the following components (in thousands):
Years Ended August 31,
202620252024
United States$120,680 $99,516 $60,697 
Foreign107,018 106,982 140,730 
Income from continuing operations before provision for income taxes and income of unconsolidated affiliates$227,698 $206,498 $201,427 
Significant components of the income tax provision are as follows (in thousands):
Year Ended August 31,
202620252024
Current:
U.S. Federal tax expense (benefit)$496 $(1,438)$(442)
U.S. State tax expense1,460 1,041 766 
Foreign tax expense68,536 63,197 66,377 
Total$70,492 $62,800 $66,701 
Deferred:
U.S. Federal tax benefit$(12,868)$(7,605)$(15,362)
U.S. State tax benefit(220)(281)(27)
U.S. valuation allowance change10,779 6,966 12,532 
Foreign tax benefit(7,197)(3,556)(1,904)
Foreign valuation allowance change126 293 678 
Total$(9,380)$(4,183)$(4,083)
Provision for income taxes$61,112 $58,617 $62,618 
Significant components of the Company’s effective tax rate as of August 31, 2026, 2025 and 2024 are shown below (in thousands):
Years Ended August 31,
202620252024
AmountPercentAmountPercentAmountPercent
US Federal Statutory Rate$47,816 21.0 %$43,365 21.0 %$42,300 21.0 %
State and Local Taxes Net of Federal (1)
1,240 0.5 %760 0.4 %739 0.4 %
Foreign Tax Effects
Costa Rica
Statutory tax rate difference vs U.S.3,710 1.6 %3,935 1.9 %3,997 2.0 %
Withholding taxes4,963 2.2 %3,894 1.9 %3,234 1.6 %
Other (2)
(1,205)(0.5)%(753)(0.4)%(968)(0.5)%
Guatemala
Withholding taxes5,682 2.5 %3,961 1.9 %4,363 2.2 %
Other (2)
409 0.2 %555 0.3 %436 0.2 %
Colombia
Withholding taxes3,780 1.7 %739 0.4 %1,676 0.8 %
Other (2)
1,785 0.8 %2,195 1.1 %1,471 0.7 %
Dominican Republic
Withholding taxes5,026 2.2 %4,021 1.9 %5,184 2.6 %
Other (2)
(425)(0.2)%871 0.4 %(487)(0.2)%
El Salvador
Withholding taxes2,395 1.1 %2,300 1.1 %2,585 1.3 %
Other (2)
1,447 0.6 %1,420 0.7 %1,499 0.7 %
Honduras
Withholding taxes1,923 0.8 %2,016 1.0 %2,252 1.1 %
Other (2)
1,910 0.8 %2,054 1.0 %1,475 0.7 %
Trinidad
Withholding taxes923 0.4 %827 0.4 %625 0.3 %
Other (2)
2,504 1.1 %1,414 0.7 %2,715 1.4 %
Nicaragua
Withholding taxes1,722 0.8 %1,597 0.8 %1,558 0.8 %
Other (2)
1,181 0.5 %1,175 0.5 %1,573 0.8 %
Panama
Withholding taxes2,328 1.0 %2,249 1.1 %2,616 1.3 %
Other (2)
175 0.1 %867 0.4 %627 0.3 %
Other Foreign Jurisdictions480 0.2 %1,051 0.5 %70 — %
Effects of Cross-Border Tax Laws (3)
Foreign-derived intangible income deduction (4)
(8,933)(3.9)%(9,083)(4.4)%(4,653)(2.3)%
Other1,729 0.8 %1,406 0.7 %— — %
Tax Credits
Foreign Tax Credits (5)
(27,665)(12.2)%(20,850)(10.1)%(23,668)(11.8)%
Other(444)(0.2)%(541)(0.3)%(242)(0.1)%
Changes in Valuation Allowances (6)
8,220 3.6 %6,183 3.0 %11,935 5.9 %
Nontaxable or Nondeductible Items(520)(0.2)%1,468 0.7 %114 0.1 %
Changes in Unrecognized Tax Benefits(607)(0.3)%(242)(0.1)%(314)(0.2)%
Other Adjustments(437)(0.2)%(237)(0.1)%(94)— %
Effective Tax Rate$61,112 26.8 %$58,617 28.4 %$62,618 31.1 %
(1)State taxes in Florida made up the majority (greater than 50 percent) of the tax effect in this category.
(2)Represents the combined tax effect of foreign exchange adjustments, changes in uncertain tax positions, return-to-provision true-ups, and other individually insignificant permanent items within each jurisdiction.
(3)The Company is subject to the Global Intangible Low-Taxed Income ("GILTI") tax rules. For fiscal years 2026, 2025, and 2024 the Company utilized foreign tax credits to offset GILTI tax liability.
(4)The Company claims a deduction on income earned by the U.S. parent from intangible assets and services utilized in its foreign operations, resulting in a preferential U.S. effective tax rate of approximately 13.1% on qualifying income versus the 21.0% statutory rate.
(5)The Company recognizes credits against its U.S. federal income tax liability for taxes paid to foreign jurisdictions on income earned by its international operations.
(6)The Company records a valuation allowance as the foreign tax credits generated exceed the U.S. income tax liability.
For fiscal year 2026, the effective tax rate was 26.8%. The decrease in the effective rate versus the prior year was primarily attributable to favorable tax contingency adjustments and tax credits recognized.
Cash paid for income taxes (net of refunds) is shown below (in thousands):
Years Ended August 31,
202620252024
Federal$2,629 $— $— 
State & local
Florida1,4251,350766 
Other231 
Foreign
Costa Rica26,12821,66019,236 
Colombia22,61313,29911,483 
Guatemala11,5979,1638,454 
Nicaragua8,3566,58711,931 
Honduras7,8825,9894,860 
El Salvador7,5897,3279,924 
Dominican Republic 6,6077,2869,034 
Trinidad4,7494,3957,722 
Panama4,6664,8186,264 
Other Foreign Jurisdictions1,6221,836965 
Total income taxes paid (net of refunds) (1)
$105,865 $83,713 $90,640 
(1)Cash paid for income taxes includes withholding taxes paid on intercompany transactions in foreign jurisdictions and in the United States.
Significant components of the Company’s deferred tax assets as of August 31, 2026 and 2025 are shown below (in thousands):
August 31,
20262025
Deferred tax assets:
Foreign tax credits$68,164 $59,286 
Accrued bonus3,610 2,872 
Deferred compensation3,495 2,826 
U.S. lease obligations2,882 3,022 
U.S. timing differences 8,464 7,302 
Foreign net operating losses6,211 4,693 
Foreign timing differences:
Lease obligations20,276 16,764 
Accrued expenses and other timing differences16,836 8,646 
Depreciation and amortization22,903 18,059 
Deferred income16,686 8,498 
Gross deferred tax assets169,527 131,968 
U.S. deferred tax liabilities (depreciation and other timing differences)(609)(877)
U.S. deferred tax liabilities (lease right-of-use assets)(2,693)(2,561)
Foreign deferred tax liabilities netted against deferred tax assets(13,535)(6,629)
Foreign deferred tax liabilities (lease right-of-use assets)(16,840)(13,940)
U.S. valuation allowance(70,515)(61,478)
Foreign valuation allowance(5,488)(5,254)
Net deferred tax assets$59,847 $41,229 
For fiscal year 2026, management concluded that a valuation allowance continues to be necessary for certain U.S. and foreign deferred tax assets primarily because of the existence of negative objective evidence, such as the fact that certain subsidiaries are in a cumulative loss position for the past three years, and the determination that certain net operating loss carryforward periods are not sufficient to realize the related deferred tax assets. The Company factored into its analysis the inherent risk of forecasting revenue and expenses over an extended period of time and also considered the potential risks associated with its business. The Company had net foreign deferred tax assets of $47.0 million and $30.8 million as of August 31, 2026 and 2025, respectively.
The Company does not provide for income taxes which would be payable if undistributed earnings of its foreign subsidiaries were remitted to the U.S. The Company considers earnings to be permanently reinvested for any jurisdiction where distribution from a foreign affiliate would cause additional tax cost, and management has no plans to repatriate the
related undistributed earnings and profits from these foreign affiliates.
The Company accrues for the estimated additional amount of taxes for uncertain income tax positions if the likelihood of sustaining the tax position does not meet the more likely than not standard for recognition of tax benefits. These positions are recorded as unrecognized tax benefits.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Years Ended August 31,
202620252024
Balance at beginning of fiscal year$2,668 $4,294 $4,745 
Gross increase - tax positions in prior period— — 11 
Gross decrease - tax positions in prior period(285)(3)— 
Additions based on tax positions related to the current year1,374 — 7 
Expiration of the statute of limitations for the assessment of taxes(2,464)(1,623)(469)
Balance at end of fiscal year$1,293 $2,668 $4,294 
As of August 31, 2026, the liability for income taxes associated with unrecognized tax benefits was $1.3 million and, if recognized, would favorably affect the Company's financial statements and favorably affect the Company's effective income tax rate.
The Company recognizes interest and/or penalties related to unrecognized tax benefits in income tax expense. As of August 31, 2026 and 2025, the Company had accrued an additional $1.7 million and $1.8 million, respectively, for the payment of interest and penalties related to the above-mentioned unrecognized tax benefits.
For the twelve-month periods ended August 31, 2026 and August 31, 2025, the Company recorded valuation allowances of $10.8 million and $7.0 million against our foreign tax credits, respectively. The foreign tax credit carry forwards are set to expire beginning in fiscal 2030.
The Company has various appeals pending before tax courts in its subsidiaries' jurisdictions. Any possible settlement could increase or decrease earnings but is not expected to be significant. Audit outcomes and the timing of audit settlements are subject to significant uncertainty.
Minimum tax rules, applicable in some of the countries where the Company operates, require the Company to pay taxes based on a percentage of sales if the resulting tax were greater than the tax payable based on a percentage of income (Alternative Minimum Tax or "AMT"). This can result in AMT payments substantially in excess of taxes the Company would expect to pay based on taxable income. As the Company believes that, in one country where it operates, it should only be ultimately liable for an income-based tax, it has accumulated income tax receivables of $10.2 million and $10.5 million and deferred tax assets of $4.4 million and $3.9 million as of August 31, 2026 and August 31, 2025, respectively, in this country.
While the rules related to refunds of income tax receivables in these countries are either unclear or complex, the Company has not placed any type of allowance on the recoverability of the remaining tax receivables, deferred tax assets or amounts that may be deemed under-paid, because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests and appeals of these rules.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in its major jurisdictions except for the fiscal years subject to audit as set forth in the table below:
Tax JurisdictionFiscal Years Subject to Audit
U.S. federal
2007, 2016* to 2018*, 2022*, 2023 to the present
California (U.S.) (state return)
 2022 to the present
Florida (U.S.) (state return)
2013* to 2018*, 2023 to the present
Aruba
2021 to the present
Barbados
2019 to the present
Costa Rica
2011 to 2012, 2015 to 2016, 2019 to 2020, 2022 to the present
Colombia
2019 to the present
Dominican Republic
2011 to 2012, 2016, 2021 to the present
El Salvador
2019, 2022 to the present
Guatemala
2012 to 2013, 2019, 2021 to the present
Honduras
 2021 to the present
Jamaica
2021 to the present
Mexico
2021 to the present
Nicaragua
2020 to the present
Panama
2023 to the present
Trinidad
 2016, 2020 to the present
U.S. Virgin Islands
2001 to the present
Spain
2022 to the present
*Aeropost only
Generally, for U.S. federal and U.S. Virgin Islands tax reporting purposes, the statute of limitations is three years from the date of filing of the income tax return. If and to the extent the tax year resulted in a taxable loss, the statute is extended to three years from the filing date of the income tax return in which the carryforward tax loss was used to offset taxable income in the carryforward year. Given the historical losses in these jurisdictions and the Section 382 change in control limitations on the use of the tax loss carryforwards, there is uncertainty and significant variation as to when a tax year is no longer subject to audit.