Income Taxes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Income Taxes
Income tax provisions for the Company's interim periods are based on the effective income tax rate expected to be applicable for the full year. The Company's consolidated income taxes for the first six months of fiscal 2026 represented an expense of $34,572, compared to a benefit of $5,086 for the first six months of fiscal 2025. The difference between the Company’s consolidated income taxes for the first six months of fiscal 2026 compared to the same period for fiscal 2025 resulted from consolidated pre-tax income in fiscal 2026 compared to a consolidated pre-tax loss in fiscal 2025, and net discrete tax expense related to the divestiture of the Company's warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses, partially offset by other net discrete tax benefits. The Company’s fiscal 2026 six month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses and discrete tax expense related to the divestiture of the Company's warehouse automation and European roto-gravure packaging and tooling and flexographic print businesses, partially offset by other net discrete tax benefits. The Company’s fiscal 2025 six month effective tax rate varied from the U.S. statutory tax rate of 21.0% primarily due to state taxes, tax credits, non-tax benefited foreign losses, and other net discrete tax benefits.
The Company had unrecognized tax benefits (excluding penalties and interest) of $2,897 and $2,972 on March 31, 2026 and September 30, 2025, respectively, which would impact the annual effective rate at March 31, 2026 and September 30, 2025, respectively. It is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $334 in the next 12 months primarily due to the completion of audits and the expiration of the statute of limitations.
The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $284 and $241 at March 31, 2026 and September 30, 2025, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions that were effective in 2025, and others implemented through 2027. The Company has evaluated the impact of the OBBBA, and does not expect the provisions of the new legislation will have a material impact on the Company's consolidated financial statements. The Company expects the provisions of the legislation will have a favorable impact on fiscal 2026 cash tax payments.
The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitations expires for those tax jurisdictions. As of March 31, 2026, the tax years that remain subject to examination by major jurisdictions generally are:
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