Income Tax Expense (Tables)

12 Months Ended

Sep. 30, 2018

Components Of Income From Continuing Operations Before Income Taxes

The components of income before income taxes for 2018, 2017 and 2016 consisted of the following:

(Dollars in thousands)	2018		2017		2016
United States	$	80,994		72,353		62,353
Foreign		7,029		7,800		6,067
Total income before income taxes	$	88,023		80,153		68,420

Principal Components Of Income Tax Expense (Benefit) From Continuing Operations

The principal components of income tax expense (benefit) for 2018, 2017 and 2016 consist of:

(Dollars in thousands)	2018			2017			2016
Federal:
Current	$	9,174			21,448			19,236
Deferred		(22,943	)		628			(909	)
State and local:
Current		2,121			1,795			1,674
Deferred		2,972			(49	)		(222	)
Foreign:
Current		2,233			4,450			1,899
Deferred		2,330			(1,822	)		860
Total	$	(4,113	)		26,450			22,538

Schedule Of Actual Income Tax Expense (Benefit) From Continuing Operations

The actual income tax expense (benefit) for 2018, 2017 and 2016 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows:

	2018			2017			2016
Federal corporate statutory rate		24.5	%		35.0	%		35.0	%
State and local, net of Federal benefits		3.0			2.4			2.0
Foreign		0.6			(0.1	)		(1.0	)
Research credit		(1.6	)		(1.1	)		(2.5	)
Domestic production deduction		(1.1	)		(2.7	)		(2.8	)
Change in uncertain tax positions		(0.1	)		–			–
Executive compensation		(0.1	)		(0.1	)		0.9
Valuation allowance		3.0			(0.3	)		1.8
Tax reform – impact on U.S. deferred tax assets and liabilities		(37.2	)		–			–
Tax reform – transition tax		1.5			–			–
Tax reform – taxes related to foreign unremitted earnings		2.8			–			–
Other, net		–			(0.1	)		(0.5	)
Effective income tax rate		(4.7	)%		33.0	%		32.9	%

Tax Effects Of Temporary Differences That Give Rise To Significant Portions Of The Deferred Tax Assets And Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2018 and 2017 are presented below:

(Dollars in thousands)	2018			2017
Deferred tax assets:
Inventories	$	5,834			9,639
Pension and other postretirement benefits		3,969			11,345
Net operating and capital loss carryforwards — domestic		639			501
Net operating loss carryforward — foreign		4,603			4,486
Foreign tax credit carryforward		2,377			–
Other compensation-related costs and other cost accruals		7,048			12,104
State credit carryforward		2,103			2,098
Total deferred tax assets		26,573			40,173

Deferred tax liabilities:
Goodwill		(969	)		(4,874	)
Acquisition assets		(62,841	)		(91,752	)
Depreciation, software amortization		(19,584	)		(24,092	)
Net deferred tax liabilities before valuation allowance		(56,821	)		(80,545	)
Less valuation allowance		(7,144	)		(4,440	)
Net deferred tax liabilities	$	(63,965	)		(84,985	)