INCOME TAXES

4 Months Ended

Apr. 30, 2024

INCOME TAXES

INCOME TAXES

8. INCOME TAXES 

Provision for income taxes the four months ended April 30, 2024 and the three months ended March 31, 2023 consisted of the following (in thousands):

		Four Months Ended April 30, 2024			Three Months Ended March 31, 2023
Income before provision for income taxes	$	24,576		$	9,785
Provision for income taxes		6,799			1,507
Effective tax rate		27.7	%		15.4	%

Provision for income taxes for the four months ended April 30, 2024 and the three months ended March 31, 2023 resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate.

We provided no valuation allowance for federal deferred tax assets, whose future realization is more likely than not and continue to maintain full valuation allowance for certain state deferred tax assets in the United States as well as federal tax assets in Canada. Changes in provision for income taxes resulted primarily from the change in income from continuing operations across various tax jurisdictions.

In the event that we determine the deferred tax assets are realizable based on an assessment of relevant factors, an adjustment to the valuation allowance may increase income in the period such determination is made. The valuation allowance does not impact our ability to utilize the underlying net operating loss carryforwards. We also maintain liabilities for uncertain tax positions.

As of April 30, 2024, we had unrecognized tax benefits of approximately $7.6 million of which $7.1 million could be payable in cash. In addition, interest and penalty of $0.2 million could also be payable in cash in relation to unrecognized tax benefits. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $7.1 million. We account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect to have any significant changes to unrecognized tax benefits during the next twelve months.

As of April 30, 2024, we had net deferred income tax assets of $2.8 million. Because we have net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state, and foreign taxing authorities may examine our tax returns for all years from 2008 through the current period.