Income Taxes

9 Months Ended

May 31, 2025

Income Taxes

Income Taxes

Note 7.    Income Taxes

During the nine months ended May 31, 2025 and 2024, the Company recorded an income tax provision of $7,800,000 and $2,900,000, respectively, resulting in an effective tax rate of 25.3% and 25.2%, respectively. The provision for income taxes increased by $4,900,000 in the nine months period ended May 31, 2025 over the prior year period due to higher pre-tax income in the current period over the prior year period.

During the three months ended May 31, 2025 and 2024, the Company recorded an income tax provision of $3,200,000 and $362,000 respectively, resulting in an effective tax rate of 24.9% and 23.4%, respectively. The provision for income taxes increased by $2,800,000 in the three months period ended May 31, 2025 over the prior year period due to higher pre - tax income in the current period over the prior year period.

The current period effective tax rate differs from the statutory rate of 21% primarily due to the state tax rates and permanent book tax differences.

Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. For each of the three and nine months ended May 31, 2025 and 2024, the Company did not have a liability for any unrecognized tax benefit. The Company has elected to classify interest and penalties as a component of its income tax provision. For each of the three and nine months ended May 31, 2025 and 2024, the Company did not have a liability for penalties or interest. The Company does not expect any changes to its unrecognized tax benefit for the next three months that would materially impact its consolidated financial statements.