Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of domestic and foreign income components

The following table presents the components of our income from continuing operations before income taxes, including inter-segment amounts:

	Fiscal Year Ended September 30,
	2020		2019		2018
	(in thousands)
Domestic*	$	(31,989)	$	(9,609)	$	28,645
Foreign	(38,106)		13,783		26,894
	$	(70,095)	$	4,174	$	55,539

*    Includes the majority of our corporate administrative costs. See Note 14 for information pertaining to segment contribution.

Components of income tax provision

The following table presents the significant components of the income tax provision:

	Fiscal Year Ended September 30,
	2020		2019		2018
	(in thousands)
Current:
Federal	$	(6,631)	$	431	$	(26)
State and foreign	10,544		704		9,288
	3,913		1,135		9,262
Deferred:
Federal*	(1,561)		(4,264)		9,498
State and foreign	(3,984)		5,535		(371)
	(5,545)		1,271		9,127
Total income tax (benefit) expense	$	(1,632)	$	2,406	$	18,389

*    The year ended September 30, 2018 includes a $2.1 million charge resulting from the remeasurement of our domestic net deferred tax assets based on the new corporate income tax rate as a result of the Tax Cuts and Jobs Act(“the Act”), as well as $2.6 million charge resulting from recording a valuation allowance against foreign tax credit carryforwards that do not meet the “more likely than not” threshold to be utilized as a result of tax law changes included in the Act.

Reconciliation of income taxes calculated at the statutory rate and the provision for income taxes

The following table presents a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes:

	Fiscal Year Ended September 30,
	2020			2019			2018
	(in thousands)
Income tax (benefit) expense at the federal statutory rate	$	(14,720)		$	878		$	13,623
State taxes, net of federal benefit	951			184			1,265
Mexico inflation adjustment	(1,120)			(801)			(936)
Non-deductible items	772			2,088			2,214
Tax credits	—			(551)			(615)
Foreign rate differential	(1,671)			1,080			1,405
Change in valuation allowance	962			1,601			3,986
Stock compensation	598			(711)			—
Uncertain tax positions	2,849			(1,596)			(4,808)
Change in tax rate resulting from enactment of the Act	—			—			2,558
Non-deductible impairment	9,093			—			—
Other	654			234			(303)
Total income tax (benefit) expense	$	(1,632)		$	2,406		$	18,389
Effective tax rate	2		%	58		%	33		%

Significant components of deferred tax assets and liabilities

The following table shows significant components of our deferred tax assets and liabilities:

	September 30,
	2020		2019
	(in thousands)
Deferred tax assets:
Cash Converters International	$	15,049	$	14,616
Tax over book inventory	9,737		6,858
Accrued liabilities	8,924		4,518
Pawn service charges receivable	1,019		1,699
Stock compensation	1,565		2,758
Foreign tax credit	1,696		2,638
State and foreign net operating loss carryforwards	15,990		15,806
Book over tax depreciation	4,651		2,659
Other	4,350		2,159
Total deferred tax assets before valuation allowance	62,981		53,711
Valuation allowance	(18,524)		(18,094)
Net deferred tax assets	44,457		35,617
Deferred tax liabilities:
Tax over book amortization	22,444		19,042
Note receivable discount	12,257		15,416
Prepaid expenses	1,349		1,146
Total deferred tax liabilities	36,050		35,604
Net deferred tax asset	$	8,407	$	13

Schedule of unrecognized tax benefits

The following table presents a rollforward of unrecognized tax benefits:

	Fiscal Year Ended September 30,
	2020		2019		2018
	(in thousands)
Beginning balance	$	1,435	$	3,091	$	6,530
Increase for tax positions taken during a prior period	1,401		—		963
Increase for tax positions taken during the current period	249		—		—
Decrease for tax positions as a result of the lapse of the statute of limitations	—		(1,656)		(4,402)
Ending balance	$	3,085	$	1,435	$	3,091