XML 41 R22.htm IDEA: XBRL DOCUMENT
v3.20.2

Income Taxes | 12 Months Ended
--- | ---
Aug. 31, 2020
Income Taxes [Abstract] |
Income Taxes | Note 14. Income Taxes Income before income taxes consisted of the following (in thousands):
| Fiscal Year Ended August 31,
| 2020 |  | 2019 |  | 2018
United States | $ | 43,000 |  | $ | 47,962 |  | $ | 42,634
Foreign (1) |  | 32,515 |  |  | 32,808 |  |  | 32,544
Income before income taxes | $ | 75,515 |  | $ | 80,770 |  | $ | 75,178
(1)Included in these amounts are income before income taxes for the EMEA segment of $27.0 million, $26.6 million and $27.4 million for the fiscal years ended August 31, 2020, 2019 and 2018, respectively. The provision for income taxes consisted of the following (in thousands):
| Fiscal Year Ended August 31,
| 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |  |  |  |
Federal | $ | 7,267 |  | $ | 15,591 |  | $ | 10,100
State |  | 822 |  |  | 800 |  |  | 651
Foreign |  | 7,139 |  |  | 7,679 |  |  | 6,750
Total current |  | 15,228 |  |  | 24,070 |  |  | 17,501
Deferred: |  |  |  |  |  |  |  |
United States |  | (619) |  |  | 843 |  |  | (7,496)
Foreign |  | 196 |  |  | (51) |  |  | (42)
Total deferred |  | (423) |  |  | 792 |  |  | (7,538)
Provision for income taxes | $ | 14,805 |  | $ | 24,862 |  | $ | 9,963
‎ Deferred tax assets and deferred tax liabilities consisted of the following (in thousands):
| August 31, |  | August 31,
| 2020 |  | 2019
Deferred tax assets: |  |  |  |  |
Accrued payroll and related expenses | $ | 891 |  | $ | 794
Accounts receivable |  | 267 |  |  | 325
Reserves and accruals |  | 1,079 |  |  | 1,145
Stock-based compensation expense |  | 2,162 |  |  | 1,990
Lease Accounting |  | 828 |  |  | -
Uniform capitalization |  | 954 |  |  | 1,084
Tax credit carryforwards |  | 3,374 |  |  | 2,827
Other |  | 1,170 |  |  | 1,034
Total gross deferred tax assets |  | 10,725 |  |  | 9,199
Valuation allowance |  | (3,442) |  |  | (2,827)
Total net deferred tax assets |  | 7,283 |  |  | 6,372
Deferred tax liabilities: |  |  |  |  |
Property and equipment, net |  | (1,515) |  |  | (1,609)
Amortization of tax goodwill and intangible assets |  | (15,205) |  |  | (15,373)
Lease Accounting |  | (808) |  |  | -
Other |  | (582) |  |  | (675)
Total deferred tax liabilities |  | (18,110) |  |  | (17,657)
Net deferred tax liabilities | $ | (10,827) |  | $ | (11,285)
The Company had state net operating loss (“NOL”) carryforwards of $3.9 million and $4.8 million as of August 31, 2020 and 2019, respectively, which generated a net deferred tax asset of $0.3 million and $0.2 million as of August 31, 2020 and 2019, respectively. The state NOL carryforwards, if unused, will expire between fiscal year 2021 and 2040. The Company also had tax credit carryforwards of $3.4 million and $2.8 million as of August 31, 2020 and 2019, respectively, of which $3.2 million and $2.6 million, respectively, is attributable to U.K. tax credit carryforwards, which do not expire. Future utilization of the U.K. tax credit carryforwards and certain state credit carryforwards is uncertain and is dependent upon several factors that may not occur, including the generation of future taxable income in certain jurisdictions. At this time, management cannot conclude that it is “more likely than not” that the related deferred tax assets will be realized. Accordingly, a full valuation allowance has been recorded against the related deferred tax asset associated with the U.K. tax credit carryforwards and certain state carryforwards. A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows (in thousands):
| Fiscal Year Ended August 31,
| 2020 |  | 2019 |  | 2018
Amount computed at U.S. statutory federal tax rate | $ | 15,858 |  | $ | 16,962 |  | $ | 19,298
State income taxes, net of federal tax benefits |  | 853 |  |  | 963 |  |  | 453
Effect of foreign operations |  | 297 |  |  | 318 |  |  | (1,412)
Benefit from qualified domestic production deduction |  | - |  |  | - |  |  | (1,121)
Net benefit from GILTI/FDII |  | (1,582) |  |  | (1,404) |  |  | -
Tax Cuts and Jobs Act: |  |  |  |  |  |  |  |
Remeasurement of deferred income taxes |  | - |  |  | - |  |  | (6,762)
Toll tax, net of foreign tax credits |  | - |  |  | 8,665 |  |  | (282)
Benefit from stock compensation |  | (1,129) |  |  | (1,107) |  |  | (725)
Other |  | 508 |  |  | 465 |  |  | 514
Provision for income taxes | $ | 14,805 |  | $ | 24,862 |  | $ | 9,963
‎ The provision for income taxes was 19.6% and 30.8% of income before income taxes for the fiscal years ended August 31, 2020 and 2019, respectively. The decrease in the effective income tax rate from period to period was primarily due to the one-time uncertain tax position in the amount of $8.7 million associated with the Tax Cuts and Jobs Act mandatory one-time “toll tax” on unremitted foreign earnings that was recorded in the fourth quarter of fiscal year 2019. This resulted in a significantly higher fiscal year 2019 effective income tax rate compared to fiscal year 2020. In the fourth quarter of fiscal year 2020, the U.S. Treasury released regulations related to a High-Tax Exception for those jurisdictions subject to the Global Intangible Low Taxed Income (“GILTI”) tax. These newly released regulations resulted in an immaterial favorable impact to the fiscal year 2020 tax provision. Reconciliations of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands):
| Fiscal Year Ended August 31,
| 2020 |  | 2019
Unrecognized tax benefits - beginning of fiscal year | $ | 9,384 |  | $ | 1,038
Net increases (decreases) - prior period tax positions |  | - |  |  | 8,301
Net increases - current period tax positions |  | 230 |  |  | 210
Expirations of statute of limitations for assessment |  | (262) |  |  | (165)
Settlements |  | - |  |  | -
Unrecognized tax benefits - end of fiscal year | $ | 9,352 |  | $ | 9,384
Gross unrecognized tax benefits totaled $9.4 million for both the fiscal years ended August 31, 2020 and 2019, of which $9.2 million in both fiscal years would affect the Company’s effective income tax rate if recognized. Interest and penalties related to uncertain tax positions included in tax expense was $0.5 million and $0.4 million for fiscal year ending August 31, 2020 and 2019, respectively, primarily related to the toll tax liability reserve. The total balance of accrued interest and penalties related to uncertain tax positions was $1.0 million and $0.5 million for the fiscal years ended August 31, 2020 and 2019, respectively. The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes and closed audits, the Company’s federal income tax returns for years prior to fiscal year 2017 are not subject to examination by the U.S. Internal Revenue Service. The Company is currently under audit in various state jurisdictions for fiscal years 2016 through 2019. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2016 are no longer subject to examination. The Company has estimated that up to $0.4 million of unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months. Audit outcomes and the timing of settlements are subject to significant uncertainty.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration