XML 38 R26.htm IDEA: XBRL DOCUMENT
v3.21.4

Income Taxes | 12 Months Ended
--- | ---
Nov. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes are as follows (in thousands):
| Fiscal Year Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2019
U.S. | $ | 80,508 |  |  | $ | 83,279 |  |  | $ | (11,778) |
Foreign | 15,026 |  |  | 13,356 |  |  | 40,273 |
Total | $ | 95,534 |  |  | $ | 96,635 |  |  | $ | 28,495 |
The provision for income taxes is comprised of the following (in thousands):
| Fiscal Year Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2019
Current: |  |  |  |  |
Federal | $ | 11,964 |  |  | $ | 12,294 |  |  | $ | 9,294 |
State | 2,602 |  |  | 3,871 |  |  | 1,862 |
Foreign | 3,456 |  |  | 3,370 |  |  | 5,808 |
Total current | 18,022 |  |  | 19,535 |  |  | 16,964 |
Deferred |  |  |  |  |
Federal | 366 |  |  | (1,613) |  |  | (12,191) |
State | (1,110) |  |  | (969) |  |  | (2,399) |
Foreign | (164) |  |  | (40) |  |  | (279) |
Total deferred | (908) |  |  | (2,622) |  |  | (14,869) |
Total | $ | 17,114 |  |  | $ | 16,913 |  |  | $ | 2,095 |
A reconciliation of the income taxes incurred at the U.S. Federal statutory rate compared to the effective tax rate is as follows (in thousands):
| Fiscal Year Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2019
Tax at U.S. Federal statutory rate | $ | 20,062 |  |  | $ | 20,293 |  |  | $ | 5,984 |
Foreign rate differences | 193 |  |  | (200) |  |  | (2,619) |
Effects of foreign operations included in U.S. Federal provision | (112) |  |  | (167) |  |  | 451 |
State income taxes, net | 1,215 |  |  | 2,087 |  |  | (918) |
Research credits | (410) |  |  | (905) |  |  | (1,086) |
Domestic production activities deduction | — |  |  | — |  |  | (248) |
Tax-exempt interest | — |  |  | (3) |  |  | (27) |
Nondeductible stock-based compensation | 1,548 |  |  | 422 |  |  | 1,043 |
Meals and entertainment | 61 |  |  | 162 |  |  | 198 |
Compensation subject to 162(m) | 346 |  |  | 324 |  |  | 422 |
Uncertain tax positions and tax settlements | 89 |  |  | 245 |  |  | (720) |
Net excess tax benefit or detriment from stock-based compensation plans | (11) |  |  | 61 |  |  | (103) |
Global intangible low tax inclusion | 606 |  |  | (307) |  |  | 2,100 |
Foreign derived intangible deduction | (6,386) |  |  | (5,297) |  |  | (2,300) |
Other | (87) |  |  | 198 |  |  | (82) |
Total | $ | 17,114 |  |  | $ | 16,913 |  |  | $ | 2,095 |
The effective income tax rate is based on the income for the year, the composition of the income in different countries, changes related to valuation allowances and adjustments, if any, for the potential tax consequences or benefits of audits or other tax contingencies. Our aggregate income tax rate in foreign jurisdictions is lower than our effective income tax rate in the United States. The majority of our income before provision for income taxes from foreign operations has been earned by our subsidiary in Bulgaria that is taxed at a 10% tax rate. Our United States income before provision for income taxes was at a deficit for fiscal year 2019 largely due to increased expense for amortization of acquired intangibles and due to an impairment expense of intangibles and long-lived assets. During the first quarter of fiscal year 2018, the Tax Cuts and Jobs Act (the "Act") was enacted in the United States. The Act reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018, moved to a territorial tax system and eliminated the domestic production activities deduction. Certain international provisions of the Act became effective in fiscal year 2019 for the Company. The global intangible low-taxed income ("GILTI") provisions require the Company to include in its U.S. income tax base foreign subsidiary earnings in excess of an allowable return of the foreign subsidiary's tangible assets. The components of deferred tax assets and liabilities are as follows (in thousands):
| November 30, 2021 |  | November 30, 2020
Deferred tax assets: |  |  |
Accounts receivable | $ | 143 |  |  | $ | 241 |
Accrued compensation | 4,407 |  |  | 2,861 |
Accrued liabilities and other | 2,898 |  |  | 4,430 |
Deferred revenue | 8,081 |  |  | 9,032 |
Stock-based compensation | 6,401 |  |  | 4,814 |
Original issue discount | 9,132 |  |  | — |
Tax credit and loss carryforwards | 35,376 |  |  | 42,189 |
Operating lease liabilities | 5,257 |  |  | 5,531 |
Gross deferred tax assets | 71,695 |  |  | 69,098 |
Valuation allowance | (7,315) |  |  | (9,876) |
Total deferred tax assets | 64,380 |  |  | 59,222 |
Deferred tax liabilities: |  |  |
Goodwill | (21,867) |  |  | (20,624) |
Right-of-use lease assets | (3,925) |  |  | (4,837) |
Deferred revenue | (1,483) |  |  | (3,027) |
Depreciation and amortization | (34,532) |  |  | (15,924) |
Prepaid expenses | (1,906) |  |  | (334) |
Notes payable | (13,415) |  |  | — |
Total deferred tax liabilities | (77,128) |  |  | (44,746) |
Total | $ | (12,748) |  |  | $ | 14,476 |
The valuation allowance primarily applies to net operating loss carryforwards and unutilized tax credits in foreign jurisdictions under conditions where realization is not more likely than not. The $2.6 million decrease in the valuation allowance during fiscal year 2021 primarily relates to losses in a foreign subsidiary that have expired prior to utilization. The $1.0 million increase in the valuation allowance during fiscal year 2020 primarily relates to the currency revaluation of foreign net operating losses which have a valuation allowance recorded against them. The $0.1 million increase in the valuation allowance during fiscal year 2019 primarily relates to acquired foreign net operating losses which have a valuation allowance recorded against them. At November 30, 2021, we have federal and foreign net operating loss carryforwards of $130.1 million expiring on various dates through 2036 and $26.6 million that do not expire. In addition, we have state net operating loss carryforwards of $49.7 million expiring on various dates through 2044 and a minimal amount that does not expire. At November 30, 2021, we have state tax credit carryforwards of approximately $3.7 million expiring on various dates through 2036 and $2.4 million that may be carried forward indefinitely. In addition, we have federal tax credit carryforwards of approximately $5.9 million expiring on various dates through 2039. It is our intention to indefinitely reinvest the earnings of our non-U.S. subsidiaries. We have not provided for U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries, which totaled $98.4 million as of November 30, 2021, as these earnings have been indefinitely reinvested. It is not practicable to determine the amount of the unrecognized deferred tax liability if the undistributed earnings were to be repatriated due to the complexity of the income tax laws and regulations and the effects of the Act. These earnings could be subject to non-U.S. withholding taxes and other federal, state and/or foreign taxes if they were remitted to the U.S. As of November 30, 2021, the total amount of unrecognized tax benefits was $5.5 million, of which $1.5 million was recorded in other noncurrent liabilities on the consolidated balance sheet and $4.0 million of deferred tax assets, principally related to U.S net operating loss carry-forwards and federal and state research and development tax credits, have not been recorded. A reconciliation of the balance of our unrecognized tax benefits is as follows (in thousands):
| Fiscal Year Ended
| November 30, 2021 |  | November 30, 2020 |  | November 30, 2019
Balance, beginning of year | $ | 6,219 |  |  | $ | 4,993 |  |  | $ | 5,787 |
Tax positions related to current period | 71 |  |  | — |  |  | — |
Tax positions related to a prior period | (820) |  |  | 539 |  |  | 110 |
Tax positions acquired | 439 |  |  | 1,596 |  |  | — |
Settlements with tax authorities | (168) |  |  | (12) |  |  | (181) |
Lapses due to expiration of the statute of limitations | (270) |  |  | (897) |  |  | (723) |
Balance, end of year | $ | 5,471 |  |  | $ | 6,219 |  |  | $ | 4,993 |
If recognized, all amounts of unrecognized tax benefits would affect the effective tax rate. We recognize interest and penalties related to uncertain tax positions as a component of our provision for income taxes. In fiscal year 2021 a net expense of $0.8 million was recorded to the provision for income taxes related to estimated interest and penalties. In fiscal years 2020 and 2019 there was a minimal amount of estimated interest and penalties recorded in the provision for income taxes. We have accrued $1.2 million and $0.4 million of estimated interest and penalties at November 30, 2021 and 2020, respectively. We do not expect any significant changes to the amount of unrecognized tax benefits in the next twelve months. Our federal income tax returns have been examined or are closed by statute for all years prior to fiscal year 2018. Our state income tax returns have been examined or are closed by statute for all years prior to fiscal year 2017, and we are no longer subject to audit for those periods. Tax authorities for certain non-U.S. jurisdictions are also examining tax returns and the Company does not expect the results of these examinations to be material to our consolidated balance sheets, cash flows or statements of income. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal year 2016.

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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration