XML 30 R17.htm IDEA: XBRL DOCUMENT
v3.23.3

Income Taxes | 12 Months Ended
--- | ---
Aug. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 7 – Income Taxes For financial reporting purposes earnings before income taxes include the following components:
|  | For the years ended August 31, |
($ in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
United States |  | $ | 40,066 |  |  | $ | 34,465 |  |  | $ | 28,605 |
Foreign |  |  | 60,309 |  |  |  | 53,403 |  |  |  | 21,781 |
|  | $ | 100,375 |  |  | $ | 87,868 |  |  | $ | 50,386 |
Significant components of the income tax provision are as follows:
|  | For the years ended August 31, |
($ in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 8,119 |  |  | $ | 5,678 |  |  | $ | 2,432 |
State |  |  | 1,690 |  |  |  | 1,310 |  |  |  | 733 |
Foreign |  |  | 18,187 |  |  |  | 17,474 |  |  |  | 2,738 |
Total current |  |  | 27,996 |  |  |  | 24,462 |  |  |  | 5,903 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (684 | ) |  |  | 244 |  |  |  | 2,251 |
State |  |  | (76 | ) |  |  | 34 |  |  |  | 281 |
Foreign |  |  | 760 |  |  |  | (2,341 | ) |  |  | (621 | )
Total deferred |  | — |  |  |  | (2,063 | ) |  |  | 1,911 |
Total income tax provision |  | $ | 27,996 |  |  | $ | 22,399 |  |  | $ | 7,814 |
Total income tax provision resulted in effective tax rates differing from that of the statutory United States federal income tax rates. The reasons for these differences are:
|  | For the years ended August 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
($ in thousands) |  | Amount |  |  | % |  |  | Amount |  |  | % |  |  | Amount |  |  | % |
U.S. statutory rate |  | $ | 21,079 |  |  |  | 21.0 |  |  | $ | 18,452 |  |  |  | 21.0 |  |  | $ | 10,581 |  |  |  | 21.0 |
State and local taxes, net of federal tax benefit |  |  | 1,259 |  |  |  | 1.3 |  |  |  | 1,069 |  |  |  | 1.2 |  |  |  | 859 |  |  |  | 1.7 |
Foreign tax rate differences |  |  | 6,017 |  |  |  | 6.0 |  |  |  | 3,318 |  |  |  | 3.8 |  |  |  | (390 | ) |  |  | (0.8 | )
U.S. tax reform |  |  | (103 | ) |  |  | (0.1 | ) |  |  | 313 |  |  |  | 0.4 |  |  |  | 339 |  |  |  | 0.7 |
Deferred tax asset valuation allowance |  |  | (610 | ) |  |  | (0.6 | ) |  | — |  |  | — |  |  |  | (2,169 | ) |  |  | (4.3 | )
Federal credits |  |  | (445 | ) |  |  | (0.4 | ) |  |  | (444 | ) |  |  | (0.6 | ) |  |  | (629 | ) |  |  | (1.2 | )
Uncertain tax benefits |  |  | (84 | ) |  |  | (0.1 | ) |  |  | (369 | ) |  |  | (0.4 | ) |  |  | (622 | ) |  |  | (1.2 | )
Capital gains |  |  | 529 |  |  |  | 0.5 |  |  | — |  |  | — |  |  | — |  |  | — |
Other |  |  | 354 |  |  |  | 0.3 |  |  |  | 60 |  |  |  | 0.1 |  |  |  | (155 | ) |  |  | (0.3 | )
Effective rate |  | $ | 27,996 |  |  |  | 27.9 |  |  | $ | 22,399 |  |  |  | 25.5 |  |  | $ | 7,814 |  |  |  | 15.5 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  | August 31, |
($ in thousands) |  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Accrued expenses |  | $ | 11,467 |  |  | $ | 12,569 |
Warranty |  |  | 3,433 |  |  |  | 3,336 |
Defined benefit pension plan |  |  | 1,253 |  |  |  | 1,391 |
Inventory |  |  | 2,749 |  |  |  | 2,544 |
Share-based compensation |  |  | 1,722 |  |  |  | 1,474 |
Vacation |  |  | 935 |  |  |  | 773 |
Net operating loss and capital loss carry forwards |  |  | 189 |  |  |  | 1,208 |
Deferred revenue |  |  | 1,379 |  |  |  | 1,422 |
Allowance for doubtful accounts |  |  | 1,338 |  |  |  | 1,122 |
Lease liabilities |  |  | 3,656 |  |  |  | 3,868 |
Capitalized research and development expenditures |  |  | 2,009 |  |  |  | — |
Other |  |  | 1,490 |  |  |  | 878 |
Gross deferred tax assets |  |  | 31,620 |  |  |  | 30,585 |
Valuation allowance |  |  | (491 | ) |  |  | (1,203 | )
Net deferred tax assets |  | $ | 31,129 |  |  | $ | 29,382 |
Deferred tax liabilities: |  |  |  |  |  |
Intangible assets |  | $ | (5,085 | ) |  | $ | (5,389 | )
Property, plant, and equipment |  |  | (12,718 | ) |  |  | (11,441 | )
Lease assets |  |  | (2,844 | ) |  |  | (2,999 | )
Derivative contract |  |  | (286 | ) |  |  | (1,294 | )
Total deferred tax liabilities |  | $ | (20,933 | ) |  | $ | (21,123 | )
Net deferred tax assets |  | $ | 10,196 |  |  | $ | 8,259 |
In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The discrete items recorded in both fiscal 2023 and 2022 were not significant. As of August 31, 2023, the Company had a valuation allowance of $0.5 million related to deferred tax assets in a jurisdiction where the Company does not expect to realize the deferred benefit. The Company also had recorded a valuation allowance of $0.8 million as of August 31, 2022 related to capital losses from business divestitures where the Company believes it is more likely than not that the benefit from the capital loss will not be realized. The remaining valuation allowance related to deferred tax assets in a certain foreign tax jurisdiction not subject to tax due to a free trade zone exemption. The Company does not intend to, and has not historically, repatriated earnings of its foreign subsidiaries. Thus, the Company has not provided a deferred income tax liability on these undistributed earnings that are indefinitely reinvested. The Company would recognize a deferred income tax liability if the Company were to determine that such earnings were no longer indefinitely reinvested. There are other taxes that may be incurred if the Company would repatriate earnings of its foreign subsidiaries. It is not practicable to estimate the amount of income taxes that would be incurred if the Company would repatriate earnings of its foreign subsidiaries. The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. A reconciliation of changes in unrecognized tax benefits is as follows:
|  | August 31, |
($ in thousands) |  | 2023 |  |  | 2022 |
Unrecognized tax benefits at beginning of the year |  | $ | 574 |  |  | $ | 724 |
Increases for positions taken in current year |  |  | 33 |  |  |  | 158 |
Decreases for positions taken in prior years |  |  | (15 | ) |  |  | — |
Reduction resulting from lapse of applicable statute of limitations |  |  | (144 | ) |  |  | (308 | )
Decreases for settlements with tax authorities |  |  | (48 | ) |  |  | — |
Unrecognized tax benefits at end of the year |  | $ | 400 |  |  | $ | 574 |
The net amount of unrecognized tax benefits at August 31, 2023 and 2022 that, if recognized, would impact the Company’s effective tax rate was $0.3 million and $0.5 million, respectively. The Company recognized $0.2 million and $0.4 million of interest and penalties recognized in the consolidated statement of earnings for the years ended August 31, 2023 and 2022, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Total accrued liabilities for interest and penalties included in the unrecognized tax benefits liability were $0.3 million and $0.4 million for each of the years ended August 31, 2023 and 2022, respectively. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months as a result of the expiration of statutes of limitations, the Company does not expect this change to have a significant impact on its results of operations or financial position. The Company files income tax returns in the United States and various state and foreign jurisdictions. The Company is no longer subject to income tax examination by US federal and most state tax authorities for tax years prior to fiscal 2020. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from three to six years.

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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration