XML 27 R13.htm IDEA: XBRL DOCUMENT
v3.21.2

Income Taxes | 12 Months Ended
--- | ---
May 31, 2021
Income Taxes |
6. | Income Taxes
Income before income taxes by source consists of the following amounts:
|  | Year ended May 31 |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
U.S. |  | $ | 55,753 |  |  | $ | 62,329 |  |  | $ | 58,479 |
Foreign |  |  | 19,515 |  |  |  | 9,976 |  |  |  | 14,480 |
|  | $ | 75,268 |  |  | $ | 72,305 |  |  | $ | 72,959 |
The provision for income taxes consists of the following:
|  | Year ended May 31 |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 6,981 |  |  | $ | 6,886 |  |  | $ | 7,173 |
Change in tax-related uncertainties |  |  | (75 | ) |  |  | 269 |  |  |  | 13 |
State |  |  | 2,147 |  |  |  | 1,262 |  |  |  | 1,265 |
Foreign |  |  | 4,875 |  |  |  | 2,475 |  |  |  | 3,758 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 479 |  |  |  | 1,964 |  |  |  | 1,031 |
State |  |  | 44 |  |  |  | 195 |  |  |  | 98 |
Foreign |  |  | (65 | ) |  |  | (221 | ) |  |  | (555 | )
Provision for Income Taxes |  | $ | 14,386 |  |  | $ | 12,830 |  |  | $ | 12,783 |
The reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax expense is as follows:
|  | Year ended May 31 |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Tax at U.S. statutory rate |  | $ | 15,806 |  |  | $ | 15,184 |  |  | $ | 15,321 |
Permanent differences |  |  | 292 |  |  |  | 360 |  |  |  | (56 | )
Global intangible low-taxed income (GILTI) |  |  | 2,064 |  |  |  | 438 |  |  |  | 840 |
Foreign derived intangible income deduction (FDII) |  |  | (1,210 | ) |  |  | (1,120 | ) |  |  | (1,531 | )
Foreign rate differential |  |  | 669 |  |  |  | (182 | ) |  |  | 495 |
Subpart F income |  |  | 628 |  |  |  | 634 |  |  |  | 842 |
Tax benefits on stock-based compensation |  |  | (2,651 | ) |  |  | (1,998 | ) |  |  | (2,586 | )
Changes in tax contingencies—Increase/(Release) |  |  | (76 | ) |  |  | 269 |  |  |  | 13 |
Provision for state income taxes, net of federal benefit |  |  | 1,601 |  |  |  | 1,412 |  |  |  | 1,251 |
Tax Credits |  |  | (3,298 | ) |  |  | (1,417 | ) |  |  | (1,726 | )
Other |  |  | 561 |  |  |  | (750 | ) |  |  | (80 | )
Tax Expense |  | $ | 14,386 |  |  | $ | 12,830 |  |  | $ | 12,783 |
Foreign tax credits, primarily offsetting taxes associated with Subpart F and GILTI income, were $2,753,000, $945,000 and $1,296,000 in fiscal years 2021, 2020 and 2019, respectively. The Company’s research and development credits were $545,000, $472,000 and $430,000 in fiscal years 2021, 2020 and 2019, respectively. Deferred income taxes reflect the 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 our deferred income tax liabilities and assets are as follows:
|  | Year ended May 31 |
(in thousands) |  | 2021 |  |  | 2020 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Indefinite and long-lived assets |  | $ | (25,072 | ) |  | $ | (20,867 | )
Prepaid expense s |  |  | (721 | ) |  |  | (795 | )
|  |  | (25,793 | ) |  |  | (21,662 | )
Deferred income tax assets |  |  |  |  |  |  |  |
Stock options |  |  | 1,106 |  |  |  | 1,479 |
Inventories and accounts receivable |  |  | 2,081 |  |  |  | 1,336 |
Tax loss carryforwards |  |  | 662 |  |  |  | 484 |
Accrued expenses and other |  |  | 568 |  |  |  | 657 |
Less: valuation allowances |  |  | (541 | ) |  |  | (419 | )
|  |  | 3,876 |  |  |  | 3,537 |
Net deferred income tax liabilities |  | $ | (21,917 | ) |  | $ | (18,125 | )
The Company has the following net operating loss carryforwards:
(in thousands) |  | As of |  |  |  |
Jurisdiction |  | 5/31/2021 |  |  | Expiry |
U.S. |  | $ | 345 |  |  |  | 2037 to indefinite |
Foreign |  |  | 1,938 |  |  |  | 2024 to 2039 |
|  | $ | 2,283 |  |  |  |  |
We are subject to income taxes in the U.S. (federal and state) and in numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for t a x-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumsta n ces, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The reconciliation of our tax-related uncertainties is as follows:
|  | Year ended May 31 |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Beginning balance |  | $ | 880 |  |  | $ | 611 |  |  | $ | 598 |
Increase/(decrease) related to prior periods |  |  | (272 | ) |  |  | 56 |  |  |  | (106 | )
Increase related to current perio d |  |  | 197 |  |  |  | 213 |  |  |  | 119 |
Ending balance |  | $ | 805 |  |  | $ | 880 |  |  | $ | 611 |
The Company is no longer subject to examination by the Internal Revenue Service for fiscal year 201 7 and preceding years.

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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration