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Income Taxes (Tables) | 12 Months Ended
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May 31, 2023
Disclosure Text Block [Abstract] |
Income Before Income Taxes | Income before income taxes by source consists of the following amounts:
|  | Year ended May 31 |
|  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. |  | $ | (85,681 | ) |  | $ | 38,554 |  |  | $ | 55,753 |
Foreign |  |  | 63,639 |  |  |  | 21,653 |  |  |  | 19,515 |
|  | $ | (22,042 | ) |  | $ | 60,207 |  |  | $ | 75,268 |
Provision for Income Taxes | The provision for income taxes consists of the following:
|  | Year ended May 31 |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current |  |  |  |  |  |  |  |  |
Domestic |  |  |  |  |  |  |  |  |
Federal |  | $ | 8,674 |  |  | $ | 8,579 |  |  | $ | 6,981 |
Change in tax-related uncertainties |  |  | 278 |  |  |  | 3 |  |  |  | (75 | )
State |  |  | 1,616 |  |  |  | 2,406 |  |  |  | 2,147 |
Foreign |  |  | 9,490 |  |  |  | 5,140 |  |  |  | 4,875 |
Total Current |  |  | 20,058 |  |  |  | 16,128 |  |  |  | 13,928 |
Deferred |  |  |  |  |  |  |  |  |
Domestic |  |  |  |  |  |  |  |  |
Federal |  |  | (17,406 | ) |  |  | (3,721 | ) |  |  | 479 |
State |  |  | (1,865 | ) |  |  | (356 | ) |  |  | 44 |
Foreign |  |  | 41 |  |  |  | (151 | ) |  |  | (65 | )
Total Deferred |  |  | (19,230 | ) |  |  | (4,228 | ) |  |  | 458 |
Provision for Income Taxes |  | $ | 828 |  |  | $ | 11,900 |  |  | $ | 14,386 |
Reconciliation of Income Taxes Computed at U.S. Federal Statutory Tax Rate to Income Tax Expense | 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 |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Tax at U.S. statutory rate |  | $ | (4,629 | ) |  | $ | 12,643 |  |  | $ | 15,806 |
Permanent differences |  |  | 325 |  |  |  | 179 |  |  |  | 292 |
Global intangible low-taxed income (GILTI) |  |  | 6,482 |  |  |  | 1,501 |  |  |  | 2,064 |
Foreign derived intangible income deduction (FDII) |  |  | (643 | ) |  |  | (1,308 | ) |  |  | (1,210 | )
Foreign rate differential |  |  | (3,742 | ) |  |  | 215 |  |  |  | 669 |
Subpart F income |  |  | 152 |  |  |  | 397 |  |  |  | 628 |
Tax-effect from stock-based compensation |  |  | 1,946 |  |  |  | (462 | ) |  |  | (2,651 | )
Provision for state income taxes, net of federal benefit |  |  | 18 |  |  |  | 1,517 |  |  |  | 1,601 |
Non-deductible acquisition expenses |  |  | 7,187 |  |  |  | — |  |  |  | — |
Tax credits |  |  | (6,709 | ) |  |  | (2,527 | ) |  |  | (3,298 | )
Impact of tax rate changes |  |  | — |  |  |  | 583 |  |  |  | (75 | )
Change in tax-related uncertainties |  |  | 278 |  |  |  | 3 |  |  |  | 55 |
Changes in valuation allowances |  |  | 355 |  |  |  | 85 |  |  |  | — |
Research expenditures deduction |  |  | (365 | ) |  |  | (112 | ) |  |  | — |
Other |  |  | 173 |  |  |  | (814 | ) |  |  | 505 |
Income Tax Expense |  | $ | 828 |  |  | $ | 11,900 |  |  | $ | 14,386 |
Significant Components of Deferred Income Tax Liabilities and Assets | Significant components of our deferred income tax liabilities and assets are as follows:
|  | Year ended May 31 |
|  | 2023 |  |  | 2022 |
Deferred income tax liabilities |  |  |  |  |  |
Indefinite and long-lived assets |  | $ | (369,500 | ) |  | $ | (22,709 | )
Right of use asset |  |  | (1,834 | ) |  |  | (344 | )
Prepaid expenses |  |  | (1,480 | ) |  |  | (884 | )
|  |  | (372,814 | ) |  |  | (23,937 | )
Deferred income tax assets |  |  |  |  |  |
Interest expense not currently deductible |  |  | 5,782 |  |  |  | — |
Research and experimentation capitalization |  |  | 5,868 |  |  |  | — |
Stock options |  |  | 2,192 |  |  |  | 2,085 |
Inventories and accounts receivable |  |  | 3,219 |  |  |  | 2,044 |
Tax loss carryforwards |  |  | 3,909 |  |  |  | 561 |
Lease liability |  |  | 1,899 |  |  |  | 382 |
Accrued expenses and other |  |  | 1,981 |  |  |  | 2,422 |
|  |  | 24,850 |  |  |  | 7,494 |
Valuation allowance |  |  | (2,110 | ) |  |  | (568 | )
Net deferred income tax liabilities |  | $ | (350,074 | ) |  | $ | (17,011 | )
Net deferred income tax assets (jurisdictional) |  | $ | 3,353 |  |  | $ | 575 |
Net deferred income tax liabilities (jurisdictional) |  |  | (353,427 | ) |  |  | (17,586 | )
Net deferred income tax liabilities |  | $ | (350,074 | ) |  | $ | (17,011 | )
Summary of net operating loss carryforwards | The Company has the following net operating loss carryforwards:
|  | As of May 31, 2023 |  |  | Expiry
U.S. |  | $ | 218 |  |  | 2037
Foreign |  |  | 13,362 |  |  | 2024 to Indefinite
|  | $ | 13,580 |  |  |
Sumary of reconciliation of our tax contingencies | The reconciliation of our unrecognized tax benefits is as follows:
|  | Year ended May 31 |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Beginning balance |  | $ | 741 |  |  | $ | 764 |  |  | $ | 762 |
Increase/(decrease) related to prior periods |  |  | 2 |  |  |  | (75 | ) |  |  | (182 | )
Increase related to current period |  |  | 479 |  |  |  | 147 |  |  |  | 184 |
Lapses of applicable statute of limitations |  |  | (276 | ) |  |  | (95 | ) |  |  | — |
Ending balance |  | $ | 946 |  |  | $ | 741 |  |  | $ | 764 |

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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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