Income Taxes (Tables)

12 Months Ended

May 31, 2025

Income Tax Disclosure [Abstract]

Earnings before Income Taxes

Earnings before income taxes for the prior three fiscal years included the following components:


		2025				2024				2023
U.S. based operations		$	132,160			$	107,643			$	149,670
Non – U.S. based operations			(3,351	)			(33,636	)			10,616
Earnings before income taxes			128,809				74,007				160,286
Plus: net loss attributable to noncontrolling interests (1)			1,083				263				-
Earnings before income taxes attributable to controlling interest		$	129,892			$	74,270			$	160,286

(1)

Net earnings attributable to noncontrolling interests are not taxable to us.

Components of Income Tax Expense (Benefit)

Significant components of income tax expense (benefit) for the three prior fiscal years were as follows:


		2025				2024				2023
Current
Federal		$	44,669			$	32,743			$	34,734
State and local			5,714				1,576				2,891
Foreign			1,894				1,666				3,988
Subtotal			52,277				35,985				41,613
Deferred
Federal			(14,775	)			(3,751	)			(4,427	)
State and local			(2,256	)			3,801				(1,943	)
Foreign			(1,407	)			2,992				(708	)
Subtotal			(18,438	)			3,042				(7,078	)
Total		$	33,839			$	39,027			$	34,535

Reconciliation of Federal Statutory Corporate Income Tax Rate to Total Tax Provision

A reconciliation of the federal statutory corporate income tax rate to total tax provision for the three prior fiscal years follows:


		2025				2024				2023
Federal statutory corporate income tax rate			21.0	%			21.0	%			21.0	%
State and local income taxes, net of federal tax benefit			1.8				3.5				0.6
Non-U.S. income taxes at other than federal statutory rate			0.8				0.5				0.7
Excess benefit related to share-based payment awards			(0.7	)			(2.7	)			(0.1	)
Non-deductible executive compensation			1.6				4.9				2.1
Research and development tax credit			-				(0.2	)			(0.8	)
Non-deductible spin-off transaction costs			-				7.5				-
Non-deductible note receivable impairment			0.8				3.2				-
Federal NOL deferred tax asset valuation allowance			1.3				-
FIN 48			(1.2	)			0.3				0.1
Tax impact of Sustainable Energy Solutions impairment and deconsolidation			-				11.1				-
Deferred state tax adjustment due to the Separation			-				4.2				-
Other			0.7				(0.7	)			(2.0	)
Effective tax rate attributable to controlling interest			26.1	%			52.6	%			21.5	%

The above effective tax rate attributable to controlling interest excludes any impact from the inclusion of net earnings attributable to noncontrolling interests in our consolidated statements of earnings. The effective tax rate upon inclusion of net earnings attributable to noncontrolling interests was 26.3% for fiscal 2025. Net earnings attributable to noncontrolling interests are primarily a result of our acquisition of Halo in fiscal 2024. The earnings attributable to the noncontrolling interests in Halo do not generate tax expense to us since the investors in Halo’s operations are taxed directly based on the earnings attributable to them.

Reconciliation of Unrecognized Tax Benefits

A tabular reconciliation of unrecognized tax benefits follows:


Balance at May 31, 2024		$	3,467
Increases - tax positions taken in prior years			-
Decreases - tax positions taken in prior years			(1,088	)
Increases - current tax positions			-
Settlements			-
Lapse of statutes of limitations			(553	)
Balance at May 31, 2025		$	1,826

Approximately $1,670 of the liability for unrecognized tax benefits is expected to be settled in the next twelve months due to the expiration of statutes of limitations in various tax jurisdictions and as a result of expected settlements with various tax jurisdictions. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, any such change is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

During the year, we filed an amended U.S. federal income tax return for fiscal year 2021 to carry back capital losses primarily generated as a result of the deconsolidation of our former Sustainable Energy Solutions segment. We have recognized an income tax receivable of approximately $15,374 related to the anticipated refund. Due to the size of the claim, the refund is subject to review by the Internal Revenue Service Joint Committee on Taxation.

Deferred Tax Assets and Liabilities

The components of our deferred tax assets and liabilities as of May 31 were as follows:


		2025				2024
Deferred tax assets
Accounts receivable		$	731			$	850
Note receivable			4,026				2,346
Inventories			3,821				3,616
Accrued expenses			14,926				13,238
NOL carry forwards			5,562				5,497
Stock-based compensation			3,694				3,508
Derivative contracts			1,818				303
Operating lease - ROU liability			3,663				4,595
Capital loss			-				10,110
Other			5,228				3,866
Total deferred tax assets			43,469				47,929
Valuation allowance for deferred tax assets			(10,477	)			(7,083	)
Net deferred tax assets			32,992				40,846
Deferred tax liabilities
Property, plant and equipment			(27,057	)			(28,770	)
Intangibles			(67,076	)			(72,898	)
Investment in affiliated companies, principally due to undistributed earnings			(17,069	)			(17,434	)
Operating lease - ROU asset			(3,544	)			(4,613	)
Other			(1,146	)			(1,281	)
Total deferred tax liability			(115,892	)			(124,996	)
Net deferred tax liability		$	(82,900	)		$	(84,150	)

At May 31, 2025, we had tax benefits for federal NOL carry forwards of $1,636, with no expiration date, tax benefits for state net NOL carry forwards of $3,926 that expire from fiscal 2026 to fiscal 2044.