v3.26.3
Income Taxes
 12 Months Ended
Aug. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

Note 6 – Income Taxes

 

For financial reporting purposes, earnings before income taxes include the following components:

 

 

 

For the years ended August 31,

 

($ in thousands)

 

2026

 

 

2025

 

 

2024

 

United States

 

$

53,594

 

 

$

67,551

 

 

$

40,497

 

Foreign

 

 

21,721

 

 

 

27,032

 

 

 

38,553

 

Earnings before income taxes

 

$

75,315

 

 

$

94,583

 

 

$

79,050

 

 

 

Significant components of the income tax provision are as follows:

 

 

 

For the years ended August 31,

 

($ in thousands)

 

2026

 

 

2025

 

 

2024

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

(1,821

)

 

$

8,897

 

 

$

9,743

 

State

 

 

1,117

 

 

 

2,338

 

 

 

2,331

 

Foreign

 

 

9,462

 

 

 

10,729

 

 

 

4,614

 

Total current

 

 

8,758

 

 

 

21,964

 

 

 

16,688

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

8,673

 

 

 

(1,970

)

 

 

(2,310

)

State

 

 

418

 

 

 

(276

)

 

 

(370

)

Foreign

 

 

1,813

 

 

 

813

 

 

 

(1,215

)

Total deferred

 

 

10,904

 

 

 

(1,433

)

 

 

(3,895

)

Total income tax provision

 

$

19,662

 

 

$

20,531

 

 

$

12,793

 

 

Total income taxes paid (net of refunds) by jurisdiction for the fiscal year ended August 31, 2026 are as follows:

 

($ in thousands)

 

For the year ended August 31, 2026

 

U.S. federal (a)

 

$

8,912

 

Aggregated state and local

 

 

1,315

 

Foreign:

 

 

 

Australia

 

 

910

 

Brazil

 

 

1,406

 

China

 

 

1,197

 

France

 

 

1,788

 

Italy

 

 

2,027

 

Other

 

 

57

 

Total foreign

 

 

7,385

 

Total net income taxes paid

 

$

17,612

 

 

(a) Includes amounts paid to purchase transferable tax credits of $7.5 million during the fiscal year ended August 31, 2026.

 

 

 

 

 

 

 

 

 

 

 

Total income tax provision resulted in effective tax rates differing from that of the statutory United States federal income tax rates. For the fiscal year ended August 31, 2026, the reasons for these differences are as follows:

 

 

 

For the year ended August 31, 2026

 

($ in thousands)

 

Amount

 

 

%

 

U.S. statutory rate

 

$

15,816

 

 

 

21.0

 

State and local income tax, net of federal (national) income tax effect (a)

 

 

1,300

 

 

 

1.7

 

Foreign tax effects

 

 

 

 

 

 

   Brazil

 

 

 

 

 

 

      Interest on net equity deduction

 

 

(1,754

)

 

 

(2.3

)

      Foreign jurisdictional tax rate differences

 

 

1,313

 

 

 

1.7

 

      Dividend withholding tax

 

 

908

 

 

 

1.2

 

      Other

 

 

99

 

 

 

0.1

 

   China

 

 

 

 

 

 

      Dividend withholding tax

 

 

988

 

 

 

1.3

 

      Other

 

 

203

 

 

 

0.3

 

   Türkiye

 

 

 

 

 

 

      Free trade zone exception

 

 

(3,109

)

 

 

(4.0

)

      Dividend withholding tax

 

 

2,201

 

 

 

2.9

 

      Other

 

 

794

 

 

 

1.1

 

   Other foreign jurisdictions

 

 

862

 

 

 

1.1

 

Effect of changes in tax laws or rates enacted in the current period

 

—

 

 

—

 

Effect of cross-border tax laws

 

 

713

 

 

 

0.9

 

Tax credits

 

 

 

 

 

 

      Clean energy credits

 

 

(961

)

 

 

(1.3

)

      Other

 

 

(751

)

 

 

(1.0

)

Changes in valuation allowances

 

—

 

 

—

 

Nontaxable or nondeductible items

 

 

514

 

 

 

0.7

 

Changes in unrecognized tax benefits

 

—

 

 

—

 

Other

 

 

526

 

 

 

0.7

 

Effective tax rate

 

$

19,662

 

 

 

26.1

 

 

(a) State taxes in Nebraska, Kansas, Idaho, and Illinois made up the majority (greater than 50 percent) of the tax effect in this category.

 

Total income tax provision resulted in effective tax rates differing from that of the statutory United States federal income tax rates. For the fiscal years ended August 31, 2025 and August 31, 2024, the reasons for these differences are as follows:

 

 

 

For the years ended August 31,

 

 

 

2025

 

 

2024

 

($ in thousands)

 

Amount

 

 

%

 

 

Amount

 

 

%

 

U.S. statutory rate

 

$

19,863

 

 

 

21.0

 

 

$

16,601

 

 

 

21.0

 

State and local taxes, net of federal tax benefit

 

 

1,571

 

 

 

1.7

 

 

 

1,471

 

 

 

1.9

 

Foreign tax rate differences

 

 

(332

)

 

 

(0.4

)

 

 

1,658

 

 

 

2.1

 

NOLs

 

 

(242

)

 

 

(0.3

)

 

 

(1,349

)

 

 

(1.7

)

Federal credits

 

 

(1,691

)

 

 

(1.8

)

 

 

(1,256

)

 

 

(1.6

)

Uncertain tax benefits

 

 

(385

)

 

 

(0.4

)

 

 

(221

)

 

 

(0.3

)

International credits

 

—

 

 

—

 

 

 

(4,386

)

 

 

(5.5

)

Other

 

 

1,747

 

 

 

1.9

 

 

 

275

 

 

 

0.3

 

Effective rate

 

$

20,531

 

 

 

21.7

 

 

$

12,793

 

 

 

16.2

 

 

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)

 

2026

 

 

2025

 

Deferred tax assets:

 

 

 

 

 

 

Accrued expenses

 

$

8,357

 

 

$

10,430

 

Warranty

 

 

3,368

 

 

 

3,379

 

Defined benefit pension plan

 

 

922

 

 

 

988

 

Inventory

 

 

2,767

 

 

 

2,583

 

Share-based compensation

 

 

2,329

 

 

 

2,285

 

Vacation

 

 

1,650

 

 

 

1,473

 

Net operating loss and capital loss carry forwards

 

 

1,204

 

 

 

354

 

Deferred revenue

 

 

1,359

 

 

 

1,583

 

Allowance for doubtful accounts

 

 

1,689

 

 

 

1,721

 

Lease liabilities

 

 

4,116

 

 

 

3,679

 

Capitalized research and development expenditures

 

 

4,127

 

 

 

5,528

 

Net investment hedges

 

 

2,909

 

 

 

3,436

 

Clean energy credits

 

 

3,349

 

 

—

 

Other

 

 

1,155

 

 

 

1,838

 

Gross deferred tax assets

 

 

39,301

 

 

 

39,277

 

Valuation allowance

 

 

(529

)

 

 

(534

)

Net deferred tax assets

 

$

38,772

 

 

$

38,743

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible assets

 

$

(4,863

)

 

$

(4,767

)

Property, plant, and equipment

 

 

(13,000

)

 

 

(12,163

)

Lease assets

 

 

(3,398

)

 

 

(2,912

)

Accrued withholding tax

 

 

(1,056

)

 

 

(400

)

Total deferred tax liabilities

 

$

(22,317

)

 

$

(20,242

)

 

 

 

 

 

 

 

Net deferred tax assets

 

$

16,455

 

 

$

18,501

 

 

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. As of August 31, 2026 and 2025, 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 intends to reinvest earnings of its foreign subsidiaries to maintain sufficient working capital and other investment needs. Additional earnings are not considered permanently reinvested, and the Company will record a deferred tax liability associated with any withholding taxes when these earnings are generated. The deferred tax liability associated with such withholding taxes was $1.1 million of August 31, 2026. The Company continues to evaluate its global cash requirements and may adjust its reinvestment assertions in future periods based on changes in business strategy, cash requirements, or tax law.

 

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. The amount of unrecognized tax benefits at August 31, 2026 and 2025 did not have a material impact on the Company's consolidated financial statements. 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 2022. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from three to six years.