XML 31 R33.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes (Tables)
 12 Months Ended
Jul. 31, 2014
Income Tax Disclosure [Abstract]  
Income before provision for income taxes
Income before provision for income taxes consists of the following:

 
 
Fiscal Years Ended July 31,
 
 
2014
 
2013
 
2012
U.S.
 
$
36,885,000

 
28,930,000

 
44,930,000

Foreign
 
1,622,000

 
(1,437,000
)
 
(890,000
)
 
 
$
38,507,000

 
27,493,000

 
44,040,000
Provision for income taxes
The provision for income taxes included in the accompanying consolidated statements of operations consists of the following:

 
 
Fiscal Years Ended July 31,
 
 
2014
 
2013
 
2012
Federal – current
 
$
11,629,000

 
7,129,000

 
14,389,000

Federal – deferred
 
(368,000
)
 
385,000

 
(4,194,000
)

State and local – current
 
1,623,000

 
1,393,000

 
2,045,000

State and local – deferred
 
(33,000
)
 
35,000

 
(380,000
)
 
 
 
 
 
 
 
Foreign – current
 
506,000

 
48,000

 
(240,000
)
Foreign – deferred
 
(1,000
)
 
695,000

 
4,000

 
 
$
13,356,000

 
9,685,000

 
11,624,000
Provision for income taxes differed from amounts computed by applying the U.S. Federal income tax rate
The provision for income taxes differed from the amounts computed by applying the U.S. Federal income tax rate as a result of the following:

 
 
Fiscal Years Ended July 31,
 
 
2014
 
2013
 
2012
 
 
Amount
 
Rate
 
Amount
 
Rate
 
Amount
 
Rate
Computed “expected” tax expense
 
$
13,477,000

 
35.0
 %
 
9,623,000

 
35.0
 %
 
15,414,000

 
35.0
 %
Increase (reduction) in income taxes resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

State and local income taxes, net of Federal benefit
 
1,172,000

 
3.1

 
782,000

 
2.8

 
995,000

 
2.3

Nondeductible stock-based compensation
 
70,000

 
0.2

 
71,000

 
0.3

 
86,000

 
0.2

Domestic production activities deduction
 
(912,000
)
 
(2.4
)
 
(1,344,000
)
 
(4.9
)
 
(1,436,000
)
 
(3.3
)
Research and experimentation credits
 
(506,000
)
 
(1.3
)
 
(888,000
)
 
(3.2
)
 
(241,000
)
 
(0.5
)
Change in the beginning of the year valuation allowance for deferred tax assets
 
—

 
—

 
693,000

 
2.5

 
—

 
—

Audit settlements
 
—

 
—

 
(141,000
)
 
(0.5
)
 
(2,841,000
)
 
(6.5
)
Foreign income taxes
 
(62,000
)
 
(0.2
)
 
640,000

 
2.3

 
99,000

 
0.2

Other
 
117,000

 
0.3

 
249,000

 
0.9

 
(452,000
)
 
(1.0
)
 
 
$
13,356,000

 
34.7
 %
 
9,685,000

 
35.2
 %
 
11,624,000

 
26.4
 %
Tax effects of temporary differences
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at July 31, 2014 and 2013 are presented below.

 
 
2014
 
2013
Deferred tax assets:
 
 
 
 
Allowance for doubtful accounts receivable
 
$
193,000

 
217,000

Inventory and warranty reserves
 
8,125,000

 
7,559,000

Compensation and commissions
 
1,716,000

 
1,705,000

State and foreign research and experimentation credits
 
3,383,000

 
2,736,000

Stock-based compensation
 
4,859,000

 
8,068,000

Other
 
2,520,000

 
2,478,000

Less valuation allowance
 
(2,958,000
)
 
(2,225,000
)
Total deferred tax assets
 
17,838,000

 
20,538,000

 
Deferred tax liabilities:
 
 

 
 

Plant and equipment
 
(486,000
)
 
(1,424,000
)
Intangibles
 
(10,322,000
)
 
(10,187,000
)
Total deferred tax liabilities
 
(10,808,000
)
 
(11,611,000
)
Net deferred tax assets
 
$
7,030,000

 
8,927,000
Summary of unrecognized tax benefits
The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2014 and 2013:

 
 
2014
 
2013
Balance at beginning of period
 
$
2,873,000

 
2,529,000

Increase related to current period
 
374,000

 
585,000

Increase related to prior periods
 
20,000

 
175,000

Expiration of statute of limitations
 
(496,000
)
 
(207,000
)
Decrease related to prior periods
 
(68,000
)
 
(209,000
)
Balance at end of period
 
$
2,703,000

 
2,873,000