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Income Taxes (Tables)
 12 Months Ended
Aug. 31, 2024
Income Tax Disclosure [Abstract]  
Income Tax Expense from Continuing Operations
Income tax expense from continuing operations is summarized as follows (in thousands):
 Year ended August 31,
 202420232022
Currently payable:
Federal$10,106 $5,181 $1,765 
Foreign11,599 9,240 7,824 
State1,172 319 164 
22,877 14,740 9,753 
Deferred:
Federal(1,086)(2,935)1,580 
Foreign2,630 3,806 (7,538)
State(1,109)(362)606 
435 509 (5,352)
Income tax expense$23,312 $15,249 $4,401 
Reconciliation of Income Taxes at Federal Statutory Rate to Effective Tax Rate A reconciliation of income taxes at the federal statutory rate to the effective tax rate is summarized in the following table:
 Year ended August 31,
 202420232022
Federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of Federal effect1.3 0.7 2.3 
Tax on foreign earnings (1)
4.2 6.0 1.3 
Foreign derived intangible income deduction(2.3)(3.1)(4.5)
Compensation adjustment2.0 1.5 6.6 
Impairment and other divestiture charges — — 1.1 
Valuation allowance additions and releases(4.1)(0.8)2.1 
Changes in liability for unrecognized tax benefits(1.3)(0.1)3.4 
Repatriation of foreign earnings1.6 — — 
Taxable liquidation of subsidiaries (2)
— 0.1 (11.4)
Foreign non-deductible expenses0.3 1.7 8.5 
Changes in tax rates— (2.0)(3.6)
Audits and adjustments (3)
0.4 (2.9)(6.7)
Research and development tax credit(0.6)(0.7)(2.5)
Other items(0.4)0.7 0.7 
Effective income tax rate22.1 %22.1 %18.3 %
(1) The Company generated $3.4 million, $2.6 million and $1.5 million of withholding tax and U.S. tax on non-U.S. earnings, net of foreign tax credits for fiscal 2024, 2023 and 2022, respectively.
(2) During fiscal 2022, the Company generated a net benefit of $2.7 million as a result of taxable liquidations of subsidiaries.
(3) During fiscal 2024, the Company generated a $0.4 million tax expense related to audits and adjustments as compared to a tax benefit of $2.0 million and $1.6 million for fiscal 2023 and 2022, respectively.
Temporary Differences and Carryforwards of Deferred Tax Assets and Liabilities
Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities include the following items (in thousands):
 August 31,
 20242023
Deferred income tax assets:
Operating loss and tax credit carryforwards$73,406 $70,933 
Compensation related liabilities4,440 7,372 
Postretirement benefits4,628 5,224 
Inventory977 1,715 
Lease liabilities8,063 8,594 
Research and development capitalization8,683 4,544 
Book reserves and other items5,096 6,548 
Total deferred income tax assets105,293 104,930 
Valuation allowance(57,743)(61,432)
Net deferred income tax assets47,550 43,498 
Deferred income tax liabilities:
Depreciation and amortization(25,920)(23,844)
Lease assets(7,918)(8,594)
Other items(2,716)(1,020)
Deferred income tax liabilities(36,554)(33,458)
Net deferred income tax asset (1)
$10,996 $10,040 
(1) The net deferred income tax asset is reflected on the balance sheet in two categories: an asset of $14.7 million and $15.7 million for fiscal 2024 and 2023, respectively, is included in "Other long-term assets" and a liability of $3.7 million and $5.7 million for fiscal 2024 and 2023, respectively, is included in "Deferred income taxes".
Changes in Gross Liability for Unrecognized Tax benefits, Excluding Interest and Penalties
Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands):
202420232022
Beginning balance$14,754 $15,380 $15,658 
Increases based on tax positions related to the current year1,771 279 433 
Increase for tax positions taken in a prior period201 — 1,084 
Decrease for tax positions taken in a prior period— (56)(57)
Decrease due to lapse of statute of limitations(3,054)(951)(1,271)
Decrease due to settlements— — (31)
Changes in foreign currency exchange rates41 102 (436)
Ending balance$13,713 $14,754 $15,380