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Income Taxes
12 Months Ended
Apr. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act"). Among other provisions, the CARES Act makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. In addition, the Consolidated Appropriations Act (the "2021 Tax Act") enacted a temporary exception to the limitation for meals and entertainment paid or incurred after December 31, 2020. This and the CARES Act provisions applicable to the Company have been applied to the current year ending April 30, 2021.

Additionally, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (the "2020 Tax Act") was signed into law December 27, 2020 and provides a temporary exception to the 50% business deduction for certain business meals. The tax effects of the 2020 Tax Act to business meals are not significant and have been recognized in the current period.
Income tax expense was comprised of the following:
 FISCAL YEARS ENDED APRIL 30
(in thousands)202120202019
CURRENT    
Federal$25,683 $29,072 $25,649 
State5,639 7,581 8,231 
Foreign1,018 533 1,125 
Total current expense32,340 37,186 35,005 
DEFERRED   
Federal(11,426)(7,167)(4,498)
State(2,039)(4,190)(3,266)
Foreign(203)(142)(41)
Total deferred benefit (13,668)(11,499)(7,805)
Total expense 18,672 25,687 27,200 
Other comprehensive income (loss)(1,156)(573)190 
Total comprehensive income tax expense$17,516 $25,114 $27,390 

The Company's effective income tax rate varied from the federal statutory rate as follows: 
 FISCAL YEARS ENDED APRIL 30
 202120202019
Federal statutory rate21.0 %21.0 %21.0 %
Effect of:
Federal income tax credits(1.2)%(0.9)%(1.4)%
Stock compensation0.2 (0.1)(0.5)
Effect of 2017 Tax Act — (1.1)
Meals and entertainment0.1 0.3 0.3 
Valuation allowance for deferred taxes 0.7 0.6 
Foreign0.6 0.4 0.8 
Other0.2 0.7 1.2 
Total(0.1)%1.1 %(0.1)%
Effective federal income tax rate20.9 %22.1 %20.9 %
State income taxes, net of federal tax effect3.2 3.4 3.6 
Effective income tax rate24.1 %25.5 %24.5 %
The significant components of deferred tax assets and liabilities were as follows:
 APRIL 30
(in thousands)20212020
Deferred tax assets:  
Accounts receivable$1,781 $1,730 
Pension benefits815 — 
Inventory692 — 
Product liability1,321 862 
Employee benefits5,746 5,189 
Tax credit carryforwards5,433 4,995 
Operating leases32,975 33,258 
Other2,086 4,330 
Gross deferred tax assets, before valuation allowance50,849 50,364 
Valuation allowance(4,914)(4,415)
Gross deferred tax assets, after valuation allowance45,935 45,949 
Deferred tax liabilities:  
Inventory 125 
Depreciation22,116 24,147 
Intangibles29,123 40,677 
Operating leases31,320 32,325 
Other606 695 
Gross deferred tax liabilities83,165 97,969 
Net deferred tax liability$37,230 $52,020 

We have not recorded deferred income taxes applicable to undistributed earnings of foreign subsidiaries that are indefinitely reinvested in foreign operations. Undistributed earnings that are indefinitely reinvested in foreign operations are not significant as of April 30, 2021.

The Company recorded a valuation allowance related to deferred tax assets for certain state investment tax credit ("ITC") carryforwards and foreign tax credit ("FTC") carryforwards. Deferred tax assets are reduced by a valuation allowance when, after considering all positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The Company determined that there will not be sufficient foreign source income to fully utilize the current year and carry forward FTCs.  Therefore, the Company updated the valuation allowance for the current year activity of $0.5 million related to FTCs.
The gross amount of state tax credit carryforwards related to state ITCs as of April 30, 2021 and 2020 was $3.8 million and $3.9 million, respectively. These credits expire in various years beginning in fiscal 2028. Net of the federal impact and related valuation allowance, the Company recorded $0.5 million and $0.6 million of deferred tax assets related to these credits as of April 30, 2021 and 2020, respectively. The Company accounts for ITCs under the deferral method, under which the tax benefit from the ITC is deferred and amortized into income tax expense over the book life of the related property. As of April 30, 2021 and 2020, a deferred credit balance of $0.5 million and $0.8 million, respectively, is included in other liabilities on the consolidated balance sheets. 

The gross amount of foreign tax credit carryforwards as of April 30, 2021 and 2020 is $1.7 million and $1.2 million, respectively, which begin to expire in fiscal 2029.
The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state tax deductions:
 APRIL 30
(in thousands)20212020
 Change in Unrecognized Tax Benefits  
 Balance at beginning of year$2,305 $2,240 
 Additions based on tax positions related to the current year 115 65 
 Reductions for tax positions of prior years settlements(929)— 
 Balance at end of year$1,491 $2,305 
The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company has accrued a liability when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with accounting standards. As of April 30, 2021, federal tax years 2017 through 2020 remain subject to examination. The Company believes that adequate provisions have been made for all tax returns subject to examination. The Company is currently not under federal audit. If the liability for uncertain tax positions is released the entire amount would impact the Company's effective tax rate.