Income Taxes

12 Months Ended

Aug. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 – Income Taxes

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

	For the years ended August 31,
($ in thousands)	2025		2024		2023
United States	$	67,551	$	40,497	$	40,066
Foreign		27,032		38,553		60,309
Earnings before income taxes	$	94,583	$	79,050	$	100,375

Significant components of the income tax provision are as follows:

	For the years ended August 31,
($ in thousands)	2025			2024			2023
Current:
Federal	$	8,897		$	9,743		$	8,119
State		2,338			2,331			1,690
Foreign		10,729			4,614			18,187
Total current		21,964			16,688			27,996
Deferred:
Federal		(1,970	)		(2,310	)		(684	)
State		(276	)		(370	)		(76	)
Foreign		813			(1,215	)		760
Total deferred		(1,433	)		(3,895	)	—
Total income tax provision	$	20,531		$	12,793		$	27,996

Total income tax provision resulted in effective tax rates differing from that of the statutory United States federal income tax rates. The reasons for these differences are:

	For the years ended August 31,
	2025						2024						2023
($ in thousands)	Amount			%			Amount			%			Amount			%
U.S. statutory rate	$	19,863			21.0		$	16,601			21.0		$	21,079			21.0
State and local taxes, net of federal tax benefit		1,571			1.7			1,471			1.9			1,259			1.3
Foreign tax rate differences		(332	)		(0.4	)		1,658			2.1			6,017			6.0
NOLs		(242	)		(0.3	)		(1,349	)		(1.7	)	—			—
U.S. tax reform	—			—			—			—				(103	)		(0.1	)
Deferred tax asset valuation allowance	—			—			—			—				(610	)		(0.6	)
Federal credits		(1,691	)		(1.8	)		(1,256	)		(1.6	)		(445	)		(0.4	)
Uncertain tax benefits		(385	)		(0.4	)		(221	)		(0.3	)		(84	)		(0.1	)
Capital gains	—			—			—			—				529			0.5
International credits	—			—				(4,386	)		(5.5	)	—			—
Other		1,747			1.9			275			0.3			354			0.3
Effective rate	$	20,531			21.7		$	12,793			16.2		$	27,996			27.9

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)	2025			2024
Deferred tax assets:
Accrued expenses		10,430		$	9,879
Warranty		3,379			3,432
Defined benefit pension plan		988			1,188
Inventory		2,583			2,825
Share-based compensation		2,285			1,920
Vacation		1,473			1,202
Net operating loss and capital loss carry forwards		354			1,264
Deferred revenue		1,583			1,329
Allowance for doubtful accounts		1,721			1,343
Lease liabilities		3,679			3,712
Capitalized research and development expenditures		5,528			3,867
Net investment hedges		3,436			41
Other		1,838			1,392
Gross deferred tax assets		39,277			33,394
Valuation allowance		(534	)		(534	)
Net deferred tax assets	$	38,743		$	32,860
Deferred tax liabilities:
Intangible assets	$	(4,767	)	$	(4,802	)
Property, plant, and equipment		(12,163	)		(11,398	)
Lease assets		(2,912	)		(2,907	)
Other		(400	)	—
Total deferred tax liabilities	$	(20,242	)	$	(19,107	)
Net deferred tax assets	$	18,501		$	13,753

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, 2025 and 2024, 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 is not significant as of August 31, 2025. 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, 2025 and 2024 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 2021. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from three to six years.