Income Tax Matters (Tables)

12 Months Ended

Jul. 31, 2015

Deferred income tax assets and liabilities

The net deferred income tax amounts included in the accompanying consolidated balance sheets as of July 31, 2015 and 2014 include the following amounts as deferred income tax assets and liabilities (dollars in thousands):

	2015			2014
Deferred tax assets:
Accounts receivable	$	192		$	204
Inventories		1,111			1,002
Accrued liabilities		201			173
Deferred revenue		4,879			5,456
Other		465			172
Loss on foreign subsidiaries		2,370			1,720
Valuation allowance		(2,370	)		(1,720	)
		6,848			7,007
Deferred tax liability
Property and equipment		986			960
Other intangible assets		4,292			2,786
		5,278			3,746
	$	1,570		$	3,261

The deferred tax amounts noted above have been classified on the accompanying consolidated balance sheets as of July 31, 2015 and 2014, as follows (dollars in thousands):

	2015			2014
Current assets	$	2,346		$	2,042
Long-term asset					1,219
Long-term liability		(776	)		--
	$	1,570		$	3,261

Provision for income taxes

The provision for income taxes for the years ended July 31, 2015, 2014 and 2013, consisted of the following (dollars in thousands):

	2015		2014			2013
Current (receivable) payable	$	1,447	$	(338	)	$	1,179
Deferred		94		1,836			(49	)
	$	1,541	$	1,498		$	1,130

Reconciliation of income tax at statutory rate to effective rate

Reconciliation of the Company’s income tax at the statutory rate to the Company’s effective rate is as follows:

	2015			2014			2013
Computed at the statutory rate		34.0	%		34.0	%		34.0	%
State taxes, net of federal tax benefit		1.8			2.4			2.5
Foreign rate differential		(4.2	)		(3.2	)		--
Production deduction for domestic manufacturers		(2.7	)		(2.0	)		(4.3	)
State tax settlement		(3.7	)		--			--
Research and experimentation		(1.7	)		(1.6	)		(5.3	)
Other		2.1			3.2			3.7
		25.6	%		32.8	%		30.6	%