Income Taxes (Tables)

12 Months Ended

Jul. 31, 2015

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,
	2015		2014	2013
U.S.	$	33,425,000	36,885,000	28,930,000
Foreign	578,000		1,622,000	(1,437,000	)
	$	34,003,000	38,507,000	27,493,000

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,
	2015			2014		2013
Federal – current	$	12,367,000		11,629,000		7,129,000
Federal – deferred	(2,342,000		)	(368,000	)	385,000
State and local – current	931,000			1,623,000		1,393,000
State and local – deferred	(25,000		)	(33,000	)	35,000
Foreign – current	(173,000		)	506,000		48,000
Foreign – deferred	—			(1,000	)	695,000
	$	10,758,000		13,356,000		9,685,000

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,
	2015					2014				2013
	Amount			Rate		Amount		Rate		Amount		Rate
Computed “expected” tax expense	$	11,901,000		35.0	%	13,477,000		35.0	%	9,623,000		35.0	%
Increase (reduction) in income taxes resulting from:
State and local income taxes, net of Federal benefit	720,000			2.1		1,172,000		3.1		782,000		2.8
Nondeductible stock-based compensation	86,000			0.2		70,000		0.2		71,000		0.3
Domestic production activities deduction	(1,030,000		)	(3.0	)	(912,000	)	(2.4	)	(1,344,000	)	(4.9	)
Research and experimentation credits	(793,000		)	(2.3	)	(506,000	)	(1.3	)	(888,000	)	(3.2	)
Change in the beginning of the year valuation allowance for deferred tax assets	—			—		—		—		693,000		2.5
Audit settlements	—			—		—		—		(141,000	)	(0.5	)
Foreign income taxes	(372,000		)	(1.1	)	(62,000	)	(0.2	)	640,000		2.3
Other	246,000			0.7		117,000		0.3		249,000		0.9
	$	10,758,000		31.6	%	13,356,000		34.7	%	9,685,000		35.2	%

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, 2015 and 2014 are presented below.

	2015			2014
Deferred tax assets:
Allowance for doubtful accounts receivable	$	400,000		193,000
Inventory and warranty reserves	8,457,000			8,125,000
Compensation and commissions	1,712,000			1,716,000
State and foreign research and experimentation credits	4,223,000			3,383,000
Stock-based compensation	4,788,000			4,859,000
Other	2,338,000			2,520,000
Less valuation allowance	(4,442,000		)	(2,958,000	)
Total deferred tax assets	17,476,000			17,838,000
Deferred tax liabilities:
Plant and equipment	—			(486,000	)
Intangibles	(9,317,000		)	(10,322,000	)
Total deferred tax liabilities	(9,317,000		)	(10,808,000	)
Net deferred tax assets	$	8,159,000		7,030,000

Summary of unrecognized tax benefits

The following table summarizes the activity related to our unrecognized tax benefits for fiscal years 2015, 2014 and 2013 (excluding interest):

	2015			2014		2013
Balance at beginning of period	$	2,703,000		2,873,000		2,529,000
Increase related to current period	410,000			374,000		585,000
Increase related to prior periods	144,000			20,000		175,000
Expiration of statute of limitations	(468,000		)	(496,000	)	(207,000	)
Decrease related to prior periods	(61,000		)	(68,000	)	(209,000	)
Balance at end of period	$	2,728,000		2,703,000		2,873,000