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Income Taxes
12 Months Ended
May. 31, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 10 Income Taxes

The Corporation had no federal and state income tax benefit for the years ended May 31, 2015 and 2014.

The difference between the Corporation’s statutory federal income tax rate of 34 percent in fiscal 2015 and 2014, and the effective income tax rate is due primarily to state income taxes and changes in deferred tax assets valuation allowance and are as follows:

 

     Year ended May 31,  
     2015     2014  
     (Dollars in thousands)  

Income taxes at statutory federal rate

   $ (1,424   $ (2,484

State income taxes

     (45     14   

State net operating loss

     (110     (296

New Energy Efficient Home Credit

     (134     (137

Increase in deferred tax assets valuation allowance

     1,570        2,862   

Other, net

     143        41   
  

 

 

   

 

 

 

Income tax benefit

   $      $   
  

 

 

   

 

 

 

Effective tax rate

     0     0
  

 

 

   

 

 

 

 

Components of the net deferred tax assets include:

 

     May 31,  
     2015      2014  
     (Dollars in thousands)  

Current deferred tax assets

     

Accrued marketing programs

   $ 144       $ 169   

Accrued warranty expense

     1,800         1,464   

Accrued workers’ compensation

     886         650   

Accrued vacation

     325         329   

Other

     522         223   
  

 

 

    

 

 

 

Gross current deferred tax assets

     3,677         2,835   
  

 

 

    

 

 

 

Noncurrent deferred tax assets

     

Liability for certain post-retirement benefits

     2,017         2,061   

Accrued warranty expense

     958         792   

Federal net operating loss carryforward

     33,120         30,488   

Federal tax credit carryforward

     1,501         1,345   

State net operating loss carryforward

     8,133         7,860   

Depreciation

     668         854   

Other

     (167      (32
  

 

 

    

 

 

 

Gross noncurrent deferred tax assets

     46,230         43,368   
  

 

 

    

 

 

 

Total gross deferred tax assets

     49,907         46,203   

Valuation allowance

     (49,907      (46,203
  

 

 

    

 

 

 

Net deferred tax assets

   $       $   
  

 

 

    

 

 

 

At May 31, 2015, the Corporation had gross federal net operating loss carryforwards of approximately $97 million and gross state net operating loss carryforwards of approximately $106 million. The federal net operating loss and tax credit carryforwards have a life expectancy between sixteen and twenty years. The state net operating loss carryforwards have a life expectancy, depending on the state where a loss was incurred, between five and twenty years. If the Corporation, after considering future negative and positive evidence regarding the realization of deferred tax assets, determines that a lesser valuation allowance is warranted, it would record a reduction to income tax expense and the valuation allowance in the period of determination.

Income tax returns are filed in the U.S. federal jurisdiction and in several state jurisdictions. For the majority of taxing jurisdictions the Corporation is no longer subject to examination by taxing authorities for years before 2011. The Corporation did not incur any interest or penalties related to income tax matters in fiscal years 2015 and 2014.

The Corporation has no unrecognized tax benefits in its financial statements during fiscal years 2015 and 2014, and does not expect any significant changes related to unrecognized tax benefits in the twelve months following May 31, 2015.