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Income taxes
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9 Months Ended |
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Oct. 31, 2014
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| Income Tax Disclosure [Abstract] | |
| Income taxes | Income taxes The Company follows FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting, for the computation and presentation of its interim period tax provision. Accordingly, management estimated the effective annual tax rate and applied this rate to the year-to-date pre-tax book income to determine the interim provision for income taxes. For the three and nine months ended October 31, 2014, the Company recorded a provision for income taxes of $1.1 million and $5.0 million, respectively. The resulting effective tax rate was 26.5% and 36.5%, compared with an effective tax rate of 39.3% and 38.5% for the three and nine months ended October 31, 2013, respectively. For the three and nine months ended October 31, 2014, the net impact of discrete tax items caused a 12.1% and 3.1% decrease to the effective tax rate primarily due to the recognition of research and development tax credits, book stock compensation expense on stock options vesting upon the Company's initial public offering treated as a discrete event, and the impact of changes in estimated annual tax rates. For the three and nine months ended October 31, 2013, the net impact of discrete tax items was not significant. The effective tax rate decreased over the same period last year primarily due to discrete tax items, offset by an increase in permanent tax items in relation to income before income taxes, including expiration of the federal research and development tax credits as of December 31, 2013. As of October 31, 2014 and January 31, 2014, the Company’s total gross unrecognized tax benefit was $229,000 and $256,000, respectively. As a result of Accounting Standards Update No. 2013-11, certain unrecognized tax benefits have been netted against their related deferred tax assets. As a result, the unrecognized tax benefit recorded as of October 31, 2014 and January 31, 2014 was $53,000 and $47,000, respectively. Substantially all of the gross unrecognized tax benefit, if recognized, would affect the Company’s effective tax rate. The Company anticipates a decrease of $6,000 in total gross unrecognized tax benefits within 12 months of the reporting date related to an uncertain tax position on research and development credits claimed for which a lapse of the applicable statute of limitations is expected. The Company files income tax returns with U.S. federal and state taxing jurisdictions and is not currently under examination with any jurisdiction. The Company remains subject to examination by federal and various state taxing jurisdictions for tax years after 2003. |