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Income Taxes
 12 Months Ended
Oct. 31, 2011
Income Taxes [Abstract]  
Income Taxes

10. Income Taxes

The income tax provision consists of the following for the years ended October 31 (in thousands):

 

                         
    2011     2010     2009  

Current:

                        

Federal

   $ 4,405     $ 7,988     $ 6,305  

State

     1,107       1,868       1,522  

Foreign

     (170 )      153       160  
   

 

 

    

 

 

    

 

 

  

Total current

     5,342       10,009       7,987  

Deferred

     1,907       1,332       290  
   

 

 

    

 

 

    

 

 

  

Total income tax provision

   $ 7,249     $ 11,341     $ 8,277  
   

 

 

    

 

 

    

 

 

  

At October 31, 2011 and 2010, gross deferred tax assets totaled approximately $2.7 million and $3.0 million, while gross deferred tax liabilities totaled approximately $8.8 million and $9.0 million. Deferred income taxes reflect the net of temporary differences between the carrying amount of assets and liabilities for financial reporting and income tax purposes.

Significant components of our deferred taxes assets (liabilities) as of October 31, are as follows (in thousands):

 

                 
    2011     2010  

Allowances for accounts receivable

   $ 564     $ 609  

Inventories

     435       662  

State taxes

     276       470  

Accrued liabilities

     861       595  
   

 

 

    

 

 

  

Current deferred income taxes

   $ 2,136     $ 2,336  
   

 

 

    

 

 

  

Property, plant, and equipment

     (5,258 )      (3,775 ) 

Intangible assets

     (312 )      (76 ) 

Unrealized gain, Limoneira investment

     (2,614 )      (4,586 ) 

Stock-based compensation

     183       125  

Other

     (1 )      46  
   

 

 

    

 

 

  

Long-term deferred income taxes

   $ (8,002 )    $ (8,266 ) 
   

 

 

    

 

 

  

 

A reconciliation of the significant differences between the federal statutory income tax rate and the effective income tax rate on pretax income for the years ended October 31, is as follows:

 

                         
    2011     2010     2009  

Federal statutory tax rate

     35.0 %      35.0 %      35.0 % 

State taxes, net of federal effects

     4.8       4.8       4.9  

Foreign income taxes greater (less) than U.S.

     (0.9 )      (0.9 )      (1.1 ) 

Other

     0.9       0.2       (1.0 ) 
   

 

 

    

 

 

    

 

 

  
      39.8 %      39.1 %      37.8 % 
   

 

 

    

 

 

    

 

 

  

We intend to reinvest our accumulated foreign earnings, which approximated $7.6 million at October 31, 2011, indefinitely. As a result, we have not provided any deferred income taxes on such unremitted earnings. For fiscal years 2011, 2010 and 2009, income before income taxes related to domestic operations was approximately $17.1 million, $28.3 million, and $21.0 million. For fiscal years 2011, 2010 and 2009, income before income taxes related to foreign operations was approximately $1.1 million, $0.7 million and $0.9 million.

As of October 31, 2011 and 2010, we provided a liability less than $0.1 million for unrecognized tax benefits related to various federal and state income tax matters. The tax effected amount would reduce our effective income tax rate if recognized.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

 

         

Balance at November 1, 2009

   $ 103  

Balance at October 31, 2010

     103  

Reductions of tax positions from prior years

     (62 ) 
   

 

 

  

Balance at October 31, 2011

   $ 41  
   

 

 

  

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. For fiscal 2011 and 2010, we did not record any significant accrued interest and penalties. We do not expect any unrecognized tax benefits to reverse in fiscal 2012.

We are subject to U.S. federal income tax as well as income of multiple state tax jurisdictions. We are no longer subject to U.S. income tax examinations for the fiscal years prior to October 31, 2008, and are no longer subject to state income tax examinations for fiscal years prior to October 31, 2007.