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Income Taxes | 12 Months Ended
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Oct. 31, 2012
Income Taxes [Abstract] |
Income Taxes | 10. Income Taxes The income tax provision consists of the following for the years ended October 31 (in thousands):
|  | 2012 |  |  | 2011 |  |  | 2010 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 8,212 |  |  | $ | 4,405 |  |  | $ | 7,988 |
State |  |  | 1,233 |  |  |  | 1,107 |  |  |  | 1,868 |
Foreign |  |  | 2,428 |  |  |  | (170 | ) |  |  | 153 |
Total current |  |  | 11,873 |  |  |  | 5,342 |  |  |  | 10,009 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (214 | ) |  |  | 1,277 |  |  |  | 1,157 |
State |  |  | (559 | ) |  |  | 208 |  |  |  | 277 |
Foreign |  |  | (45 | ) |  |  | 422 |  |  |  | (104 | )
Total deferred |  |  | (818 | ) |  |  | 1,907 |  |  |  | 1,332 |
Total income tax provision |  | $ | 11,055 |  |  | $ | 7,249 |  |  | $ | 11,341 |
At October 31, 2012 and 2011, gross deferred tax assets totaled approximately $3.6 million and $2.7 million, while gross deferred tax liabilities totaled approximately $12.1 million and $8.8 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):
|  | 2012 |  |  | 2011 |
Allowances for accounts receivable |  | $ | 714 |  |  | $ | 564 |
Inventories |  |  | 483 |  |  |  | 435 |
State taxes |  |  | 350 |  |  |  | 276 |
Accrued liabilities |  |  | 675 |  |  |  | 861 |
Current deferred income taxes |  | $ | 2,222 |  |  | $ | 2,136 |
Property, plant, and equipment |  |  | (5,604 | ) |  |  | (5,258 | )
Intangible assets |  |  | 105 |  |  |  | (312 | )
Unrealized gain, Limoneira investment |  |  | (6,008 | ) |  |  | (2,614 | )
Stock-based compensation |  |  | 286 |  |  |  | 183 |
State taxes |  |  | 546 |  |  |  | — |
Other |  |  | 10 |  |  |  | (1 | )
Long-term deferred income taxes |  | $ | (10,665 | ) |  | $ | (8,002 | )
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:
|  | 2012 |  |  | 2011 |  |  | 2010 |
Federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State taxes, net of federal effects |  |  | 1.7 |  |  |  | 4.8 |  |  |  | 4.8 |
Foreign income taxes greater (less) than U.S. |  |  | (2.7 | ) |  |  | (0.9 | ) |  |  | (0.9 | )
Hacienda assessment |  |  | 6.3 |  |  |  | — |  |  |  | — |
Other |  |  | (0.8 | ) |  |  | 0.9 |  |  |  | 0.2 |
|  |  | 39.5 | % |  |  | 39.8 | % |  |  | 39.1 | %
We intend to reinvest our accumulated foreign earnings, which approximated $8.9 million at October 31, 2012, indefinitely. As a result, we have not provided any deferred income taxes on such unremitted earnings. For fiscal years 2012, 2011 and 2010, income before income taxes related to domestic operations was approximately $24.2 million, $17.1 million, and $28.3 million. For fiscal years 2012, 2011 and 2010, income before income taxes related to foreign operations was approximately $3.8 million, $1.1 million and $0.7 million. As of October 31, 2012, we did not have a liability for unrecognized tax benefits related to various federal and state income tax matters. As of October 31, 2011, 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, 2010 |  | $ | 103 |
Reductions of tax positions from prior years |  |  | (62 | )
Balance at October 31, 2011 |  |  | 41 |
Reductions of tax positions from prior years |  |  | (41 | )
Balance at October 31, 2012 |  | $ | — |
As previously disclosed, during the third quarter of fiscal year 2012, we received an update from our outside legal counsel regarding the Hacienda’s examination of the tax year ended December 31, 2004. The appellate court, via a second resolution, upheld the lower court’s decision on two outstanding tax assessments from the Hacienda for which we had previously received unfavorable rulings. Management, as well as our outside legal counsel, still believes the company’s position was correct. Based on discussions with our outside legal counsel in Mexico, however, we did not believe we would be able to appeal this decision any further (i.e. to the Mexican Supreme Court) and, as a result, were forced to pay an assessment. The income tax assessment related to these allegations amounted to $1.8 million. The payment related to this tax assessment was paid during our third fiscal quarter. This has the effect of increasing our effective income tax rate for fiscal 2012. Substantially offsetting the impact of this assessment on our tax provision are tax benefits recognized due to a shift of income between taxing jurisdictions, tax credits received through California’s Enterprise Zone Hiring Credit Program (EZC) and an increase in the Section 199 deduction. We expect to continue to receive tax benefits related to the shift of income between taxing jurisdictions, as well as the EZC credits, during fiscal 2013. The effective income tax rate for fiscal years 2011, and 2010 is higher than the federal statutory rate principally due to state and foreign taxes.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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