XML 29 R17.htm IDEA: XBRL DOCUMENT v3.22.4

Income Taxes

12 Months Ended

Oct. 31, 2022

Income Taxes

Income Taxes

9. Income Taxes

​

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

​

​	​	​	​	​	​	​	​	​	​	​
​		2022			2021			2020
​	​	​	​		​	​	​	​	​	​
Current:	​	​	​	​	​	​	​	​	​	​
Federal	​	$	2,012	​	$	(3,449)	​	$	(5,684)	​
State	​		147	​		323	​		(214)	​
Foreign	​		1,209	​		16,703	​		645	​
Total current	​		3,368	​		13,577	​		(5,253)	​
​	​	​	​	​	​	​	​	​	​	​
Deferred:	​	​	​	​	​	​	​	​	​	​
Federal	​		(162)	​		790	​		576	​
State	​		746	​		(343)	​		(505)	​
Foreign	​		(701)	​		(3,934)	​		260	​
Total deferred	​		(117)	​		(3,487)	​		331	​
Change in valuation allowance	​	​	—	​	​	657	​	​	630	​
Total income tax provision (benefit)	​	$	3,251	​	$	10,747	​	$	(4,292)	​

​

At October 31, 2022 and 2021, gross deferred tax assets totaled approximately $23.5 million and $29.3 million, while gross deferred tax liabilities totaled approximately $16.2 million and $22.7 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):

​

​	​	​	​	​	​	​	​
​		2022			2021
​	​	​	​	​	​	​	​
Property, plant, and equipment	​		(2,002)	​		(4,764)	​
Intangible assets	​		2,828	​		5,051	​
Unrealized gain, Limoneira investment	​		—	​		(1,138)	​
Stock-based compensation	​		715	​		511	​
State taxes	​		6	​		(498)	​
Credits and incentives	​		1,194	​		1,808	​
Allowance for accounts receivable	​	​	936	​	​	1,259	​
Inventories	​	​	442	​	​	507	​
Accrued liabilities	​	​	1,143	​	​	2,067	​
Operating lease - Right of use assets	​	​	(13,723)	​	​	(15,839)	​
Operating lease liabilities	​	​	14,861	​	​	17,040	​
Net operating loss	​	​	549	​	​	1,093	​
Valuation allowance	​	​	(1,830)	​	​	(1,291)	​
Capital loss carryover	​	​	804	​	​	—	​
Other	​		(490)	​		(490)	​
Long-term deferred income taxes	​	$	5,433	​	$	5,316	​

​

As of October 31, 2022 and 2021, the Company has no federal net operating loss carryforwards. The Company has gross state net operating loss carryforwards of approximately $9.1 million and $19.0 million with carryforward periods primarily ranging from 20 years to indefinite.

​

The Company records a valuation allowance against deferred tax assets when determined that all or a portion of the deferred tax assets are not more likely than not to be realized based on all available evidence. As of October 31, 2022 and 2021, the Company recorded an approximate $1.8 million and $1.2 million valuation allowance against the deferred

tax assets for state tax credit carryforwards and federal capital loss carryforwards that are more likely than not to expire unutilized. During the year ended October 31, 2022, the Company increased the valuation allowance against federal capital loss carryforwards by $0.6 million.

​

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

​

​	​	​	​	​	​	​	​
​		2022		2021		2020
​	​	​	​	​	​	​	​
Federal statutory tax rate		21.0	%	21.0	%	21.0	%
State taxes, net of federal effects		(1.3)	​	11.6	​	4.4	​
Rate differential on NOL carryback	​	—	​	125.8	​	6.2	​
Foreign income taxes greater than U.S.		5.2	​	16.1	​	(2.3)	​
Uncertain tax positions		5.1	​	(1,059.9)	​	—	​
Stock based compensation		(6.1)	​	(16.7)	​	—	​
Provision to return	​	(59.9)	​	39.2	​	(2.5)	​
State rate change		(2.5)	​	9.2	​	(0.1)	​
Valuation allowance	​	(24.2)	​	(44.1)	​	(2.7)	​
Other permanent differences	​	(33.8)	​	—	​	—	​
Other		(0.5)	​	(15.5)	​	(0.3)	​
​		(97.0)	%	(913.3)	%	23.7	%

​

For fiscal years 2022, 2021 and 2020, income (loss) before income taxes (benefit) related to domestic operations was approximately $(1.4) million, $(5.0) million, and $(18.9) million. Additionally, for fiscal 2022, we received income tax refunds of $6.7 million. For fiscal years 2022, 2021 and 2020, income before income taxes (benefit) related to foreign operations was approximately $(1.9) million, $3.8 million and $0.8 million.

​

As of October 31, 2022, and 2021, we had $11.1 million and $11.3 million for unrecognized tax benefits related primarily to the probable outcomes of the 2013 Mexico Assessment. See Note 7 for further information.

​

A reconciliation of the beginning and ending amount of gross unrecognized taxes (exclusive of interest and penalties) was as follows (in thousands):

​

​	​	​	​	​	​	​
​		Year Ended October 31,
​	​	2022		​	2021
Beginning balance	​	$	11,303	​	$	72
Reductions based on tax positions related to prior periods	​	​	(172)	​	​	—
Gross increase - Tax positions in prior periods	​		—	​		131
Gross increase - Tax positions in current period	​		—	​		11,100
Ending balance	​	$	11,131	​	$	11,303

​

Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. The Company accounts for income taxes regarding uncertain tax positions and recognized interest and penalties related to uncertain tax positions in income tax benefit/(expense) in the consolidated statements of operations. Total accrued interest and penalties recorded on the consolidated balance sheet were zero because the company prepaid the disputed amount. See Note 7 for additional details.

​

Due to our history of earnings, current, and expected future profitability, we believe there is sufficient objective positive evidence that it is more likely than not that we will realize our net deferred tax assets, therefore a valuation allowance over our federal and state net deferred tax assets is not needed, other than the state tax credit and federal capital loss carryforwards.

​

We are subject to U.S. federal income tax as well as income of multiple state tax and foreign tax jurisdictions. We are no longer subject to U.S. income tax examinations for the fiscal years prior to October 31, 2019, and are no longer subject to state income tax examinations for fiscal years prior to October 31, 2018.

​

The Company determined that certain foreign earnings to be indefinitely reinvested outside the United States. Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations. However, if these funds were repatriated, we would be required to accrue and pay applicable United States taxes (if any) and withholding taxes payable to foreign tax authorities.

X

- References

No definition available.

+ Details

Name:	us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- 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/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Name:	us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration