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Income Taxes
 12 Months Ended
Jan. 31, 2012
Income Taxes [Abstract]  
Income Taxes

7. Income Taxes

The income tax expense (benefit) for the last three years is reconciled to the statutory federal income tax rate using the liability method as follows (in thousands):

 

                         
    Year ended January 31,  
                As Adjusted  
    2012     2011     2010  

Statutory

   $ (4,674 )    $ (2,920 )    $ (493 ) 

State taxes (net of federal tax)

     (799 )      (445 )      61  

Change in valuation allowance

     6,043       13,989       (437 ) 

State rate adjustment

     (288 )      (1,365 )      (12 ) 

Other

     (227 )      (252 )      155  
   

 

 

    

 

 

    

 

 

  
    $ 55     $ 9,007     $ (726 ) 
   

 

 

    

 

 

    

 

 

  

 

Significant components of the expense (benefit) for income taxes (in thousands) attributed to continuing operations are as follows:

 

                         
    Year ended January 31,  
                As Adjusted  
    2012     2011     2010  

Current

                        

Federal

   $ —       $ (459 )    $ (17 ) 

State

     (173 )      (393 )      207  
   

 

 

    

 

 

    

 

 

  
      (173 )      (852 )      190  

Deferred

                        

Federal

     (4,581 )      (3,482 )      (413 ) 

State

     (1,235 )      (648 )      (66 ) 
   

 

 

    

 

 

    

 

 

  
      (5,816 )      (4,130 )      (479 ) 

Change in Valuation Allowance

     6,044       13,989       (437 ) 
   

 

 

    

 

 

    

 

 

  
      228       9,859       (916 ) 
   

 

 

    

 

 

    

 

 

  
    $ 55     $ 9,007     $ (726 ) 
   

 

 

    

 

 

    

 

 

  

Deferred tax assets and liabilities (in thousands) are comprised of the following:

 

                 
    Year ended January 31,  
    2012     2011  

Deferred tax assets

                

Accrued vacation and sick leave

   $ 879     $ 1,009  

Retirement plans

     9,820       7,110  

Insurance reserves

     1,183       1,113  

Warranty

     595       996  

Net operating loss carryforwards

     11,255       6,609  

Intangibles

     338       397  

Inventory

     146       —    

Other

     1,486       1,551  
   

 

 

    

 

 

  
    $ 25,702     $ 18,785  

Deferred tax liabilities

                

Tax in excess of book depreciation

   $ (1,793 )    $ (2,187 ) 

Inventory

     —         (732 ) 

Other

     (71 )      (111 ) 
   

 

 

    

 

 

  
    $ (1,864 )    $ (3,030 ) 

Valuation allowance

     (22,859 )      (14,548 ) 
   

 

 

    

 

 

  

Net deferred tax asset

   $ 979     $ 1,207  
   

 

 

    

 

 

  
      —            

Reported as:

                

Current deferred tax liabilities

   $ (1,221 )    $ (1,398 ) 

Long-term deferred tax assets

     2,200       2,605  

 

The following table summarizes the activity related to our gross unrecognized tax benefits from February 1, 2010 to January 31, 2012 (in thousands):

 

                 
    January 31,  
    2012     2011  

Balances as of February 1,

   $ 406     $ 636  

Increases related to prior year tax positions

     —         —    

Decreases related to prior year tax positions

     —         (18 ) 

Increases related to current year tax positions

     —         —    

Decreases related to lapsing of statue of limitations

     (135 )      (212 ) 
   

 

 

    

 

 

  

Balance as of January 31,

   $ 271     $ 406  
   

 

 

    

 

 

    

 

 

  

At January 31, 2012, the Company’s unrecognized tax benefits associated with uncertain tax positions were $271,000, of which $179,000 if recognized, would favorably affect the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense which is consistent with the recognition of the items in prior reporting. The Company had recorded a liability for interest and penalties related to unrecognized tax benefits of $217,000 at January 31, 2012, and $315,000 at January 31, 2011. The Company is currently under IRS examination for its tax return for the year ended January 31, 2011. The years ended January 31, 2010 and January 31, 2012 remain open for examination by the IRS. The years ended January 31, 2008 through January 31, 2012 remain open for examination by state tax authorities. The Company is not currently under state examination.

The specific timing of when the resolution of each tax position will be reached is uncertain. As of January 31, 2012, we do not believe that there are any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company incurred a substantial operating loss for the year ended January 31, 2011. During the fourth quarter of the year ended January 31, 2011, based on this consideration, the Company determined the realization of a majority of the net deferred tax assets no longer met the more likely than not criteria and a valuation allowance was recorded against the majority of the net deferred tax assets totaling $22,859,000 and $14,548,000 at January 31, 2012 and 2011, respectively. At January 31, 2012, the Company had net operating loss carryforwards for federal and state income tax purposes, expiring at various dates through 2033. Federal net operating losses that can potentially be carried forward totaled approximately $21,980,000 at January 31, 2012. State net operating losses that can potentially be carried forward totaled approximately $45,785,000 at January 31, 2012.