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Income Taxes | 12 Months Ended
--- | ---
Jan. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax expense (benefit) for the last three years is reconciled to the statutory federal income tax rate as follows (in thousands):
| Year ended January 31,
| 2018 |  | 2017 |  | 2016
Statutory | $ | 794 |  |  | $ | 1,607 |  |  | $ | 1,587 |
State taxes (net of federal tax) | 341 |  |  | 363 |  |  | 303 |
Change in valuation allowance | 410 |  |  | (19,831 | ) |  | (2,214 | )
State rate adjustment | (260 | ) |  | (548 | ) |  | 168 |
Change in unrecognized tax benefits | 6 |  |  | (1 | ) |  | (3 | )
Stock Compensation | (200 | ) |  | — |  |  | — |
Tax cuts and jobs act | 4,438 |  |  | — |  |  | — |
Expirations of attributes | 143 |  |  | 408 |  |  | 229 |
Other | (49 | ) |  | (31 | ) |  | 48 |
Income tax expense (benefit) | $ | 5,623 |  |  | $ | (18,033 | ) |  | $ | 118 |
Significant components of the expense (benefit) for income taxes (in thousands) attributed to continuing operations are as follows:
| Year ended January 31,
| 2018 |  | 2017 |  | 2016
Current |  |  |  |  |
Federal | $ | (296 | ) |  | $ | 24 |  |  | $ | 1 |
State | 98 |  |  | 65 |  |  | 40 |
| (198 | ) |  | 89 |  |  | 41 |
Deferred |  |  |  |  |
Federal | 5,270 |  |  | 1,519 |  |  | 1,567 |
State | 141 |  |  | 190 |  |  | 724 |
| 5,411 |  |  | 1,709 |  |  | 2,291 |
Change in Valuation Allowance | 410 |  |  | (19,831 | ) |  | (2,214 | )
| 5,821 |  |  | (18,122 | ) |  | 77 |
Income tax expense (benefit) | $ | 5,623 |  |  | $ | (18,033 | ) |  | $ | 118 |
Deferred tax assets and liabilities (in thousands) are comprised of the following:
| Year ended January 31,
| 2018 |  | 2017
Deferred tax assets |  |  |
Accrued vacation and sick leave | $ | 1,015 |  |  | $ | 1,211 |
Retirement plans | 3,756 |  |  | 6,900 |
Insurance reserves | 451 |  |  | 633 |
Warranty | 242 |  |  | 383 |
Net operating loss carryforwards | 4,722 |  |  | 7,627 |
Intangibles | — |  |  | — |
Inventory | 1,085 |  |  | 1,418 |
Other | 624 |  |  | 1,005 |
| $ | 11,895 |  |  | $ | 19,177 |
Deferred tax liabilities |  |  |
Tax in excess of book depreciation | $ | (811 | ) |  | $ | (1,556 | )
Other | (66 | ) |  | (98 | )
| $ | (877 | ) |  | $ | (1,654 | )
Valuation allowance | (925 | ) |  | (515 | )
Net long term deferred tax asset | $ | 10,093 |  |  | $ | 17,008 |
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. At October 31, 2016, the Company determined that it was more-likely-than-not to realize the majority of its deferred tax assets, and therefore released its valuation against those assets resulting in a benefit to income taxes. The Company has left a partial valuation allowance of $925,000 against certain state deferred tax assets that the Company does not believe it is more-likely-than-not to realize. At January 31, 2018, the Company has net operating loss carryforwards of approximately $13,458,000 for federal and $30,979,000 for state income tax purposes, expiring at various dates through January 31, 2035. The following table summarizes the activity related to our gross unrecognized tax benefits from February 1, 2016 to January 31, 2018 (in thousands):
| January 31,
| 2018 |  | 2017
Balances as of February 1, | $ | 29 |  |  | $ | 31 |
Increases related to prior year tax positions | 2 |  |  | 1 |
Decreases related to prior year tax positions | — |  |  | — |
Increases related to current year tax positions | 16 |  |  | 5 |
Decreases relating to settlements with taxing authorities | — |  |  | — |
Decreases related to lapsing of statute of limitations | (9 | ) |  | (8 | )
Balance as of January 31, | $ | 38 |  |  | $ | 29 |
At January 31, 2018, the Company’s unrecognized tax benefits associated with uncertain tax positions were $38,000, of which $30,000 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 $5,000 at January 31, 2018, and $4,000 at January 31, 2017. In 2016, the Company closed its IRS examination for its tax return for the year ended January 31, 2013 with no changes. The years ended January 31, 2015 and subsequent years remain open for examination by the IRS and state tax authorities. The Company is currently under IRS examination for fiscal year ended January 31, 2016. The Company is not currently under state examinations. The specific timing of when the resolution of each tax position will be reached is uncertain. As of January 31, 2018, it is reasonably possible that unrecognized tax benefits will decrease by $4,000 within the next 12 months due to the expiration of the statute of limitations. In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting (''ASU 2016-09''). ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016. The Company adopted this ASU in the first quarter of fiscal 2018. The Company has excess tax benefits for which a benefit could not be previously recognized of approximately $172,000. The balance of the unrecognized excess tax benefits was reversed with the impact recorded to retained earnings. The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate to 21%. On December 22, 2017, Staff Accounting Bulletin No. 118 was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, we have determined that $4,438,000 of the deferred tax expense recorded in connection with the remeasurement of certain deferred tax assets and liabilities was provisional amount and reasonable estimate at January 31, 2018. Additional work is necessary to do a more detailed analysis. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of fiscal year 2019 when the analysis is complete.

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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 Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 Reference 4: 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=65882285&loc=d3e32639-109319 Reference 5: 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=65882285&loc=d3e32537-109319 + Details
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