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INCOME TAXES (Tables)

12 Months Ended

Oct. 31, 2020

INCOME TAXES

Components of Income (Loss) Before Taxes

The components of income (loss) before taxes are (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended October 31,
​		2020			2019			2018
Income (loss) before income taxes:		​			​			​
Domestic	​	$	(11,681)		$	9,793		$	14,101
Foreign	​		878			13,531			18,395
​	​	$	(10,803)		$	23,324		$	32,496

Schedule of Income Taxes Provision (Benefit)

The components of income tax provision (benefit) are (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended October 31,
​		2020			2019			2018
Current:		​			​	​		​
U.S. taxes	​	$	(4,932)		$	1,854	​	$	6,333
Foreign taxes	​		923	​		3,715	​		5,203
​	​		(4,009)	​		5,569	​		11,536
Deferred:	​		​	​		​	​		​
U.S. taxes	​		(256)	​		(31)	​		(326)
Foreign taxes	​		(291)	​		291	​		(204)
​	​		(547)	​		260	​		(530)
​	​	$	(4,556)		$	5,829	​	$	11,006

Schedule of Reconciliation of Statutory Tax Rate to Effective Tax Rate

A comparison of income tax expense at the U.S. statutory rate to the Company’s effective tax rate is as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Year Ended October 31,
​		2020			2019			2018
​	​		​	​		​	​
U.S. statutory rate	​		21	%		21	%		23	%
Effect of tax rate of international jurisdictions different than U.S. statutory rates	​		3	%		4	%		2	%
Valuation allowance	​		0	%		1	%		0	%
State taxes	​		2	%		1	%		0	%
Tax credits	​		1	%		(2)	%		(1)	%
Effect of tax rate changes	​		0	%		0	%		4	%
Transition tax	​		0	%		(1)	%		7	%
US tax on distributed and undistributed earnings	​	​	0	%	​	3	%	​	0	%
US benefit of foreign intangible income	​	​	0	%	​	(3)	%	​	0	%
Impact of CARES act	​	​	16	%	​	0	%	​	0	%
Other	​		(1)	%		1	%		(1)	%
Effective tax rate	​		42	%		25	%		34	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities at October 31, 2020 and 2019 were as follows (in thousands):

​

​	​	​	​	​	​	​
​	​	October 31,
​		2020			2019
Deferred Tax Assets:		​			​
Accrued inventory reserves	​	$	1,241		$	1,224
Accrued warranty expenses	​		248	​		363
Compensation related expenses	​		1,849	​		2,723
Unrealized exchange gain/loss	​		14	​		143
Other accrued expenses	​		226	​		170
Net operating loss carryforwards	​		1,957	​		1,380
Other credit carryforwards	​		887	​		766
Operating lease liabilities	​	​	2,736	​	​	—
Goodwill and intangibles	​	​	1,019	​	​	99
Other	​		183	​		194
​	​		10,360	​		7,062
Less: Valuation allowance – net operating loss and other credit carryforwards	​		(2,164)	​		(2,227)
Deferred tax assets	​		8,196	​		4,835
​	​		​	​		​
Deferred Tax Liabilities:	​		​	​		​
Net derivative instruments	​		(305)	​		(313)
Property and equipment and capitalized software development costs	​		(2,563)	​		(2,632)
Operating lease - right of use assets	​	​	(2,666)	​	​	—
Other	​		(314)	​		(204)
Net deferred tax assets	​	$	2,348		$	1,686

Schedule of Income Tax Expense

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding the related accrual for interest or penalties, is as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​		2020			2019			2018
Balance, beginning of year	​	$	193		$	180	​	$	1,101
Additions based on tax positions related to the current year	​		9	​		36	​		37
Additions (reductions) related to prior year tax positions	​		(2)	​		—	​		(945)
Reductions due to statute expiration	​		(32)	​		(23)	​		(18)
Other	​		—	​		—	​		5
Balance, end of year	​	$	168		$	193	​	$	180

Summary of open tax years by major jurisdiction

​

​	​	​
United States federal		Fiscal 2017 through the current period
Germany¹		Fiscal 2018 through the current period
Taiwan		Fiscal 2018 through the current period

¹ Includes federal as well as state, provincial or similar local jurisdictions, as applicable.

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of the change in unrecognized tax benefits, excluding amounts pertaining to examined tax returns.

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