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Income Taxes (Tables)

12 Months Ended

Jan. 31, 2024

Income Tax Disclosure [Abstract]

Components of Income before Income Taxes

The components of income before income taxes are as follows:

		2024				2023				2022
(In thousands)
Domestic		$	5,448			$	1,773			$	5,046
Foreign			625				1,637				1,988
		$	6,073			$	3,410			$	7,034

Components of Provision for Income Taxes

The components of the provision for income taxes are as follows:

		2024				2023				2022
(In thousands)
Current:
Federal		$	966			$	902			$	(183	)
State			71				313				76
Foreign			420				870				501
			1,457				2,085				394
Deferred:
Federal		$	(32	)		$	(1,053	)		$	180
State			2				(315	)			177
Foreign			(48	)			32				(146	)
			(78	)			(1,336	)			211
		$	1,379			$	749			$	605

Reconciliation of income tax provision/(benefit) With The Amount Computed By Applying The Statutory Federal Income Tax Rate To The Income Before Income Tax Provision/(benefit)

Total income tax provision differs from the expected tax provision as a result of the following:

		2024				2023				2022
(In thousands)
Income Tax Provision at Statutory Rate		$	1,275			$	716			$	1,477
Foreign Rate Differential			197				157				61
Change in Valuation Allowance			73				182				57
Change in Reserves Related to ASC 740 Liability			60				93				(245	)
State Taxes, Net of Federal Tax Effect			56				(2	)			143
Meals and Entertainment			14				—				9
Return to Provision Adjustment			12				(22	)			368
R&D Credits			(160	)			(160	)			(180	)
Foreign Derived Intangible Income			(98	)			(180	)			(55	)
Share Based Compensation			(43	)			(52	)			(95	)
PPP Loan Forgiveness			—				—				(937	)
Other			(7	)			17				2
		$	1,379			$	749			$	605

Tax Effects of Temporary Differences that gave Rise to Significant Portions of Deferred Tax Assets and Liabilities

The components of deferred income tax expense arise from various temporary differences and relate to items included in the statement of income. The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities are as follows:

		January 31,
(In thousands)		2024				2023
Deferred Tax Assets:
Inventory		$	2,242			$	2,710
Honeywell Royalty Liability			3,561				3,008
State R&D Credits			2,160				1,851
Share-Based Compensation			590				620
Bad Debt			134				180
Warranty Reserve			171				258
Compensation Accrual			276				248
Net Operating Loss			199				135
ASC 842 Adjustment – Lease Liability			38				53
Unrecognized State Tax Benefits			49				58
Foreign Tax Credit			154				154
Deferred Service Contract Revenue			100				90
Section 174 Capitalization*			1,981				1,175
Other			381				281
			12,036				10,821
Deferred Tax Liabilities:
Accumulated Tax Depreciation in Excess of Book Depreciation			1,491				1,037
Intangibles			989				694
ASC 842 Adjustment – Lease Liability			33				50
Other			206				180
			2,719				1,961
Subtotal			9,317				8,860
Valuation Allowance			(2,534	)			(2,120	)
Net Deferred Tax Assets		$	6,783			$	6,740

* Beginning in fiscal 2023, changes to Section 174 of the Internal Revenue Code made by the Tax Cuts and Jobs Act of 2017 (“TCJA”) no longer permit an immediate deduction for research and development expenditures in the tax year that such costs are incurred. These costs are capitalized resulting in an increase in deferred tax assets of $0.8 million from fiscal 2023 to fiscal 2024.

Deferred taxes are reflected in the consolidated balance sheet as follows:

		January 31,
(In thousands)		2024				2023
Deferred Tax Assets			6,882				6,907
Deferred Tax Liabilities			(99	)			(167	)
Total Net Deferred Tax Assets		$	6,783			$	6,740

Changes in Balance of Unrecognized Tax Benefits, Excluding Interest and Penalties

The changes in the balances of unrecognized tax benefits, excluding interest and penalties are as follows:

		2024				2023				2022
(In thousands)
Balance, beginning of the year		$	414			$	303			$	384
Increases in prior period tax positions			—				24				63
Increases in current period tax positions			162				136				67
Reductions related to lapse of statutes of limitations			(71	)			(49	)			(211	)
Balance, end of the year		$	505			$	414			$	303

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