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v3.25.1

Income Taxes (Tables) | 12 Months Ended
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Jan. 31, 2025
Income Tax Disclosure [Abstract] |
Components of Income (Loss) before Income Taxes | The components of income (loss) before income taxes are as follows:
|  | 2025 |  |  | 2024 |  |  | 2023 |
(In thousands) |  |  |  |  |  |  |  |  |
Domestic |  | $ | 5,605 |  |  | $ | 5,448 |  |  | $ | 1,773 |
Foreign |  |  | (17,892 | ) |  |  | 625 |  |  |  | 1,637 |
|  | $ | (12,287 | ) |  | $ | 6,073 |  |  | $ | 3,410 |
Components of Provision for Income Taxes | The components of the provision for income taxes are as follows:
|  | 2025 |  |  | 2024 |  |  | 2023 |
(In thousands) |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,125 |  |  | $ | 966 |  |  | $ | 902 |
State |  |  | 134 |  |  |  | 71 |  |  |  | 313 |
Foreign |  |  | 153 |  |  |  | 420 |  |  |  | 870 |
|  |  | 1,412 |  |  |  | 1,457 |  |  |  | 2,085 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  | $ | (621 | ) |  | $ | (32 | ) |  | $ | (1,053 | )
State |  |  | (13 | ) |  |  | 2 |  |  |  | (315 | )
Foreign |  |  | 1,424 |  |  |  | (48 | ) |  |  | 32 |
|  |  | 790 |  |  |  | (78 | ) |  |  | (1,336 | )
|  | $ | 2,202 |  |  | $ | 1,379 |  |  | $ | 749 |
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:
|  | 2025 |  |  | 2024 |  |  | 2023 |
(In thousands) |  |  |  |  |  |  |  |  |
Income Tax Provision at Statutory Rate |  | $ | (2,579 | ) |  | $ | 1,275 |  |  | $ | 716 |
Goodwill Impairment |  |  | 2,814 |  |  |  | — |  |  |  | — |
Portugal Tax Incentives - Valuation Allowance |  |  | 2,373 |  |  |  | — |  |  |  | — |
Foreign Rate Differential |  |  | 163 |  |  |  | 197 |  |  |  | 157 |
Change in Reserves Related to ASC 740 Liability |  |  | 133 |  |  |  | 60 |  |  |  | 93 |
Transaction Costs |  |  | 121 |  |  |  | — |  |  |  | — |
State Taxes, Net of Federal Tax Effect |  |  | 96 |  |  |  | 56 |  |  |  | (2 | )
Meals and Entertainment |  |  | 21 |  |  |  | 14 |  |  |  | — |
Change in Valuation Allowance |  |  | (68 | ) |  |  | 73 |  |  |  | 182 |
Share Based Compensation |  |  | (74 | ) |  |  | (43 | ) |  |  | (52 | )
Foreign Derived Intangible Income |  |  | (151 | ) |  |  | (98 | ) |  |  | (180 | )
R&D Credits |  |  | (205 | ) |  |  | (160 | ) |  |  | (160 | )
Return to Provision Adjustment |  |  | (363 | ) |  |  | 12 |  |  |  | (22 | )
Other |  |  | (79 | ) |  |  | (7 | ) |  |  | 17 |
|  | $ | 2,202 |  |  | $ | 1,379 |  |  | $ | 749 |
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) |  | 2025 |  |  | 2024 |
Deferred Tax Assets: |  |  |  |  |  |
Honeywell Royalty Liability |  | $ | 4,280 |  |  | $ | 3,561 |
Section 174 Capitalization |  |  | 2,894 |  |  |  | 1,981 |
Portugal Tax Incentives |  |  | 2,373 |  |  |  | — |
Inventory |  |  | 1,994 |  |  |  | 2,242 |
State R&D Credits |  |  | 1,721 |  |  |  | 2,160 |
Net Operating Loss |  |  | 886 |  |  |  | 199 |
Share-Based Compensation |  |  | 575 |  |  |  | 590 |
Portugal Statutory Tax Adjustments |  |  | 541 |  |  |  | — |
Compensation Accrual |  |  | 285 |  |  |  | 276 |
Foreign Tax Credit |  |  | 154 |  |  |  | 154 |
Bad Debt |  |  | 115 |  |  |  | 134 |
Warranty Reserve |  |  | 120 |  |  |  | 171 |
ASC 842 Adjustment – Lease Liability |  |  | 87 |  |  |  | 38 |
Deferred Service Contract Revenue |  |  | — |  |  |  | 100 |
Unrecognized State Tax Benefits |  |  | — |  |  |  | 49 |
Other |  |  | 563 |  |  |  | 381 |
|  |  | 16,588 |  |  |  | 12,036 |
Deferred Tax Liabilities: |  |  |  |  |  |
Accumulated Tax Depreciation in Excess of Book Depreciation |  |  | 1,632 |  |  |  | 1,491 |
Intangibles |  |  | 1,544 |  |  |  | 989 |
Purchase Price Accounting |  |  | 270 |  |  |  | — |
Portugal Statutory Tax Adjustments |  |  | 110 |  |  |  | — |
ASC 842 Adjustment – Lease Liability |  |  | 87 |  |  |  | 33 |
Other |  |  | 154 |  |  |  | 206 |
|  |  | 3,797 |  |  |  | 2,719 |
Subtotal |  |  | 12,791 |  |  |  | 9,317 |
Valuation Allowance |  |  | (4,400 | ) |  |  | (2,534 | )
Net Deferred Tax Assets |  | $ | 8,391 |  |  | $ | 6,783 |
Deferred taxes are reflected in the consolidated balance sheet as follows:
|  | January 31, |
(In thousands) |  | 2025 |  |  | 2024 |
Deferred Tax Assets |  |  | 8,431 |  |  |  | 6,882 |
Deferred Tax Liabilities |  |  | (40 | ) |  |  | (99 | )
Total Net Deferred Tax Assets |  | $ | 8,391 |  |  | $ | 6,783 |
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:
|  | 2025 |  |  | 2024 |  |  | 2023 |
(In thousands) |  |  |  |  |  |  |  |  |
Balance, beginning of the year |  | $ | 505 |  |  | $ | 414 |  |  | $ | 303 |
Increases in prior period tax positions |  |  | 10 |  |  |  | — |  |  |  | 24 |
Increases in current period tax positions |  |  | 143 |  |  |  | 162 |  |  |  | 136 |
Reductions related to lapse of statutes of limitations |  |  | (19 | ) |  |  | (71 | ) |  |  | (49 | )
Balance, end of the year |  | $ | 639 |  |  | $ | 505 |  |  | $ | 414 |

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