Income Taxes

6 Months Ended

Jul. 31, 2011

Income Taxes [Abstract]

INCOME TAXES

NOTE 10 — INCOME TAXES

The Company’s income tax expense amounts related to continuing operations for the six months ended July 31, 2011 and 2010 differed from the expected income tax expense amounts computed by applying the federal corporate income tax rate of 34% to the income from continuing operations before income taxes as shown in the table below.

	Six Months Ended July 31,
	2011			2010
Computed expected income tax expense	$	1,177,000		$	3,374,000
State income taxes, net of federal tax benefit		137,000			470,000
Permanent differences, net		(126,000	)		(150,000	)
Other, net		10,000			(83,000	)
	$	1,198,000		$	3,611,000

For the six months ended July 31, 2011 and 2010, the favorable tax effects of permanent differences related primarily to the tax benefit of the domestic manufacturing deduction for the periods.

As of July 31, 2011, prepaid expenses and other assets included prepaid income taxes related to continuing operations in the amount of approximately $779,000. As of January 31, 2011, accrued expenses included income tax amounts payable related to continuing operations of approximately $4,359,000. The Company’s consolidated balance sheets as of July 31 and January 31, 2011 included net deferred tax assets related to continuing operations in the amounts of $923,000 and $1,090,000, respectively, resulting from future deductible temporary differences. At this time, based substantially on the strong earnings performance of the Company’s power industry services business segment, management believes that it is more likely than not that the Company will realize benefit from its deferred tax assets and therefore no valuation reserve has been recorded.

The Company is subject to income taxes in the United States of America and in various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for its fiscal years ended on or before January 31, 2007.