INCOME TAXES (Tables)
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12 Months Ended |
Oct. 31, 2022 |
INCOME TAXES |
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Components of Income (Loss) Before Taxes |
The components of income (loss) before taxes are (in thousands): | | | | | | | | | | | | Year Ended October 31, | | | 2022 | | 2021 | | 2020 | Income (loss) before income taxes: | | | | | | | | | | Domestic | | $ | (232) | | $ | 4,340 | | $ | (11,681) | Foreign | | | 12,110 | | | 5,781 | | | 878 | | | $ | 11,878 | | $ | 10,121 | | $ | (10,803) |
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Schedule of Income Taxes Provision (Benefit) |
In the fiscal years set forth below, the provision (benefit) for income taxes consisted of the following (in thousands): | | | | | | | | | | | | Year Ended October 31, | | | 2022 | | 2021 | | 2020 | Current: | | | | | | | | | | U.S. taxes | | $ | 1,092 | | $ | 1,763 | | $ | (4,932) | Foreign taxes | | | 3,191 | | | 1,706 | | | 923 | | | | 4,283 | | | 3,469 | | | (4,009) | Deferred: | | | | | | | | | | U.S. taxes | | | (933) | | | 66 | | | (256) | Foreign taxes | | | 302 | | | (178) | | | (291) | | | | (631) | | | (112) | | | (547) | | | $ | 3,652 | | $ | 3,357 | | $ | (4,556) |
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Schedule of Reconciliation of Statutory Tax Rate to Effective Tax Rate |
A comparison of income tax expense at the U.S. statutory rate to our effective tax rate is as follows: | | | | | | | | | | | | | Year Ended October 31, | | | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | | U.S. statutory rate | | | 21 | % | | 21 | % | | 21 | % | Effect of tax rate of international jurisdictions different than U.S. statutory rates | | | 4 | % | | 4 | % | | (2) | % | Valuation allowance | | | 3 | % | | — | % | | — | % | State taxes | | | 1 | % | | 1 | % | | 2 | % | Tax credits | | | 1 | % | | — | % | | 1 | % | U.S. benefit of foreign intangible income | | | (3) | % | | (1) | % | | — | % | Impact of CARES act | | | — | % | | 5 | % | | 22 | % | Other | | | 4 | % 1 | | 3 | % 1 | | (2) | % | Effective tax rate | | | 31 | % | | 33 | % | | 42 | % | 1 Primarily due to discrete items for unearned stock awards | | | | | | | | | | |
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Schedule of Deferred Tax Assets and Liabilities |
Significant components of our deferred tax assets and liabilities at October 31, 2022 and 2021 are as follows (in thousands): | | | | | | | | | October 31, | | | 2022 | | 2021 | Deferred Tax Assets: | | | | | | | Accrued inventory reserves | | $ | 1,329 | | $ | 973 | Accrued warranty expenses | | | 270 | | | 308 | Compensation related expenses | | | 2,495 | | | 2,444 | Net derivative gain | | | 98 | | | 49 | Unrealized exchange gain | | | 117 | | | — | Other accrued expenses | | | 318 | | | 282 | Net operating loss carryforwards | | | 1,449 | | | 1,705 | Other credit carryforwards | | | 703 | | | 839 | Operating lease liabilities | | | 2,023 | | | 2,570 | Goodwill and intangibles | | | 831 | | | 967 | Other | | | 171 | | | 215 | | | | 9,804 | | | 10,352 | Less: Valuation allowance – net operating loss and other credit carryforwards | | | (1,754) | | | (1,871) | Deferred tax assets | | | 8,050 | | | 8,481 | | | | | | | | Deferred Tax Liabilities: | | | | | | | Unrealized exchange loss | | | — | | | (15) | Property and equipment and capitalized software development costs | | | (2,394) | | | (2,533) | Operating lease - right of use assets | | | (1,960) | | | (2,495) | Other | | | (321) | | | (352) | Net deferred tax assets | | $ | 3,375 | | $ | 3,086 |
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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): | | | | | | | | | | | | 2022 | | 2021 | | 2020 | Balance, beginning of year | | $ | 167 | | $ | 168 | | $ | 193 | Additions based on tax positions related to the current year | | | 21 | | | 74 | | | 9 | Additions (reductions) related to prior year tax positions | | | — | | | — | | | (2) | Reductions due to statute expiration | | | (50) | | | (75) | | | (32) | Balance, end of year | | $ | 138 | | $ | 167 | | $ | 168 |
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Summary of open tax years by major jurisdiction |
| | | United States federal | | Fiscal year 2014 through the current period | Germany¹ | | Fiscal year 2017 through the current period | United Kingdom | | Fiscal year 2015 through the current period | Taiwan | | Fiscal year 2017 through the current period |
¹ | Includes federal as well as state, provincial or similar local jurisdictions, as applicable. |
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