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INCOME TAXES (Tables)
12 Months Ended
Oct. 31, 2022
INCOME TAXES  
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)

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)

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

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

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

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.