INCOME TAXES

3 Months Ended

Jan. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

6. INCOME TAXES

As of January 31, 2012, the Company’s liability for gross unrecognized tax benefits related to uncertain tax positions was $2.0 million of which $1.6 million would decrease the Company’s income tax expense and effective income tax rate if the tax benefits were recognized. A reconciliation of the activity related to the liability for gross unrecognized tax benefits for the three months ended January 31, 2012 is as follows (in thousands):

Balance as of October 31, 2011	$	1,834
Increases related to prior year tax positions		54
Increases related to current year tax positions		98
Balance as of January 31, 2012	$	1,986

There were no material changes in the liability for unrecognized tax positions resulting from tax positions taken during the current or a prior year, settlements with other taxing authorities or a lapse of applicable statutes of limitations. The accrual of interest and penalties related to the unrecognized tax benefits was not material for the three months ended January 31,

2012. Further, the Company does not expect the total amount of unrecognized tax benefits to materially change in the next twelve months.

The Company’s effective tax rate in the first quarter of fiscal 2012 increased to 34.2% from 30.4% in the first quarter of fiscal 2011. The increase is principally due to an income tax credit for qualified research and development activities for the last ten months of fiscal 2010 that was recognized in the first quarter of fiscal 2011 resulting from the retroactive extension of Section 41 of the Internal Revenue Code, “Credit for Increasing Research Activities,” to cover the period from January 1, 2010 to December 31, 2011. The increase was also attributed to the expiration of Section 41 of the Internal Revenue Code in December 31, 2011 resulting in qualified research and development activities for just the months of November and December 2011 being recognized in the first quarter of fiscal 2012. During fiscal 2011, the Company purchased certain noncontrolling interests that also contributed to the increase in the effective tax rate for the first quarter of fiscal 2012.