Income tax provision

12 Months Ended

Oct. 31, 2014

Income Tax Disclosure [Abstract]

Income tax provision

Note 7 - Income tax provision

The provision (benefit) for income taxes for the fiscal years ended October 31, 2014 and 2013 consists of the following (in thousands):

	2014		2013
Current:
Federal	$	839	$	1,650
State		180		191
		1,019		1,841
Deferred:
Federal		(54)		146
State		(6)		(7)
		(60)		139
	$	959	$	1,980

Income tax at the federal statutory rate is reconciled to the Company’s actual net provision for income taxes as follows (in thousands, except percentages):

	2014					2013
			% of Pretax					% of Pretax
	Amount		Income			Amount		Income
Income tax at Federal statutory rate	$	780		34.0	%	$	2,286		34.0	%
State tax provision, net of Federal tax benefit		135		5.9	%		227		3.3	%
Nondeductible differences:
ISO stock options, net		54		2.4	%		(324)		-4.8	%
Qualified domestic production activities deduction		(32)		-1.4	%		(87)		-1.3	%
Other		28		1.1	%		40		0.6	%
R&D credit		(6)		-0.2	%		(87)		-1.3	%
Other		-		-			(75)		-1.1	%
Provision for income taxes	$	959		41.8	%	$	1,980		29.4	%

The Company’s total deferred tax assets and deferred tax liabilities at October 31, 2014 and 2013 are as follows (in thousands):

	2014		2013
Current Assets:
Allowance for doubtful accounts	$	12	$	40
Accrued vacation		118		144
State income taxes		26		25
Stock based compensation awards		162		173
Section 263A costs		97		103
Other		1		10
Total current assets		416		495
Long-Term Assets:
Amortization / intangible assets		76		90
Long-Term Liabilities:
Amortization / intangible assets		(618)		(708)
Depreciation / equipment and furnishings		(269)		(332)
Net long-term deferred tax liabilities		(811)		(950)
Total deferred tax liabilities	$	(395)	$	(455)

The Company had no unrecognized tax benefits nor any gross liability for unrecognized tax benefits at October 31, 2014 and 2013.

As of October 31, 2014 and October 31, 2013, $0 of accrued interest and penalties were included in other long-term liabilities in the balance sheet.

The Company is currently not undergoing any tax examinations. Tax fiscal years ended October 31, 2010 through October 31, 2014 remain subject to examination.