Note 10 - Income Taxes

6 Months Ended

Apr. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 10 – Income taxes

We use an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate, to determine its quarterly provision (benefit) for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

We recorded income tax provisions of $136,000 and $648,000 for the three months ended April 30, 2022 and 2021, respectively. The effective tax rate was 21% for the three months ended April 30, 2022, compared to 24.2% for the three months ended April 30, 2021. For the six months ended April 30, 2022 and 2021, we recorded income tax provisions of $56,000 and $454,000, respectively. The effective tax rate was 20.4% for the six months ended April 30, 2022, compared to 21.8% for the six months ended April 30, 2021. The change in effective tax rate for the six months ended April 30, 2022 compared to the six months ended April 30, 2021 was primarily driven by stock compensation windfall benefits.

We had $194,000 and $141,000 of unrecognized tax benefits, inclusive of interest and penalties, as of April 30, 2022 and October 31, 2021, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $189,000 as of April 30, 2022.