Note 10 - Income Taxes

9 Months Ended

Jul. 31, 2023

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 (benefit) provision 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 (benefits) provisions of ($482,000) and $140,000 for the three months ended July 31, 2023 and 2022, respectively. The effective tax rate was 22.7% for the three months ended July 31, 2023, compared to 15.4% for the three months ended July 31, 2022. For the nine months ended July 31, 2023 and 2022, we recorded income tax (benefits) provisions of ($806,000) and $196,000, respectively. The effective tax rate was 26.6% for the nine months ended July 31, 2023, compared to 16.4% for the nine months ended July 31, 2022. The change in effective tax rate for the nine months ended July 31, 2023 compared to the nine months ended July 31, 2022 was primarily driven by stock-based compensation windfall/shortfalls and the Company's full year forecasted financial loss.

We had $168,000 and $121,000 of unrecognized tax benefits, as of July 31, 2023 and October 31, 2022, respectively. The unrecognized tax benefits, if recognized, would result in a net tax benefit of $164,000 as of July 31, 2023.