Note 6 - Income Taxes

12 Months Ended

Feb. 29, 2012

Income Tax Disclosure [Text Block]

NOTE 6 - INCOME TAXES

Income tax expense is comprised of the following for the years ending February 28 or 29:

	2012		2011		2010
Current
Federal	$	1,128,049	$	1,650,552	$	1,801,479
State		173,822		217,039		314,312
Total Current		1,301,871		1,867,591		2,115,791

Deferred
Federal		729,900		223,424		(22,603	)
State		3,975		7,203		(2,720	)
Total Deferred		733,875		230,627		(25,323	)
Total	$	2,035,746	$	2,098,218	$	2,090,468

A reconciliation of the statutory federal income tax rate and the effective rate as a percentage of pretax income is as follows for the years ending February 28 or 29:

	2012			2011			2010
Statutory rate		34.0	%		34.0	%		34.0	%
State income taxes, net of federal benefit		2.0	%		2.5	%		3.6	%
Other		(1.6	%)		(1.6	%)		(0.7	%)
Effective Rate		34.4	%		34.9	%		36.9	%

The components of deferred income taxes at February 28 or 29 are as follows:

Deferred Tax Assets	2012			2011
Allowance for doubtful accounts and notes	$	216,136		$	144,418
Inventories		92,315			91,254
Accrued compensation		147,814			165,588
Loss provisions and deferred income		156,738			121,928
Self insurance accrual		52,946			58,034
Amortization, design costs		87,213			89,564
		753,162			670,786
Deferred Tax Liabilities
Depreciation and amortization		(2,051,240	)		(1,237,046	)
Prepaid expenses		(99,605	)		(97,548	)
Net deferred tax liability	$	(2,150,845	)	$	(1,334,594	)
Current deferred tax assets	$	487,274		$	445,194
Non-current deferred tax liabilities		(1,884,957	)		(1,109,002	)
Net deferred tax liability	$	(1,397,683	)	$	(663,808	)

The Company files income tax returns in the U.S. federal and various state taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before FY 2007.

Realization of the Company's deferred tax assets is dependent upon the Company generating sufficient taxable income, in the appropriate tax jurisdictions, in future years to obtain benefit from the reversal of net deductible temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. Management believes that it is more likely than not that the Company will realize the benefits of its deferred tax assets as of February 29, 2012.

The Company accounts for uncertainty in income taxes by recognizing the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The Company measures the tax benefits recognized in the financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.  The application of income tax law is inherently complex.  As such, the Company is required to make judgments regarding income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to the Company's judgments which can materially affect amounts recognized in the balance sheets and statements of operations.  The result of the assessment of the Company's tax positions did not have an impact on the financial statements for the years ended February 28 or 29, 2012 or 2011.  The Company's federal tax returns for all years after 2008 and the Company's state tax returns after 2007 are subject to future examination by tax authorities for all of the Company's tax jurisdictions.  The Company does not have any significant unrecognized tax benefits and does not anticipate a significant increase or decrease in unrecognized tax benefits within the next twelve months. Amounts are recognized for income tax related interest and penalties as a component of general and administrative expense in the statement of income and are immaterial for years ended February 28 or 29, 2012 and 2011.