INCOME TAXES (Tables)

12 Months Ended

Jan. 31, 2013

Income tax expense (benefit) is summarized as follows:

	Years Ended January 31,
	2013			2012			2011
	(in thousands)
Current:
Federal	$	684		$	1,669		$	679
State		25			376			268
Foreign		2,569			3,231			2,663
Subtotal		3,278			5,276			3,610
Deferred:
Federal		942			889			(1,206	)
State		220			21			35
Foreign		(929	)		(175	)		(317	)
Subtotal		233			735			(1,488	)
Equity adjustment		140			5			721
Total	$	3,651		$	6,016		$	2,843

Reconciliation of Income Taxes to the Statutory Rate

Actual income tax expense (benefit) differs from that obtained by applying the statutory federal income tax rate of 34% to income before income taxes as follows:

	Years Ended January 31,
	2013			2012			2011
	(in thousands)
Computed expected tax expense	$	3,499		$	5,712		$	1,888
State income taxes, net of federal income tax expense		208			580			491
Incremental tax benefit from foreign operations		(1,355	)		(1,945	)		(1,474	)
Non-deductible equity compensation		913			898			335
Foreign withholding taxes		928			981			776
Net change in valuation allowance		(826	)		(336	)		99
Net change in contingency reserve		(68	)		147			91
Non-deductible expenses		296			354			969
Benefit of tax credits		(446	)		(1,437	)		(456	)
Subpart F Income		313			784			383
Rate change impact		164			(61	)		20
Other		25			339			(279	)
	$	3,651		$	6,016		$	2,843

Components of Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities are as follows:

	January 31,
	2013			2012
	(in thousands)
Deferred tax assets:
Allowance for doubtful accounts and sales adjustments	$	689		$	713
Accrued vacation		1,946			1,850
Tax credits		8,417			7,455
Deferred revenue		4,135			5,607
Net operating loss carry forwards		12,011			12,066
Accrued expenses - other		1,906			1,751
Section 263(a) interest capitalization		385			395
Equity compensation		4,856			5,338
Other		1,176			1,165
Total deferred tax assets		35,521			36,340
Less valuation allowance		(10,417	)		(11,008	)
Deferred tax assets, net of valuation allowance	$	25,104		$	25,332
Deferred tax liabilities:
Unrecognized capital gain		944			914
Depreciation and amortization		1,352			(352	)
Other comprehensive income		1,507			2,823
Other		456			307
Total deferred tax liabilities		4,259			3,692
Total net deferred tax assets	$	20,845		$	21,640
Recorded as:
Current portion of deferred tax assets		4,426			4,430
Non-current portion of deferred tax assets		17,301			17,969
Current portion of deferred tax liabilities (in current deferred tax assets)		(12	)		(75	)
Non-current portion of deferred tax liabilities (in non-current deferred tax assets)		(870	)		(684	)
Total net deferred tax assets	$	20,845		$	21,640

Gross Amounts of Unrecognized Tax Benefits

The following table reconciles the gross amounts of unrecognized tax benefits at the beginning and end of the period:

	Years Ended January 31,
	2013			2012
	(in thousands)
Unrecognized tax benefits at beginning of the year	$	2,649		$	2,502
Increases as a result of tax positions taken in a prior period		42			258
Increases as a result of tax positions taken in the current period		39			69
Reduction as a result of a lapse of the statute of limitations		(130	)		(180	)
Decreases as a result of tax settlements		(19	)		¾
Unrecognized tax benefit at end of year	$	2,581		$	2,649

List of Open Tax Year by Jurisdiction

The Company files U.S. federal, state, and foreign income tax returns in jurisdictions with varying statute of limitations. The years that may be subject to examination will vary by jurisdiction. Below is a list of our material jurisdictions and the years open for audit as of fiscal 2013:

Jurisdiction	Years Open for Audit
U.S. Federal	FY10 and beyond
California	FY09 and beyond
Michigan	FY09 and beyond
New Jersey	FY09 and beyond
Australia	FY09 and beyond
France	FY10 and beyond
India	FY98 and beyond
Ireland	FY09 and beyond
United Kingdom	FY10 and beyond