INCOME TAXES

6 Months Ended

Oct. 31, 2011

INCOME TAXES

INCOME TAXES

8.          INCOME TAXES

The guidance on Accounting for Uncertainty in Income Taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The liability for uncertain tax positions, if recognized, will decrease the Company’s tax expense. The Company does not anticipate that the amount of liability for uncertain tax positions existing at October 31, 2011 will change significantly within the next 12 months.  Interest and penalties related to the liability for uncertain tax positions are included in provision for income taxes.

The Company files income tax returns in the U.S. and various state and foreign jurisdictions. Most U.S. and foreign jurisdictions have 3 to 10 years of open tax years. However, all the Company’s tax years since fiscal 1998 will be open to examination by the U.S. federal and certain state tax authorities due to the Company’s overall net operating loss and/or tax credit carryforward position.

The Company recorded a tax benefit of $3,000 and a tax provision of $12,000, respectively, for the three and six months ended October 31, 2011, resulting in an effective tax rate of less than 1%.  The Company recorded a tax benefit of $18,000 and $17,000, respectively, for the three and six months ended October 31, 2010 resulting in an effective tax rate of less than 1%. The effective tax rate for the three and six months ended October 31, 2011 and 2010 reflected the effects of a full valuation allowance against the federal and state net operating loss and tax credit carryforwards due to uncertainty as to the recoverability of those items due to the Company’s continuing operating losses. The tax benefit for the three months ended October 31, 2011 and 2010, and for the six months ended October 31, 2010, and the tax provision for the six months ended October 31, 2011, is each attributable to certain state and foreign jurisdictions in which the Company operates.