3.	INCOME TAXES:

Deferred taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provision of the enacted tax laws. Significant components of the Company's deferred tax liabilities and assets as of April 30, 2014 and 2013 are as follows (in thousands):

	April 30, 2014		April 30, 2013
Deferred tax liabilities:
Depreciation	$	(352)	$	(550)

Deferred tax assets:
Accounts receivable allowance		28		18
Inventory and other allowances		1,548		1,734
Vacation accruals		111		101
Total gross deferred tax assets		1,687		1,853
Less valuation allowance		-		-
Net deferred tax assets	$	1,335	$	1,303

The reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

	April 30, 2014		April 30, 2013
Statutory federal income tax rate (benefit) expense, net of noncontrolling interest		34.0%		(34.0)%
State income tax net of federal benefits		0.0%		0.0%
Permanent tax		26.9%		3.7%
Other		(38.0)%		(54.3)%
		22.9%		(84.6)%

Income tax expense:
Deferred income tax (benefit)	$	(33)	$	(136)
Current income tax (benefit)		66		(680)
Total income tax expense (benefit)	$	33	$	(816)

Current income tax expense (benefit) of $66 and $(680) are comprised of $66 and $(650) in federal income tax and $0 and $(30) in state income tax for the years ended April 30, 2014 and 2013, respectively.

The Company has accrued (refundable) income taxes due to federal and state taxing authorities of approximately $0 and $(1,395) for the years ended April 30, 2014 and 2013, respectively.

The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its financial condition, results of operations or cashflow. Therefore, no reserve for uncertain income tax position, interest or penalties, have been recorded.

The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. Federal tax examinations for tax years beginning on May 1, 2010 and prior. There are no current tax examinations.