INCOME TAXES

12 Months Ended

Jan. 31, 2012

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 11:              INCOME TAXES

The provision (benefit) for income taxes was comprised of the following:
 

	2012		2011		2010
Current
Federal	$2,010,929		$2,106,753		$1,464,160
State	290,461		299,616		199,327
Foreign	201,565		135,327		38,537
	2,502,955		2,541,696		1,702,024
Deferred
Federal	1,112,827		429,442		377,441
State	98,191		37,892		33,304
Foreign	(13,364	)	(28,265	)	(3,991	)
	$3,700,609		$2,980,765		$2,108,778

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the net deferred tax assets (liabilities) were as follows:

	January 31,
	2012		2011
Deferred tax assets
Inventory cost capitalization	$110,306		$131,255
Pension cost	3,964,282		2,460,898
Management incentive	262,612		178,825
Stock options	458,468		363,429
Interest rate swap	135,526		101,494
Other	446,576		433,005
Total deferred tax assets	5,377,770		3,668,906
Deferred tax liabilities
Property, plant and equipment	2,348,541		2,255,538
Inventory - LIFO	320,759		333,764
Prepaid expenses	205,501		200,876
Goodwill	3,839,091		3,540,359
Total deferred tax liabilities	6,713,892		6,330,537
Net deferred tax (liabilities)	($1,336,122	)	($2,661,631	)

A reconciliation of the federal statutory rate and the Company's effective tax rate is presented as follows:

	2012				2011				2010
Computed expected
federal tax expense	$3,683,665		34.0	%	$3,100,765		34.0	%	$2,226,520		34.0	%
Manufacturing exemption	(205,457	)	(1.9	)	(207,968	)	(2.3	)	(129,428	)	(2.0	)
State income taxes,
net of federal
income tax benefit	191,704		1.8		197,747		2.2		131,556		2.0
Research and
development tax credits	(149,728	)	(1.4	)	(143,361	)	(1.5	)	(121,917	)	(1.9	)
Stock option tax expense	78,473		.7		20,076		.2		82,030		1.3
Other	101,952		.9		13,506		.1		(79,983	)	(1.2	)
Effective income taxes	$3,700,609		34.1	%	$2,980,765		32.7	%	$2,108,778		32.2	%

The Company follows the provisions of FASB ASC Topic 740, "Income Taxes", and recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.  For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.  The Company applies ASC Topic 740 to all tax positions for which the statute of limitations remains open.

During the fiscal year ended January 31, 2012, the Company performed an evaluation of its position with regards to state, federal and foreign tax matters.  The Company's conclusion was to increase the unrecognized tax benefits by $49,000 in order to account for state tax matters in the United States as a result of changes in tax positions with relevant tax authorities.

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:

	2012
Balance at February 1, 2011	$-
Increases in tax positions for prior years	-
Decreases in tax positions for prior years	-
Increases in tax positions for current year	49,000
Balance at January 31, 2012	$49,000

The Company and its subsidiaries are subject to income taxes in the U.S. federal jurisdiction, various states and foreign jurisdictions.  Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.  The following table summarizes tax years that remain subject to examination by major jurisdictions:

	Open Tax Year
	Examination in Progress	Examination Not Yet Initiated
United States
Federal	n/a	2010 - 2012
State	n/a	2008 - 2012
Canada	n/a	2007 - 2012
The Netherlands	n/a	2008 - 2012
People's Republic of China	n/a	2011 - 2012
Chile	n/a	2012