Income Taxes

6 Months Ended

Jul. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. As a part of this evaluation, the Company assesses all available positive and negative evidence,

including future reversals of existing taxable temporary differences, projected future taxable income, the availability of tax carrybacks, tax-planning strategies, and results of recent operations, to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. Valuation allowances of $254,000, $231,000 and $216,000 as of July 31, 2026, January 31, 2026 and July 31, 2025, respectively, are needed for certain state net operating loss carryforwards to reduce the carrying amount of deferred tax assets to an amount that is more likely than not to be realized. The net change in the valuation allowance for the three months ended July 31, 2026 was an increase of $24,000, compared to no change for July 31, 2025. The net change in the valuation allowance for the six months ended July 31, 2026 and 2025 was an increase of $23,000 and a decrease of $20,000, respectively.

For the three months ended July 31, 2026 and 2025, the effective income tax rates were 23.3% and 28.1%, respectively. For the six months ended July 31, 2026 and 2025, the effective income tax rates were 22.5% and 28.0%, respectively. Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes.

As of July 31, 2026 income taxes payable of $239,000 were included in other long-term liabilities on the accompanying unaudited condensed consolidated balance sheets. As of July 31, 2025, income taxes payable of $257,000 and $14,000 were included in other long-term liabilities and income tax payable, respectively, on the accompanying unaudited condensed consolidated balance sheets.

The January 31, 2023 and subsequent fiscal years remain open for examination by the IRS and some state jurisdictions. The January 31, 2022 and subsequent fiscal years remain open for the remaining state jurisdictions. The Company is not currently under federal or state examination.