Income Taxes (Tables)

12 Months Ended

Jan. 31, 2023

Income Tax Disclosure [Abstract]

Components of Income before Income Taxes

The components of income (loss) before income taxes are as follows:

	2023		2022		2021
(In thousands)
Domestic	$	1,773	$	5,046	$	(1,193	)
Foreign		1,637		1,988		3,372
	$	3,410	$	7,034	$	2,179

Components of Provision for Income Taxes

The components of the provision for income taxes are as follows:

	2023			2022			2021
(In thousands)
Current:
Federal	$	902		$	(183	)	$	1,272
State		313			76			224
Foreign		870			501			420
		2,085			394			1,916
Deferred:
Federal	$	(1,053	)	$	180		$	(910	)
State		(315	)		177			(189	)
Foreign		32			(146	)		78
		(1,336	)		211			(1,021	)
	$	749		$	605		$	895

Reconciliation of income tax provision/(benefit) With The Amount Computed By Applying The Statutory Federal Income Tax Rate To The Income Before Income Tax Provision/(benefit)

Total income tax provision differs from the expected tax provision as a result of the following:

	2023			2022			2021
(In thousands)
Income Tax Provision at Statutory Rate	$	716		$	1,477		$	458
Change in Valuation Allowance		182			57			(81	)
Foreign Rate Differential		157			61			197
Change in Reserves Related to ASC 740 Liability		93			(245	)		(10	)
Denmark Statutory Audit		—			—			341
Meals and Entertainment		—			9			11
Canada Withholding Taxes		—			—			62
Global Intangible Low Taxed Income		—			—			14
Foreign Derived Intangible Income		(180	)		(55	)		(150	)
R&D Credits		(160	)		(180	)		(157	)
Share Based Compensation		(52	)		(95	)		171
Return to Provision Adjustment		(22	)		368			(2	)
State Taxes, Net of Federal Tax Effect		(2	)		143			28
PPP Loan Forgiveness		—			(937	)		—
Other		17			2			13
	$	749		$	605		$	895

Tax Effects of Temporary Differences that gave Rise to Significant Portions of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities are as follows:

	January 31,
(In thousands)	2023			2022
Deferred Tax Assets:
Inventory	$	2,710		$	2,159
Honeywell Royalty Liability		3,008			2,655
State R&D Credits		1,851			1,925
Share-Based Compensation		620			593
Bad Debt		180			213
Warranty Reserve		258			198
Compensation Accrual		248			322
Net Operating Loss		135			152
ASU 842 Adjustment – Lease Liability		53			93
Unrecognized State Tax Benefits		58			64
Foreign Tax Credit		154			154
Deferred Service Contract Revenue		90			61
Section 174 Capitalization*		1,175			—
Other		281			224
	10,821			8,813
Deferred Tax Liabilities:
Accumulated Tax Depreciation in Excess of Book Depreciation		1,037			455
Intangibles		694			767
ASU 842 Adjustment – Lease Liability		50			90
Other		180			318
	1,961			1,630
Subtotal		8,860			7,183
Valuation Allowance		(2,120	)		(1,778	)
Net Deferred Tax Assets	$	6,740		$	5,405

* Beginning in fiscal 2023, changes to Section 174 of the Internal Revenue Code made by the Tax Cuts and Jobs Act of 2017 no longer permit an immediate deduction for research and development expenditures in the tax year that such costs are incurred. These costs are capitalized resulting in an increase in deferred tax assets of $1.2 million.

Deferred taxes are reflected in the consolidated balance sheet as follows:

	January 31,
	2023			2022
Deferred Tax Assets		6,907			5,591
Deferred Tax Liabilities		(167	)		(186	)
Total Net Deferred Tax Assets	$	6,740		$	5,405

Changes in Balance of Unrecognized Tax Benefits, Excluding Interest and Penalties

	2023			2022			2021
(In thousands)
Balance, beginning of the year	$	303		$	384		$	362
Increases in prior period tax positions		24			63			59
Increases in current period tax positions		136			67			5
Reductions related to lapse of statutes of limitations		(49	)		(211	)		(42	)
Balance, end of the year	$	414		$	303		$	384