INCOME TAXES

12 Months Ended

Jan. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE F — INCOME TAXES

The income tax provision is comprised of the following:

	Year Ended January 31,
	2017			2016			2015
	(In thousands)
Current
Federal		$	22,925		$	47,585		$	46,989
State and city			4,034			5,910			5,978
Foreign			6,150			7,768			5,688
			33,109			61,263			58,655
Deferred
Federal			(4,776)			3,458			1,422
State and city			(2,807)			535			(67)
Foreign			298			(456)			(560)
			(7,285)			3,537			795
Income tax expense		$	25,824		$	64,800		$	59,450
Income before income taxes
United States		$	55,363		$	149,578		$	133,709
Non-United States			22,399			29,555			34,732
		$	77,762		$	179,133		$	168,441

The significant components of the Company’s net deferred tax asset at January 31, 2017 and 2016 are summarized as follows:

	2017			2016
	(In thousands)
Deferred tax assets
Compensation		$	10,323		$	13,045
Straight-line lease			4,279			3,713
Provision for bad debts and sales allowances			11,919			11,180
Supplemental employee retirement plan			519			378
Inventory write-downs			10,163			3,581
Net operating loss			2,274			1,637
Other			2,343			1,812
Total deferred tax assets			41,820			35,346
Deferred tax liabilities
Depreciation and amortization			(14,724)			(15,981)
Intangibles			(21,347)			(21,772)
Prepaid expenses and other			(3,383)			(3,362)
Other			(817)			(507)
Total deferred tax liabilities			(40,271)			(41,622)
Net deferred tax assets (liability)		$	1,549		$	(6,276)

As of January 31, 2017 and 2016, intangible deferred tax liabilities of   $13.8 million and $14.3 million, respectively, relate to intangible assets in Switzerland. The remaining intangible assets relate primarily to the U.S.

The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the financial statements for the years ended January 31:

	2017		2016		2015
Provision for Federal income taxes at the statutory rate		35.0%		35.0%		35.0%
State and local income taxes, net of Federal tax benefit		1.0		2.4		2.3
Permanent differences resulting in Federal taxable income		9.6		3.6		2.9
Foreign tax rate differential		(1.7)		(1.4)		0.1
ASC 718 Adoption		(3.8)		—		—
Foreign tax credit		(6.5)		(3.1)		(6.5)
Other, net		(0.4)		(0.3)		1.5
Actual provision for income taxes		33.2%		36.2%		35.3%

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $32 million at January 31, 2017. Those earnings are considered indefinitely reinvested and, accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries, as applicable. At this point in time it is not practical to estimate the amount of taxes payable if the earnings were remitted.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows:

	2017		2016		2015
Balance at February 1,		1,094		1,094		1,094
Additions based on tax positions related to the current year		0		0		0
Additions for tax positions of prior years		0		0		0
Reductions for tax positions of prior years		0		0		0
Settlements		0		0		0
Lapses of statutes of limitations		0		0		0
Balance at January 31,		1,094		1,094		1,094

The Company accounts for uncertain income tax positions in accordance with ASC Topic 740 Income Taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of January 31, 2017, there was an increase in the unrecognized tax position reserve of approximately $125,000 for the current year accrual of interest and penalties on existing uncertain income tax positions reserves.

The Company’s policy on classification is to include interest in “interest and financing charges” and penalties in “selling, general and administrative expense” in the accompanying Consolidated Statements of Income. The Company and certain of its subsidiaries are subject to U.S. Federal income tax as well as income tax of multiple state, local, and foreign jurisdictions. One of its foreign subsidiaries, T.R.B. International S.A., has a ruling with the Swiss government that taxes commercial foreign sourced income at an 11.6% rate. The ruling was extended to the year ending January 31, 2018.

Of the major jurisdictions, the Company and its subsidiaries are subject to examination in the United States and various foreign jurisdictions for fiscal year 2013 and forward. It is currently under audit examination by New Jersey and Belgium for fiscal year 2010 and forward. We believe that it is reasonably possible that the total amount of unrecognized tax benefits of  $1.6 million (inclusive of tax, interest and penalties) will not change during the next twelve months due to the applicable statutes of limitations.