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Income Taxes
9 Months Ended
Oct. 31, 2013
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

For the three months ended October 31, 2013, the Company’s income tax provision and effective tax rate, including discrete items, were $128 and 19.9%, respectively. For the nine months ended October 31, 2013, the Company’s income tax benefit and effective tax rate, including discrete items, were $528 and 39.1%, respectively. For the three and nine months ended October 31, 2012, the Company’s income tax provision was $217 and $549, respectively, and the Company’s effective tax rate, including discrete items, was 57.7% and 33.2%, respectively, for the same periods. For the three and nine months ended October 31, 2013, the effective income tax rate differed from the federal statutory rate mainly due to nondeductible compensation offset by the tax benefit of federal and state research and development credits. The effective tax rate for the three and nine months ended October 31, 2012 does not include a benefit for federal research and development credits, as the credit was not extended until the fourth quarter of fiscal year 2013. For the three and nine months ended October 31, 2013 and 2012, the effective income tax rate was impacted discretely by foreign exchange gains and losses, loss on extinguishment of debt, and for 2012 only, mark-to-market adjustments on the Company’s former warrants and former equity participation right, for which there was no tax provision.

The Company does not expect that its unrecognized tax benefit will change significantly within the next twelve months. The Company and one or more of its subsidiaries file United States federal income tax returns and tax returns in various state and foreign jurisdictions. With limited exceptions, the Company is no longer subject to federal, state, local or foreign examinations for years prior to January 31, 2009. However, carryforward attributes that were generated prior to January 31, 2010 may still be adjusted upon examination by state or local tax authorities if they either have been or will be used in a future period.

Under Section 382 of the Internal Revenue Code of 1986, as amended, substantial changes in the Company’s ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset its taxable income. Specifically, this limitation may arise in the event of a cumulative change in ownership of the Company of more than 50% within a three-year period. The Company’s management has determined that, as of October 31, 2013, it had not experienced an ownership change for purposes of Section 382. However, future transactions in the Company’s common stock could trigger an ownership change for purposes of Section 382, which could limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset the Company’s taxable income, if any. Any such limitation, whether as the result of sales of common stock by the Company’s existing stockholders or sales of common stock by the Company, could have a material adverse effect on the Company’s results of operations in future years.