Note 10 - Income Taxes

12 Months Ended

Apr. 30, 2012

Income Tax Disclosure [Text Block]

10.           INCOME TAXES

Deferred income taxes reflect the net tax effects 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 Company's deferred tax assets and liabilities at April 30, 2012 and 2011 are as follows (in thousands):

	Years Ended April 30,
	2012			2011
Deferred tax assets:
Current:
Accrued expenses		196			197
Inventories		490			465
Other		66			--
Total deferred tax assets		752			662
Deferred tax liabilities:
Property and equipment		(345	)		(298	)
Other		(140	)		(98	)
Total deferred tax liabilities		(485	)		(396	)
Net deferred tax asset	$	267		$	266

	Years Ended April 30,
	2012			2011
Current tax expense	$	747		$	554
Deferred tax expense (benefit)		(1	)		(91	)
	$	746		$	463

The income tax benefit differs from amounts computed at the statutory federal income tax rate as follows (in thousands):

	Years Ended April 30,
	2012			2011
Expense at federal statutory rate	$	668		$	454
Permanent tax differences		(16	)		(27	)
State tax expense, net of federal tax		98			67
Change in ASC 740 reserve		--			(16	)
Other		(4	)		(15	)
	$	746		$	463

The Company 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 the ultimate settlement with the relevant tax authority.

In previous fiscal years, the Company recognized an additional $97,000 of income tax expense, including $14,000 relating to penalties and interest, for potential state income tax liability in various states for tax years 2003 through 2009.  During fiscal 2011, the state income tax liability was reduced by $16,000 as a result of expiring statute of limitations.  There is no remaining potential state income tax liability as of April 30, 2012 and 2011 relating to this previously recognized liability.  As of April 30, 2012, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate.  A reconciliation of the total amounts of unrecognized tax benefits for the years ended April 30, 2012 and 2011 are presented below (in thousands):

	Years Ended April 30,
	2012		2011
Unrecognized tax benefits, beginning of period	$	--	$	16
Lapse of statute of limitations		--		(16	)
Unrecognized tax benefits, end of period	$	--	$	--

The Company recognizes interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within tax expense.

It is reasonably possible that a change in the gross balance of unrecognized tax benefits may occur within the next 12 months.  An estimate of the range of such gross changes cannot be made at this time.  However, the Company does not expect the changes to have a significant impact on its effective tax rate or expected cash payments for income taxes within the next 12 months.

The Company files income tax returns in the U.S. federal and various state jurisdictions.  Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.  With a few exceptions, we are no longer subject to Internal Revenue Service (IRS), state or local income tax examinations by tax authorities for the years before the fiscal year ended 2007.  As of April 30, 2012, the Company is not currently under examination by any taxing jurisdiction.