Income Taxes

12 Months Ended

Apr. 30, 2012

Income Taxes [Abstract]

INCOME TAXES

NOTE H—INCOME TAXES

U.S. and foreign income before income tax expense for the years ended April 30 are as follows:

	2012		2011
Domestic	$	106,965	$	1,854,577
Foreign		1,549,530		1,326,971
Income before Income Taxes	$	1,656,495	$	3,181,548

Provision for Income Taxes

The income tax provision for the years ended April 30 consists of the following:

	2012			2011
Current:
Federal	$	(78,639	)	$	192,990
State		(9,698	)		77,707
Foreign		272,928			399,283
Total Current		184,591			669,980
Deferred:
Federal		65,388			465,138
State		38,102			68,396
Foreign		234,090			—
Total Deferred		377,580			533,534
Provision for income taxes	$	522,171		$	1,203,514

The difference between the income tax provision and the amounts computed by applying the statutory Federal income tax rates to income before tax expense for the years ended April 30 are as follows:

	2012			2011
U.S. Federal provision:
At Statutory Rate	$	563,246		$	1,081,726
State Taxes		18,748			91,829
Foreign Tax Differential		(19,823	)		(51,886	)
Employment Credits		(71,944	)		—
Other		31,944			81,845
Total	$	522,171		$	1,203,514

Deferred Tax Assets and Liabilities

Significant temporary differences that result in deferred tax assets and liabilities at April 30, are as follows:

	2012			2011
Deferred Tax Assets:
Federal & State NOL Carryforward	$	39,783		$	—
Reserves and Accruals		605,366			384,336
Stock Based Compensation		51,201			—
Inventory		1,148,245			1,093,398
Other Intangibles		(87,310	)		(36,318	)
Deferred Rent		408,965			313,161
Allowance for Doubtful Accounts		69,186			58,499
Other		30,296			—
Total Gross Deferred Tax Assets		2,265,732			1,813,076
Less: Val. Allowance		(12,342	)		—
Total Deferred Tax Assets	$	2,253,390		$	1,813,076
Deferred Tax Liabilities:
Other Intangibles	$	(36,648	)	$	(77,872	)
Property, Machinery & Equipment		(3,561,010	)		(3,034,692	)
Deferred Flat Tax Liability (Net)		(292,800	)		—
Total Gross Deferred Tax Liabilities	$	(3,890,458	)	$	(3,112,564	)
Net Deferred Tax Asset/(Liability)	$	(1,637,068	)	$	(1,299,488	)

The above amounts are classified in the Consolidated Balance Sheets at April 30, are as follows:

	2012			2011
Current assets:
Deferred income taxes	$	1,840,751		$	1,536,233
Non-current liabilities:
Deferred income taxes		(3,477,819	)		(2,835,721	)
Net Deferred Tax Asset/(Liability)	$	(1,637,068	)	$	(1,299,488	)

The Company has not provided U.S. deferred taxes for a significant portion of undistributed earnings of the Company’s foreign subsidiaries. The Company’s intent is to keep unrepatriated funds indefinitely reinvested outside of the United States and current plans do not demonstrate a need to fund U.S. operations. It is not practicable to estimate the amount of additional taxes that may be payable upon distribution.

Unrecognized Tax Benefits

The Company has no unrecognized tax benefits at April 30, 3012 and 2011. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

	2012		2011
Beginning Balance	$	—	$	50,038
Tax positions related to current year		—		—
Tax positions related to prior years		—		—
Reductions due to settlements		—		—
Reductions due to lapses in statutes of limitations		—		(50,038	)
Ending Balance	$	—	$	—

For the fiscal year ended April 30, 2012 and 2011, the amount of consolidated worldwide liability for uncertain tax positions that impacted the Company’s effective tax rate was $0 and $50,038, respectively.

Other

Interest related to tax positions taken in the Company’s tax returns are recorded in income tax expense in the Consolidated Statements of Income. The Company did not record penalties in the Consolidated Statements of Income.

During the fiscal year ended April 30, 2011, the Company completed an examination with the Internal Revenue Service related to fiscal years April 30, 2008 and April 30, 2009. The completion of the examination had no impact on the amount of the unrecognized tax benefits. The settlement of the examination resulted in an increase to tax expense of $6,143 related to interest on a deficiency notice.

The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to state, local or foreign examinations by tax authorities for fiscal years before 2007. The Company is no longer subject to U.S. Federal examinations by tax authorities for fiscal years before 2010.