INCOME TAXES:

12 Months Ended

Sep. 30, 2011

INCOME TAXES:

INCOME TAXES:

10. INCOME TAXES:

The components of income tax expense from operations for fiscal 2011 and fiscal 2010 consisted of the following:

	2011		2010
Current: Federal	$	3,754,455	$	4,756,241
Current: State		662,083		770,017
		4,416,538		5,526,258
Deferred: Federal		1,711,375		(353,436	)
Deferred: State		154,087		(31,822	)
		1,865,462		(385,258	)
Income tax expense	$	6,282,000	$	5,141,000

The difference between the Company's income tax expense in the accompanying consolidated financial statements and that which would be calculated using the statutory income tax rate of 35% for both fiscal 2011 and fiscal 2010 on income before income taxes is as follows:

	2011			2010
Tax at statutory rate	$	5,021,112		$	4,937,384
Amortization of goodwill and other intangibles		(5,207	)		(5,207	)
Nondeductible business expenses		1,071,984			32,248
State income taxes, net of federal tax benefit		479,883			496,820
Valuation allowance, net operating losses		(165,460	)		(157,809	)
Other		(120,312	)		(162,436	)
	$	6,282,000		$	5,141,000

Temporary differences between the financial statement carrying balances and tax basis of assets and liabilities giving rise to the net deferred tax asset (liabilities) at fiscal year ends 2011 and 2010 relate to the following:

		2011			2010
Deferred tax assets:
Current:
	Allowance for doubtful accounts	$	425,373		$	591,662
	Accrued expenses		1,095,108			915,153
	Inventory		460,684			408,557
	Other		8,392			241,435
			1,989,557			2,156,807
Noncurrent:
	Property and equipment	$	198,907		$	682,411
	Net operating loss carry forwards—federal		471,926			517,968
	Net operating loss carry forwards—state		627,823			651,283
			1,298,656			1,851,662
	Total deferred tax assets		3,288,213			4,008,469
	Valuation allowance		(617,577	)		(783,037	)
	Net deferred tax assets	$	2,670,636		$	3,225,432
Deferred tax liabilities:
Current:
	Trade discounts	$	281,668		$	250,833
			281,668			250,833
Noncurrent:
	Property and equipment		1,729,853			674,726
	Goodwill		886,943			794,025
	Intangible assets		807,521			675,735
			3,424,317			2,144,486
Total deferred tax liabilities		$	3,705,985		$	2,395,319
Net deferred tax assets (liabilities):
Current		$	1,707,889		$	1,905,974
Noncurrent			(2,743,238	)		(1,075,861	)
		$	(1,035,349	)	$	830,113

At September 2011, the Company had a $0.5 million noncurrent deferred tax asset related to federal net operating loss carryforwards. These federal net operating loss carryforwards totaled approximately $1.4 million and were primarily attributable to the Company's fiscal 2002 purchase of Hawaiian Natural Water Company, Inc. ("HNWC"), a wholly owned subsidiary of the Company. The utilization of HNWC's net operating losses is limited by Internal Revenue Code Section 382 to approximately $0.1 million per year through 2022.

At September 2011, the Company had a valuation allowance of approximately $0.6 million against certain state and federal net operating losses, which more likely than not will not be utilized. The Company had no material unrecognized tax benefits, interest, or penalties during fiscal 2011 or fiscal 2010, and the Company does not anticipate any such items during the next twelve months. The Company's policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. The Company files income tax returns in the U.S. and various states and the tax years 2008 and forward remain open under U.S. and state statutes.