Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Income Taxes

v3.20.1
Note 12 - Income Taxes
 3 Months Ended
Jan. 31, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
Note
12.
Income Taxes
 
For the 
first
quarter ended
January 31, 2020
, we recorded an income tax benefit of
$1.1
million on a pretax loss of
$3.9
million, resulting in an effective tax rate of
29.5%.
For the Successor period from
December 6, 2018
to
January 31, 2019,
the Company recorded an income tax benefit of
$2.8
million on a pretax loss of
$6.4
million, resulting in a
43.2%
effective tax rate. For the Predecessor period from
November 1, 2018
to
December 5, 2018,
the Company recorded an income tax benefit of
$4.2
million on a pretax loss of
$26.8
million, resulting in an effective tax rate of
15.7%.
 
The factors impacting comparability between our effective tax rates for the periods discussed above are as follows:
 
 
(
1
)
The Predecessor recording tax expense of
$1.4
million for the period ended
December 5, 2018
related to nondeductible transaction related costs;
 
(
2
)
The Successor including
$0.7
million of tax expense in the estimated annual effective rate for the period ended
January 31, 2019
related to foreign income inclusions compared to
$0.3
million for the period ended
January 31, 2020
and
$0.0
for the Predecessor period ended
December 5, 2018;
 
(
3
)
 The impact from the reduction in the current statutory UK corporate tax rate from
19%
to
17%
for the period ended
January 31, 2020;
and
  (
4
)		 Differences in our estimated full year income before tax and the related impact on our estimated full year effective tax rate that was applied to year to date losses for the Successor periods ended
January 31, 2020
and
January 31, 2019.
 
At
January 31, 2020
and
October 31, 2019
, we had deferred tax liabilities, net of deferred tax assets, of
$68.5
million and
$69.0
million, respectively. The decrease in our net deferred tax liability is primarily due to current year operating results and reversal of existing deferred tax assets and liabilities during the period ended
January 31, 2020.
The Company has a valuation allowance of
$0.1
million as of both
January 31, 2020
and
October 31, 2019
related to foreign tax credit carryforwards where realization is more uncertain at this time due to the limited carryforward periods that exist.
 
The Company had unrecognized tax benefits of
$1.7
million as of
January 31, 2020
and
October 31, 2019
. If recognized,
none
of these benefits would favorably impact the Company's income tax expense.