Management reviews and assesses long-lived assets, which includes property, plant, and
equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In performing the review for recoverability, management estimates the future cash flows expected to result
from the use of the asset. If the sum of the undiscounted expected cash flows is less than the carrying amount of the asset, an impairment loss is recognized based upon the estimated fair value of the asset.
Share-Based Compensation Plans
The
Company accounts for employee share-based compensation under the fair value method and uses an option pricing model for estimating the fair value of stock options at the date of grant.
Share Repurchase Program
The Company has
a share repurchase program, pursuant to which it had been authorized to repurchase up to 2,632,500 shares of the Companys common stock in the open market. On January 20, 2014 the Board of Directors of the Company approved a
one-time
continuation of the stock repurchase program, and authorized the Company to repurchase up to 1,500,000 additional shares of the Companys common stock in the open market. There is no minimum number of
shares required to be repurchased under the program. During the fiscal year ended February 28, 2019, the Company repurchased 8,858 shares at an average price of $1.12 per share, which were added to treasury shares on the consolidated balance
sheet, and during the fiscal year ended February 28, 2018, the Company repurchased 3,600 shares at an average price of $1.24 per share. Under this program, an additional 490,186 shares remain authorized to be repurchased by the Company at
February 28, 2019.
Income Taxes
The Company accounts for income taxes under the asset and liability method which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been recognized in the Companys consolidated financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected
future events other than possible enactments of changes in the tax laws or rates.
Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has determined that a valuation allowance is needed due to recent taxable net operating
losses, the sale of profitable divisions and the limited taxable income in the carry back periods. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the
enactment date.
Deferred income taxes as of February 28, 2019 and February 28, 2018 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 and certain tax loss carryforwards, less any valuation allowance.
The Company accounts for uncertain tax positions as required in that a position taken or expected to be taken in a tax return is recognized in
the consolidated financial statements when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest
amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of February 28, 2019 and February 28, 2018 the Company did not have any material unrecognized tax benefits.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as components of interest expense and other
expense, respectively, in arriving at pretax income. The Company did not have any interest and penalties accrued as of February 28, 2019 and February 28, 2018.
The Companys tax years ended February 28, 2018, 2017 and 2016 remain open to examination by the Internal Revenue Service
(IRS).
Earnings (Loss) per Share
Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common
shares outstanding during each year. Shares issued or repurchased during the year are weighted for the portion of the year that they were outstanding. Diluted earnings per share is calculated in a manner consistent with that of basic earnings per
share while giving effect to all potentially dilutive common shares that were outstanding during the period.
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