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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes |
Income Taxes |
10. Income Taxes The provision for income taxes from continuing operations consisted of the following: (in thousands)
|  | Years Ended December 31, |
|  | 2011 |  | 2010 |  | 2009 |
Current |  |  |  |  |  |  |
Federal |  | $ | 21,040 |  | $ | 20,310 |  | $ | 15,521 |
State |  | 4,427 |  | 3,896 |  | 3,111 |
Foreign |  | 4,582 |  | 3,417 |  | (18 | )
Deferred |  |  |  |  |  |  |
Federal |  | (574 | ) | 3,673 |  | 14 |
State |  | (358 | ) | 1,726 |  | 49 |
Foreign |  | (1,231 | ) | 217 |  | (1,321 | )
|  | $ | 27,886 |  | $ | 33,239 |  | $ | 17,356 |
Income and loss from continuing operations before income taxes for the years ended December 31, 2011, 2010 and 2009, consisted of the following: (in thousands)
|  | Years Ended December 31, |
|  | 2011 |  | 2010 |  | 2009 |
Domestic |  | $ | 68,961 |  | $ | 78,183 |  | $ | 49,934 |
Foreign |  | 9,825 |  | (146 | ) | (18,457 | )
|  | $ | 78,786 |  | $ | 78,037 |  | $ | 31,477 |
Reconciliations between the statutory federal income tax rates and the Company’s effective income tax rates as a percentage of income before income taxes for its continuing operations were as follows: (in thousands)
|  | Years Ended December 31, |
|  | 2011 |  | 2010 |  | 2009 |
Federal tax rate |  | 35.0 | % | 35.0 | % | 35.0 | %
State taxes, net of federal benefit |  | 3.4 | % | 4.9 | % | 7.0 | %
Tax benefit of domestic manufacturing deduction |  | (2.5 | )% | (2.3 | )% | (2.9 | )%
Change in valuation allowance |  | (0.3 | )% | 3.3 | % | 7.6 | %
Difference between United States statutory and foreign local tax rates |  | 0.3 | % | 2.0 | % | 7.6 | %
Change in uncertain tax position |  | (0.0 | )% | (0.7 | )% | (1.7 | )%
Other |  | (0.5 | )% | 0.4 | % | 2.5 | %
Effective income tax rate |  | 35.4 | % | 42.6 | % | 55.1 | %
The tax effects of the significant temporary differences that constitute the deferred tax assets and liabilities at December 31, 2011, 2010 and 2009, were as follows: (in thousands)
|  | December 31, |
|  | 2011 |  | 2010 |  | 2009 |
Current deferred tax assets |  |  |  |  |  |  |
State tax |  | $ | 1,586 |  | $ | 1,197 |  | $ | 1,061 |
Workers’ compensation |  | 2,123 |  | 1,816 |  | 1,719 |
Health claims |  | 549 |  | 519 |  | 391 |
Vacation liability |  | 865 |  | 786 |  | 843 |
Allowance for doubtful accounts |  | 291 |  | 351 |  | 1,614 |
Inventories |  | 4,796 |  | 5,141 |  | 7,150 |
Sales incentive and advertising allowances |  | 408 |  | 399 |  | 781 |
State tax credit carry forward |  | — |  | 125 |  | 126 |
Accrued rent reserves |  | — |  | — |  | 5 |
Intangible rights write-off |  | 194 |  | — |  | — |
Acquisition expenses |  | 477 |  | — |  | — |
Unrealized foreign exchange gain or loss |  | 57 |  | 86 |  | 96 |
Other, net |  | 428 |  | 271 |  | 549 |
|  | 11,774 |  | 10,691 |  | 14,335 |
Less valuation allowances |  | — |  | (502 | ) | (365 | )
|  | $ | 11,774 |  | $ | 10,189 |  | $ | 13,970 |
Long-term deferred tax assets (liabilities) |  |  |  |  |  |  |
Depreciation |  | $ | (3,067 | ) | $ | (1,614 | ) | $ | 259 |
Goodwill and other intangibles amortization |  | (314 | ) | (1,447 | ) | (3,704 | )
Deferred compensation related to stock options |  | 5,485 |  | 4,841 |  | 6,562 |
Uncertain tax positions’ unrecognized tax benefits |  | 1,115 |  | 1,438 |  | 1,250 |
Keymark investments basis difference |  | — |  | 663 |  | 447 |
Non-United States tax loss carry forward |  | 5,912 |  | 5,548 |  | 5,011 |
Tax effect on cumulative translation adjustment |  | (812 | ) | (826 | ) | (799 | )
Other |  | 811 |  | 641 |  | 1,095 |
|  | 9,130 |  | 9,244 |  | 10,121 |
Less valuation allowances |  | (6,279 | ) | (6,665 | ) | (4,523 | )
|  | $ | 2,851 |  | $ | 2,579 |  | $ | 5,598 |
The total deferred tax assets for the years ended December 31, 2011, 2010 and 2009, were $21.4 million, $19.2 million and $25.0 million, respectively. The total deferred tax liabilities for the years ended December 31, 2011, 2010, and 2009, were $6.7 million, $6.5 million and $5.5 million, respectively. At December 31, 2011, the Company had $29.5 million of tax loss carryforwards in various non-United States taxing jurisdictions. Tax loss carryforwards of $0.9 million, $2.9 million, $0.7 million and $0.8 million will expire in 2013, 2014, 2015 and 2016, respectively, if not utilized. The remaining tax losses can be carried forward indefinitely. At December 31, 2011, 2010 and 2009, the Company had deferred tax valuation allowances of $6.3 million, $7.2 million and $4.9 million, respectively. The valuation allowance decreased $0.9 million for the year ended December 31, 2011, and increased $2.3 million and $2.5 million for the years ended December 31, 2010 and 2009, respectively. The Company does not provide for federal income taxes on the undistributed earnings of its international subsidiaries because such earnings are reinvested and, in the Company’s opinion, will continue to be reinvested indefinitely. At December 31, 2011, 2010 and 2009, the Company had not provided for federal income taxes on undistributed earnings of $28.5 million, $14.6 million and $12.9 million, respectively, from its international subsidiaries. Should these earnings be distributed in the form of dividends or otherwise, the Company would be subject to both United States income taxes and withholding taxes in various international jurisdictions. These taxes may be partially offset by United States foreign tax credits. Determination of the related amount of unrecognized deferred United States income taxes is not practicable because of the complexities associated with this hypothetical calculation. United States federal income taxes are provided on the earnings of the Company’s foreign branches, which are included in the United States federal income tax return. A reconciliation of the beginning and ending amounts of unrecognized tax benefits in 2011, 2010 and 2009 was as follows:* (in thousands)
|  | 2011 |  | 2010 |  | 2009 |
Balance at January 1 |  | $ | 5,862 |  | $ | 6,422 |  | $ | 6,705 |
Additions based on tax positions related to prior years |  | 18 |  | 1,236 |  | 640 |
Reductions based on tax positions related to prior years |  | (681 | ) | (537 | ) | (632 | )
Additions for tax positions of the current year |  | 570 |  | 951 |  | 902 |
Settlements |  | (362 | ) | (59 | ) | — |
Lapse of statute of limitations |  | (724 | ) | (2,151 | ) | (1,193 | )
Balance at December 31 |  | $ | 4,683 |  | $ | 5,862 |  | $ | 6,422 |
* Foreign currency translation amounts are included within each line as applicable. Included in the balance of unrecognized tax benefits at December 31, 2011, 2010 and 2009, are tax positions of $1.1 million, $1.2 million and $1.5 million, respectively, which, if recognized, would reduce the effective tax rate. The Company does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next 12 months. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense, which is a continuation of the Company’s historical accounting policy. During the years ended December 31, 2011, 2010 and 2009, accrued interest decreased by $48 thousand, $463 thousand and $88 thousand, respectively, as a result of the reversal of accrued interest associated with the lapse of statutes of limitations. At December 31, 2011, 2010 and 2009, the Company had accrued $1.1 million, $1.1 million and $1.6 million, respectively, for the potential payment of interest, before income tax benefits. At December 31, 2011, the Company remained subject to United States federal income tax examinations for the tax years 2008 through 2011. In addition, the Company remained subject to state, local and foreign income tax examinations primarily for the tax years 2006 through 2011.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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