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Note M - Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Text Block]

Note M – Income Taxes


The components of income before income taxes are as follows:


   

2011

   

2010

   

2009

 
                   
Domestic   $ 117,497     $ 88,308     $ 54,666  
Foreign     41,295       37,549       26,123  
                         
    $ 158,792     $ 125,857     $ 80,789  

The income tax provision (benefit) consists of the following:


   

2011

   

2010

   

2009

 
Current:                  
Federal   $ 43,953     $ 36,482     $ 23,896  
State and local     8,560       8,253       4,403  
Foreign     6,814       6,195       4,310  
      59,327       50,930       32,609  
Deferred:                        
Federal     1,588       (651 )     (1,748 )
State and local     676       (147 )     (179 )
      2,264       (798 )     (1,927 )
                         
    $ 61,591     $ 50,132     $ 30,682  

A reconciliation between taxes computed at the federal statutory rate and the effective tax rate is as follows:


   

December 31,

 
   

2011

   

2010

   

2009

 
                         
Income taxes at federal statutory rate     35.0 %     35.0 %     35.0 %
State and local income taxes - net of federal income tax benefit     3.9       3.9       2.9  
Nondeductible items     0.3       0.2       0.2  
Valuation allowance (reversal)     (0.4 )     0.5       —  
Other     —       0.2       (0.1 )
                         
Effective rate     38.8 %     39.8 %     38.0 %

The Company applies the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.


Note M – Income Taxes (continued)


In accordance with accounting guidance, the Company has opted to classify interest and penalties that would accrue according to the provisions of relevant tax law as income tax expense on the Consolidated Statements of Income. The Company determines the amount of interest expense to be recognized by applying the applicable statutory rate of interest to the difference between the tax position recognized and the amount previously taken or expected to be taken on a tax return. The Company’s tax years 2008 through 2011 remain open to examination for most taxing authorities. The Company has no unrecognized tax benefits recorded as of the year ended December 31, 2011. Although it is difficult to predict what would occur to change the Company’s unrecognized tax benefits over the next twelve months, the Company believes that there should be no change during the next twelve months.


As of December 31, 2011, the Company has realized investment losses of $1,254 available to offset future investment gains and thus reduce future taxable income. A deferred tax asset has been established for recognized capital losses on securities which can only be offset to the extent of capital gains. These losses have a five year carryforward. Due to uncertainty in the marketplace and, with the exception of 2011, due to the Company’s recent history of recording little or no capital gains, the Company has recorded a valuation allowance for the entire balance of the investment losses reflecting management’s belief that it is more likely than not that the Company will not generate a sufficient amount of capital gains to offset previously recognized capital losses prior to the five year expiration period of these losses.


The components of deferred tax assets and liabilities are as follows:


   

December 31,

 
   

2011

   

2010

 
Current deferred tax assets:            
Receivable allowances   $ 7,246     $ 6,068  
Inventory     1,975       1,341  
Unrealized (gain) loss     (6 )     (60 )
Accrued expenses     496       1,729  
Other     595       1,094  
                 
Gross current deferred tax asset     10,306       10,172  
Valuation allowance     (595 )     (1,094 )
                 
      9,711       9,078  
Non-current deferred tax assets (liabilities):                
Depreciation and amortization     (1,889 )     5,161  
Deferred compensation     4,902       2,583  
Deferred rent     2,388       2,174  
Amortization of goodwill     (2,504 )     (2,142 )
Other     (469 )     68  
                 
      2,428       7,844  
                 
Deferred tax assets   $ 12,139     $ 16,922