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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The jurisdictional components of income before taxes consist of the following:
|  | December 31,
(in thousands) |  | 2013 |  | 2012 |  | 2011
Income before income taxes: |  |  |  |  |  |
Domestic |  | $ | 35,146 |  |  | $ | 29,390 |  |  | $ | 28,109 |
Foreign |  | 16,242 |  |  | 14,056 |  |  | 20,020 |
|  | $ | 51,388 |  |  | $ | 43,446 |  |  | $ | 48,129 |
The components of income tax expense (benefit) consist of the following:
|  | December 31,
(in thousands) |  | 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |  |
Domestic |  | $ | 10,605 |  |  | $ | 9,273 |  |  | $ | 7,771 |
Foreign |  | 3,200 |  |  | 4,919 |  |  | 5,682 |
State |  | 2,366 |  |  | 756 |  |  | 1,139 |
|  | 16,171 |  |  | 14,948 |  |  | 14,592 |
Deferred: |  |  |  |  |  |  |  |  |
Domestic |  | (1,074 | ) |  | (192 | ) |  | 397 |
Foreign |  | 249 |  |  | (363 | ) |  | 331 |
State |  | (52 | ) |  | 150 |  |  | 122 |
|  | (877 | ) |  | (405 | ) |  | 850 |
Total income taxes |  | $ | 15,294 |  |  | $ | 14,543 |  |  | $ | 15,442 |
The difference between income tax expense (benefit) for financial statement purposes and the amount of income tax expense computed by applying the domestic statutory income tax rate of 35% to income loss before income taxes consist of the following:
|  | December 31,
(in thousands) |  | 2013 |  | 2012 |  | 2011
Domestic statutory rate at 35% (34% for 2011 and 2010) |  | $ | 17,985 |  |  | $ | 15,206 |  |  | $ | 16,364 |
Increase (reduction) from: |  |  |  |  |  |  |  |  |
Jurisdictional rate differences |  | (1,959 | ) |  | (1,477 | ) |  | (1,315 | )
Goodwill impairment |  | — |  |  | 157 |  |  | 633 |
Valuation allowance |  | (114 | ) |  | 825 |  |  | — |
Stock based compensation |  | 136 |  |  | 214 |  |  | 161 |
U.S. state taxes |  | 1,496 |  |  | 589 |  |  | 740 |
Domestic Production Deduction |  | (1,162 | ) |  | (948 | ) |  | (796 | )
R&E Credit Reserve |  | (856 | ) |  | (130 | ) |  | (252 | )
Other, net |  | (232 | ) |  | 107 |  |  | (93 | )
Provision for income taxes |  | $ | 15,294 |  |  | $ | 14,543 |  |  | $ | 15,442 |
Effective tax rate |  | 30 | % |  | 33 | % |  | 32 | %
Deferred income taxes arise from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. The components of the Company’s deferred income tax assets and liabilities consist of the following:
|  | December 31,
(in thousands) |  | 2013 |  | 2012
Deferred income tax assets: |  |  |  |
Inventory basis difference |  | $ | 1,576 |  |  | $ | 1,475 |
Accounts receivable reserve |  | 201 |  |  | 299 |
Stock based compensation |  | 904 |  |  | 614 |
Pension liability |  | 1,604 |  |  | 3,595 |
Employee benefit accrual |  | 601 |  |  | 459 |
Product liability and warranty reserves |  | 1,417 |  |  | 1,120 |
Expenses not deductible for tax purposes |  | 1,064 |  |  | 487 |
Foreign net operating loss |  | 2,954 |  |  | 1,608 |
State net operating loss |  | 76 |  |  | 82 |
Other |  | 34 |  |  | 3 |
Total deferred income tax assets |  | $ | 10,431 |  |  | $ | 9,742 |
Less: Valuation allowance |  | (711 | ) |  | (825 | )
Net deferred income tax assets |  | $ | 9,720 |  |  | $ | 8,917 |
Deferred income tax liabilities: |  |  |  |  |  |
Inventory basis differences |  | $ | — |  |  | $ | (253 | )
Depreciation |  | (3,068 | ) |  | (2,867 | )
Intangible assets |  | (1,277 | ) |  | (1,011 | )
Deferred revenue |  | (66 | ) |  | (135 | )
Expenses not deductible for tax purposes |  | (461 | ) |  | (777 | )
Total deferred income tax liabilities |  | $ | (4,872 | ) |  | $ | (5,043 | )
Net deferred income tax assets |  | $ | 4,848 |  |  | $ | 3,874 |
As of December 31, 2013, the Company had foreign deferred tax assets consisting of foreign net operating losses and other tax benefits available to reduce future taxable income in a foreign jurisdiction. These foreign jurisdictions' net operating loss carryforwards are in the approximate amount of $10.6 million with an unlimited carryforward period. The Company also has state net operating loss carryforwards in the U.S. of approximately $5.0 million which will expire between 2014 to 2028. The company recorded a valuation allowance as of December 31, 2013 and 2012 due to uncertainties related to the ability to utilize some of the deferred income tax assets, primarily consisting of certain U.S. state NOLs and income tax credits, and international NOLs, before they expire. The valuation allowance is based on estimates of taxable income in the various jurisdictions in which we operate and the period over which deferred income tax assets will be recoverable. The realization of net deferred income tax assets recorded as of December 31, 2013 is primarily dependent upon the ability to generate future taxable income in certain U.S. states and international jurisdictions. Deferred income taxes have not been provided on the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and the respective tax bases of the Company’s foreign subsidiaries, based on the determination that such differences are essentially permanent in duration in that the earnings of the subsidiaries are expected to be indefinitely reinvested in foreign operations. As of December 31, 2013, the cumulative undistributed earnings of these subsidiaries approximated $138,531,000. If these earnings were not considered indefinitely reinvested, deferred income taxes would have been recorded after the consideration of foreign tax credits. At this time, it is not practicable to estimate the amount of additional income taxes that might be payable on those earnings, if distributed. The Company adopted the provisions of FASB ASC Section 740-10-25 (formerly FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”) on January 1, 2007. Unrecognized tax benefits in the amount of$257,000 and $146,000 for 2012 and 2013, respectively, are included in other noncurrent liabilities on the balance sheet. The unrecognized tax benefits, if recognized, would favorably impact our effective tax rate in a future period. We do not expect our unrecognized tax benefits disclosed above to change significantly over the next 12 months.
|  | December 31,
|  | 2013 |  | 2012
Balance as of beginning of year |  | $ | 257,000 |  |  | $ | 235,000 |
Additions for tax positions related to the current year |  | 56,000 |  |  | — |
Additions for tax positions related to prior years |  | 27,000 |  |  | 22,000 |
Reduction due to lapse of statute of limitations |  | (194,000 | ) |  | — |
Balance as of end of year |  | $ | 146,000 |  |  | $ | 257,000 |
The Company's policy is to include interest and penalty expense related to income taxes as interest and other expense, respectively. As of December 31, 2013, no interest or penalties has been accrued. The Company’s open tax years for its federal and state income tax returns are for the tax years ended 2009 through 2013. The Company's open tax years for its foreign income tax returns are for the tax years ended 2009 through 2013. On January 2, 2013, the American Taxpayer Relief Act of 2012 (Act) was enacted. The Act provided tax relief for businesses by reinstating certain tax benefits retroactively to January 1, 2012. There are several provisions of the Act that impacted the Company, most notably the extension of the Research and Development credit through 2013. Income tax accounting rules require tax law changes to be recognized in the period of enactment; as such, the additional Research and Development Credit in 2013 tax provision that related to the 2012 tax year was approximately $450,000. Currently, the Research and Development credit has not been extended for 2014.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 + Details
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