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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes |
14. | Income Taxes
Income from continuing operations before income taxes was generated in the United States and globally as follows:
($ in thousands) |  | 2011 |  |  | 2010 |
Domestic |  | $ | 8,810 |  |  | $ | 1,978 |
Foreign |  |  | 2,913 |  |  |  | 1,698 |
|  | $ | 11,723 |  |  | $ | 3,676 |
The Company has not recorded deferred income taxes on the undistributed earnings of its foreign subsidiaries because of management's intent to indefinitely reinvest such earnings. At December 31, 2011, the aggregate undistributed earnings of the foreign subsidiaries amounted to $2.5 million. Upon distribution of these earnings in the form of dividends or otherwise, the Company may be subject to U.S. income taxes and foreign withholding taxes. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable. Income tax provision from continuing operations consisted of the following for the years ended December 31:
($ in thousands) |  | 2011 |  |  | 2010 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 2,280 |  |  | $ | 1,257 |
State |  |  | 391 |  |  |  | 316 |
Foreign |  |  | 227 |  |  |  | 197 |
|  |  | 2,898 |  |  |  | 1,770 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 213 |  |  |  | (209 | )
State |  |  | 129 |  |  |  | (190 | )
Foreign |  |  | 171 |  |  |  | — |
|  |  | 513 |  |  |  | (399 | )
|  | $ | 3,411 |  |  | $ | 1,371 |
The income tax provision from continuing operations differs from the statutory rate due to the following:
($ in thousands) |  | 2011 |  |  | 2010 |
Tax expense at statutory rate |  | $ | 3,975 |  |  | $ | 1,243 |
Increase (decrease) in tax resulting from: |  |  |  |  |  |  |  |
State income tax, net of federal benefit |  |  | 460 |  |  |  | 144 |
Domestic Production Activities deduction |  |  | (134 | ) |  |  | (132 | )
Change in uncertain tax position reserves |  |  | (34 | ) |  |  | (254 | )
Permanent differences |  |  | 285 |  |  |  | 317 |
Intangible tax basis valuation adjustment |  |  | (546 | ) |  |  | — |
Other |  |  | (665 | ) |  |  | 53 |
Foreign permanent differences |  |  | 70 |  |  |  | — |
|  | $ | 3,411 |  |  | $ | 1,371 |
Deferred income taxes reflect the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and tax credit carryforwards. The net deferred tax assets consisted of the following at December 31:
($ in thousands) |  | 2011 |  |  | 2010 |
Gross deferred tax assets: |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 143 |  |  | $ | 153 |
Reserves on assets |  |  | 709 |  |  |  | 820 |
Inventory |  |  | 19 |  |  |  | 21 |
Stock-based compensation awards |  |  | 211 |  |  |  | 171 |
Minimum pension/post retirement |  |  | 1,497 |  |  |  | 1,129 |
Goodwill and intangibles |  |  | 538 |  |  |  | 514 |
State and local net operating loss carry-forwards |  |  | 184 |  |  |  | 298 |
Valuation allowances |  |  | (141 | ) |  |  | (184 | )
|  |  | 3,160 |  |  |  | 2,922 |
Gross deferred tax liabilities: |  |  |  |  |  |  |  |
Deferred state taxes |  |  | (8 | ) |  |  | (52 | )
Foreign deferral on assets |  |  | (171 | ) |  |  | — |
Depreciation |  |  | (1,145 | ) |  |  | (1,032 | )
Prepaid expenses |  |  | (642 | ) |  |  | (529 | )
|  |  | (1,966 | ) |  |  | (1,613 | )
Net deferred tax assets |  | $ | 1,194 |  |  | $ | 1,309 |
Reconciliation to amounts reported in the balance sheet follows:
($ in thousands) |  | 2011 |  |  | 2010 |
Net current deferred tax assets included in other current assets |  | $ | 517 |  |  | $ | 707 |
Net non-current deferred tax assets |  |  | 848 |  |  |  | 602 |
Net current deferred tax liabilities included in accounts payable and accrued expenses |  |  | (171 | ) |  |  | — |
Net deferred tax asset |  | $ | 1,194 |  |  | $ | 1,309 |
As of December 31, 2011, the Company has state and local net operating loss carry forwards of $2.9 million which expire from 2017 to 2030. The Company has recorded a valuation allowance on $2.0 million of these state and local net operating loss carry forwards to reflect expected realization. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry forward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based on this assessment, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2011. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The Company accounts for uncertain tax positions pursuant to FASB Accounting Standards Codification Topic 740. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. A reconciliation of the beginning and ending amount of uncertain tax position reserves is as follows:
($ in thousands) |  | 2011 |  |  | 2010 |
Balance as of January 1 |  | $ | 83 |  |  | $ | 337 |
Reductions for expirations on tax positions of prior years |  |  | (34 | ) |  |  | (254 | )
Balance as of December 31 |  | $ | 49 |  |  | $ | 83 |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. During the years ended December 31, 2011 and 2010, the Company recognized approximately $2,000 and $14,000 respectively, in interest, resulting in additions to other liabilities of $2,000 and $3,000 after expirations, as of December 31, 2011 and 2010, respectively. The favorable settlement of all uncertain tax positions would impact the Company's effective income tax rate. Tax years going back to 2008 remain open for Federal and all significant states. The Company was notified on February 27, 2012 by the Internal Revenue Service that the Company's 2009 and 2010 Federal income tax returns have been selected for audit. At this early stage of the process we cannot estimate the results or the impact the audit will have on our financial position or results of operations.

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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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