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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes |
13. | Income Taxes
Income before income taxes was generated in the United States and globally as follows:
(Table only in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Domestic |  | $ | 14,638 |  |  | $ | 5,442 |  |  | $ | 13,745 |
Foreign |  |  | 1,576 |  |  |  | 1,013 |  |  |  | 1,618 |
|  | $ | 16,214 |  |  | $ | 6,455 |  |  | $ | 15,363 |
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, 2014, the aggregate undistributed earnings of the foreign subsidiaries amounted to $3.9 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 consisted of the following for the years ended December 31:
(Table only in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 4,672 |  |  | $ | (1,660 | ) |  | $ | 2,765 |
State |  |  | 947 |  |  |  | (191 | ) |  |  | 805 |
Foreign |  |  | 1,624 |  |  |  | 623 |  |  |  | 489 |
|  |  | 7,243 |  |  |  | (1,228 | ) |  |  | 4,059 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (3,033 | ) |  |  | 1,000 |  |  |  | 377 |
State |  |  | (367 | ) |  |  | 178 |  |  |  | 110 |
Foreign |  |  | (706 | ) |  |  | (52 | ) |  |  | (33 | )
|  |  | (4,106 | ) |  |  | 1,126 |  |  |  | 454 |
|  | $ | 3,137 |  |  | $ | (102 | ) |  | $ | 4,513 |
The income tax provision differs from the statutory rate due to the following:
(Table only in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Tax expense at statutory rate |  | $ | 5,675 |  |  | $ | 2,194 |  |  | $ | 5,223 |
Increase (decrease) in tax resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State income tax, net of federal benefit |  |  | 416 |  |  |  | 311 |  |  |  | 694 |
Domestic Production Activities deduction |  |  | (670 | ) |  |  | (295 | ) |  |  | (415 | )
Change in uncertain tax position reserves |  |  | 388 |  |  |  | 599 |  |  |  | 110 |
Permanent differences |  |  | 58 |  |  |  | 510 |  |  |  | — |
Impact of foreign rate differences and adjustments |  |  | 296 |  |  |  | (295 | ) |  |  | (94 | )
Current and prior years R&D tax credits |  |  | (3,026 | ) |  |  | (3,649 | ) |  |  | (1,100 | )
Other |  |  | — |  |  |  | 112 |  |  |  | 95 |
Non-deductible transaction costs |  |  | — |  |  |  | 411 |  |  |  | — |
|  | $ | 3,137 |  |  | $ | (102 | ) |  | $ | 4,513 |
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 carry forwards. The net deferred tax liabilities consisted of the following at December 31:
(Table only in thousands) |  | 2014 |  |  | 2013 |
Gross deferred tax assets: |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 106 |  |  | $ | 120 |
Reserves on assets |  |  | 870 |  |  |  | 805 |
Stock-based compensation awards |  |  | 43 |  |  |  | 552 |
Revaluation of debt |  |  | 721 |  |  |  | — |
State, foreign and local net operating loss carry-forwards |  |  | 206 |  |  |  | 242 |
Deferred state taxes |  |  | 885 |  |  |  | — |
Valuation allowances |  |  | (87 | ) |  |  | (149 | )
|  |  | 2,744 |  |  |  | 1,570 |
Gross deferred tax liabilities: |  |  |  |  |  |  |  |
Foreign deferral on assets |  |  | (739 | ) |  |  | (348 | )
Depreciation |  |  | (2,189 | ) |  |  | (3,215 | )
Goodwill and intangibles |  |  | (21,867 | ) |  |  | (24,904 | )
Prepaid expenses |  |  | (719 | ) |  |  | (551 | )
Inventory |  |  | (868 | ) |  |  | (790 | )
Revaluation of debt |  |  | — |  |  |  | (283 | )
Minimum pension / post retirement |  |  | (397 | ) |  |  | (1,423 | )
|  |  | (26,779 | ) |  |  | (31,514 | )
Net deferred liabilities |  | $ | (24,035 | ) |  | $ | (29,944 | )
Reconciliation to amounts reported in the balance sheet follows:
|  | 2014 |  |  | 2013 |
Net current deferred tax assets included in other current assets |  | $ | 1,066 |  |  | $ | 699 |
Net non-current deferred tax assets |  |  | 3,003 |  |  |  | 66 |
Net current deferred tax liabilities included in accounts payable and accrued expenses |  |  | (1,739 | ) |  |  | — |
Net non-current deferred tax liabilities |  |  | (26,365 | ) |  |  | (30,009 | )
Net deferred tax liability |  | $ | (24,035 | ) |  | $ | (29,244 | )
As of December 31, 2014, the Company has state and local net operating loss carry forwards of $1.9 million which expire from 2018 to 2031. The Company has recorded a valuation allowance on these state and local net operating loss carry forwards to reflect expected realization. The Company also has net operating loss carry forwards in overseas jurisdictions totaling $2.6 million. A full valuation allowance has been established against these losses. As of both December 31, 2014 and 2013, the Company has recorded a valuation reserve in the amount of $0.1 million. The changes in the valuation allowance resulted in additional income tax expense (benefit) of $0.1 million, $8,000, and $(43,000) in 2014, 2013, and 2012, respectively. 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, 2014. 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 ASC 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. The reserve for uncertain tax positions is not expected to change significantly in the next twelve months. A reconciliation of the beginning and ending amount of uncertain tax position reserves included in other liabilities on the Consolidated Balance Sheets is as follows:
(Table only in thousands) |  | 2014 |  |  | 2013 |
Balance as of January 1, |  | $ | 763 |  |  | $ | 162 |
Additions for tax positions current year |  |  | 188 |  |  |  | 120 |
Additions for tax positions taken in prior years |  |  | 266 |  |  |  | 481 |
Reductions for expirations on tax positions of prior years |  |  | (51 | ) |  |  | — |
Balance as of December 31, |  | $ | 1,166 |  |  | $ | 763 |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The favorable settlement of all uncertain tax positions would impact the Company’s effective income tax rate. Tax years going back to 2009 remain open for examination by Federal and all significant state and foreign authorities.

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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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