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Note 6 - Income Taxes | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 6 – Income Taxes The components of income before income taxes are:
|  | 2017 |  |  | 2016 |  |  | 2015 |
United States |  | $ | 33,277 |  |  | $ | 33,101 |  |  | $ | 35,391 |
Foreign countries |  |  | 6,101 |  |  |  | 3,381 |  |  |  | 1,875 |
Total |  | $ | 39,378 |  |  | $ | 36,482 |  |  | $ | 37,266 |
The components of income tax expense are:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Current expense: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 16,489 |  |  | $ | 6,960 |  |  | $ | 11,465 |
Foreign |  |  | 1,243 |  |  |  | 547 |  |  |  | 292 |
State and local |  |  | 1,231 |  |  |  | 581 |  |  |  | 963 |
|  |  | 18,963 |  |  |  | 8,088 |  |  |  | 12,720 |
Deferred expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (5,968 | ) |  |  | 3,429 |  |  |  | (443 | )
Foreign |  |  | 51 |  |  |  | (184 | ) |  |  | (112 | )
State and local |  |  | (223 | ) |  |  | 266 |  |  |  | (8 | )
|  |  | (6,140 | ) |  |  | 3,511 |  |  |  | (563 | )
Income tax expense |  | $ | 12,823 |  |  | $ | 11,599 |  |  | $ | 12,157 |
The reconciliation between income tax expense and the amount compute d by applying the statutory federal income tax rate of 35% to income before income taxes is:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Income taxes at statutory rate |  | $ | 13,782 |  |  | $ | 12,769 |  |  | $ | 13,043 |
State and local income taxes, net of federal tax benefit |  |  | 555 |  |  |  | 576 |  |  |  | 680 |
Research and development tax credits |  |  | (295 | ) |  |  | (371 | ) |  |  | (380 | )
Domestic production activities deduction |  |  | (1,191 | ) |  |  | (822 | ) |  |  | (964 | )
Lower foreign taxes differential |  |  | (842 | ) |  |  | (820 | ) |  |  | (476 | )
Uncertain tax positions |  |  | 346 |  |  |  | (93 | ) |  |  | 26 |
Valuation allowance |  |  | 100 |  |  |  | - |  |  |  | (59 | )
Federal tax reform – deferred rate change |  |  | (1,624 | ) |  |  | - |  |  |  | - |
Deemed mandatory repatriation |  |  | 1,370 |  |  |  | - |  |  |  | - |
Foreign withholding tax |  |  | 600 |  |  |  | - |  |  |  | - |
Other |  |  | 22 |  |  |  | 360 |  |  |  | 287 |
Income tax expense |  | $ | 12,823 |  |  | $ | 11,599 |  |  | $ | 12,157 |
The Company made income tax payments of $13.5 million, $7.8 million, and $13.5 million in 2017, 2016, and 2015, respectively. Deferred income tax assets and liabilities consist of:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |
Inventories |  | $ | 1,131 |  |  | $ | 721 |  |  | $ | 1,664 |
Accrued liabilities |  |  | 1,872 |  |  |  | 3,139 |  |  |  | 2,450 |
Postretirement health benefits obligation |  |  | 3,844 |  |  |  | 7,449 |  |  |  | 7,547 |
Pension |  |  | - |  |  |  | - |  |  |  | 3,443 |
Other |  |  | 583 |  |  |  | 879 |  |  |  | 292 |
Total deferred tax assets |  |  | 7,430 |  |  |  | 12,188 |  |  |  | 15,396 |
Valuation allowance |  |  | (459 | ) |  |  | (277 | ) |  |  | (277 | )
Net deferred tax assets |  |  | 6,971 |  |  |  | 11,911 |  |  |  | 15,119 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (8,715 | ) |  |  | (16,119 | ) |  |  | (18,059 | )
Pension |  |  | (997 | ) |  |  | (3,017 | ) |  |  | - |
Foreign withholding tax |  |  | (600 | ) |  |  | - |  |  |  | - |
Total deferred tax liabilities |  |  | (10,312 | ) |  |  | (19,136 | ) |  |  | (18,059 | )
Net def erred tax liabilities |  | $ | (3,341 | ) |  | $ | (7,225 | ) |  | $ | (2,940 | )
The Company has state tax credit carryforwards of $644,000 and $518,000 as of December 31, 2017 and 2016, respectively, that will expire incrementally between 2018 and 2022. The Compa ny has a valuation allowance of $459,000 as of December 31, 2017 and $277,000 as of December 31, 2016 against certain of its deferred tax assets. ASC 740 requires that a valuation allowance be recorded against deferred tax assets when it is more likely than not that some or all of a Company’s deferred tax assets will not be realized based on available positive and negative evidence. Total unrecognized tax benefits were $797,000 and $492,000 at December 31, 2017 and 2016, respectively. The total amount of unrecognized tax benefits that, if ultimately recognized, would reduce the Company’s annual effective tax rate were $674,000 and $397,000 at December 31, 2017 and 2016, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Balance at beginning of year |  | $ | 492 |  |  | $ | 567 |  |  | $ | 576 |
Additions based on tax positions related to the current year |  |  | 239 |  |  |  | 101 |  |  |  | 113 |
Additions based on tax positions related to prior years |  |  | 165 |  |  |  | - |  |  |  | - |
Reductions due to l apse of applicable statute of limitations |  |  | (99 | ) |  |  | (108 | ) |  |  | (101 | )
Settlements |  |  | - |  |  |  | (68 | ) |  |  | (21 | )
Balance at end of year |  | $ | 797 |  |  | $ | 492 |  |  | $ | 567 |
The Company is subject to income taxes in the U.S. federal and various state, local and foreign jurisdictions. Income tax reg ulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2013. The Company has $56,000 of unrecognized tax benefits recorded for periods for which the relevant statutes of limitations expire in the next 12 months. The Company recognizes interest and pen alties related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $168,000, $98,000 and $116,000 for the payment of interest and penalties at December 31, 2017, 2016 and 2015, respectively. On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), resulting in significant modifications to existing law. The Company follows the guidance in SEC Staff Accounting Bulletin 118 (“SAB 118” ), which provides additional clarification regarding the application of ASC 740 in situations where the Company does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act for the reporting period in which the Tax Act was enacted. SAB 118 provides for a measurement period beginning in the reporting period that includes the Tax Act’s enactment date and ending when the Company has obtained, prepared, and analyzed the information needed in order to complete the accounting requirements but in no circumstances should the measurement period extend beyond one year from the enactment date. The Company recorded $0. 4 million provisional net tax expense in the fourth quarter of 2017 to reflect the effects of the Tax Act. This net expense included a provisional noncurrent income tax payable in the amount of $1.4 million related to the one -time deemed repatriation transition tax on previously unrepatriated foreign earnings and a one -time provisional benefit of $1.6 million, which consisted primarily of the re-measurement of U.S. deferred tax assets and liabilities reflecting the change in the U.S. federal rate from 35% to 21%. The Company has also recorded a $0.6 million foreign withholding tax. The provisional estimates are based on the Company's initial analysis of the Tax Act. Given the significant complexity of the Tax Act, anticipated guidance from the U. S. Treasury about implementing the Tax Act, and the potential for additional guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board related to the Tax Act, these estimates may be adjusted during 2018.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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