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Note 9 - Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Tax Disclosure [Text Block] |
(9) | Income Taxes
The components of the provision for income taxes are as follows (in thousands):
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | (171 | ) |  | $ | (6,272 | )
State |  |  | (439 | ) |  |  | 31 |  |  |  | (410 | )
Foreign |  |  | 906 |  |  |  | 859 |  |  |  | 405 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 11,592 |  |  |  | (1,965 | ) |  |  | (2,610 | )
State |  |  | 2,281 |  |  |  | (1,205 | ) |  |  | (332 | )
Foreign |  |  | 70 |  |  |  | (125 | ) |  |  | (2,148 | )
Income tax expense (benefit) |  | $ | 14,410 |  |  | $ | (2,576 | ) |  | $ | (11,367 | )
A reconciliation between the statutory federal income tax rate and the effective income tax rate is as follows (in thousands):
|  | 2011 |  |  | 2010 |  |  | 2009 |
Loss before income taxes |  | $ | (2,652 | ) |  | $ | (2,472 | ) |  | $ | (23,840 | )
Statutory federal income tax rate |  |  | 34 | % |  |  | 34 | % |  |  | 35 | %
Income tax expense (benefit) at statutory federal rate |  |  | (902 | ) |  |  | (840 | ) |  |  | (8,344 | )
State income taxes, net of federal tax benefit |  |  | 2 |  |  |  | (74 | ) |  |  | (482 | )
Valuation allowance |  |  | 15,565 |  |  |  | (1,249 | ) |  |  | (1,758 | )
Effect of lower foreign taxes |  |  | (231 | ) |  |  | (174 | ) |  |  | (154 | )
Release of state tax reserves |  |  | (47 | ) |  |  | (174 | ) |  |  | (595 | )
Other items, net |  |  | 23 |  |  |  | (65 | ) |  |  | (34 | )
Income tax expense (benefit) |  | $ | 14,410 |  |  | $ | (2,576 | ) |  | $ | (11,367 | )
Effective tax rate |  |  | (543.4 | )% |  |  | 104.2 | % |  |  | 47.7 | %
Temporary differences that gave rise to deferred tax assets and liabilities are as follows (in thousands):
|  | 2011 |  |  | 2010 |
Deferred tax assets: |  |  |  |  |  |
Deferred revenue |  | $ | 4,711 |  |  | $ | 4,481 |
Accrued rents |  |  | 2,414 |  |  |  | 2,743 |
Net operating loss carryforwards |  |  | 1,770 |  |  |  | 2,229 |
Intangible assets |  |  | 1,837 |  |  |  | 1,794 |
Deferred compensation |  |  | 2,218 |  |  |  | 1,768 |
Accrued bonuses |  |  | 91 |  |  |  | 1,012 |
Carryforward of tax credits |  |  | 2,251 |  |  |  | 931 |
Receivable and investment write-offs |  |  | 840 |  |  |  | 619 |
Stock compensation |  |  | 179 |  |  |  | 179 |
Depreciation |  |  | 743 |  |  |  | - |
Other |  |  | 1,834 |  |  |  | 1,730 |
|  |  | 18,888 |  |  |  | 17,486 |
Less: Valuation allowance |  |  | 16,126 |  |  |  | 561 |
Total deferred tax assets |  |  | 2,762 |  |  |  | 16,925 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | - |  |  |  | (1,515 | )
Other |  |  | (1,925 | ) |  |  | (586 | )
Total deferred tax liabilities |  |  | (1,925 | ) |  |  | (2,101 | )
Net deferred tax asset |  | $ | 837 |  |  | $ | 14,824 |
We evaluate the realizability of our deferred tax assets on a quarterly basis. As the Company has incurred a cumulative book loss over the three year period ended December 31, 2011, management evaluated the realizability of the Company’s deferred tax assets. The Company performed an analysis of all available evidence, both positive and negative, consistent with the provisions of ASC 740-10-30-17. Some of the evidence evaluated includes our historical operating performance, the macroeconomic factors contributing to the recent fiscal loss for which the tax benefits have been fully realized by the carryback availability, and our forecast of future taxable income, including the availability of prudent and feasible tax planning strategies. The three-year cumulative loss is a significant piece of negative evidence and while management believes that it is primarily a result of losses that were primarily attributable to the significant economic conditions experienced in 2009 and not an indication of continuing operations, ASC 740 requires that objective historical evidence be given more weight than subjective evidence, such as forecasts of future income. Accordingly, in the fiscal 2011 fourth quarter, the Company recorded a $15.6 million valuation allowance on its US deferred tax assets. Included in the deferred tax asset is $0.6 million related to state net operating loss carryforwards for which a valuation allowance of $0.6 million has been recorded and $1.2 million related to net operating loss carryforwards in foreign jurisdictions. Net operating loss carryforwards in foreign jurisdictions total $4.3 million and $5.7 million as of December 31, 2011 and January 1, 2011, respectively. Although net operating losses in foreign jurisdictions do not expire, a valuation allowance of $0.6 million was recorded at December 31, 2011 and January 1, 2011. Also included in the deferred tax asset in $2.3 million related to foreign tax credits for which a valuation allowance of $2.3 million has been recorded. The Company has not provided for United States income taxes on the accumulated but undistributed earnings of its non-U.S. subsidiaries of $20.5 million and $18.0 million as of December 31, 2011 and January 1, 2011, respectively, as the Company intends to indefinitely reinvest these undistributed earnings. However, if any portion were to be distributed, the related U.S. tax liability may be reduced by foreign income taxes paid on these earnings. Determination of the unrecognized deferred tax liability related to these undistributed earnings is not practicable because of the complexities with its hypothetical calculation. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance as of January 2, 2010 |  | $ | 570 |
Lapse of statute |  |  | (166 | )
Settlements |  |  | (141 | )
Balance as of January 1, 2011 |  | $ | 263 |
Lapse of statute |  |  | (50 | )
Balance as of December 31, 2011 |  | $ | 213 |
As of December 31, 2011 and January 1, 2011, approximately $0.2 million and $0.3 million respectively, of the unrecognized tax benefits would impact the Company’s provision for income taxes and effective tax rate if recognized. In the normal course of business, the Company provides for uncertain tax positions and the related interest and penalties and adjusts its unrecognized tax benefits and accrued interest and penalties accordingly. During the next fiscal year, it is reasonably possible to reduce unrecognized tax benefits by $8,000 either because the tax positions are sustained on audit or expiration of statute of limitations. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There was approximately $40,000 of accrued interest related to uncertain tax positions as of December 31, 2011 and January 1, 2011. The Company’s income before income taxes from domestic and foreign operations (which include the United Kingdom, Canada, France and Ireland), are as follows (in thousands):
|  | 2011 |  |  | 2010 |  |  | 2009 |
Domestic |  | $ | (6,200 | ) |  | $ | (8,744 | ) |  | $ | (23,500 | )
Foreign |  |  | 3,548 |  |  |  | 6,272 |  |  |  | (340 | )
Total |  | $ | (2,652 | ) |  | $ | (2,472 | ) |  | $ | (23,840 | )
The following tax years remain open in the Company’s major taxing jurisdictions as of December 31, 2011:
United States (Federal) | 2008 through 2011
United Kingdom | 2006 through 2011
Canada |  |  | 2009 through 2011
France |  |  | 2007 through 2011
Ireland |  |  | 2007 through 2011

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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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