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INCOME TAXES | 12 Months Ended
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Dec. 31, 2012
INCOME TAXES |
INCOME TAXES | 5. INCOME TAXES The provision for income taxes is based on income before income taxes as follows (in thousands):
|  | For the year ended December 31, 2012 |  | For the year ended December 31, 2011 |
--- | --- | --- | --- | --- | ---
Domestic |  | $ | 3,725 |  | $ | 2,821 |
Foreign |  |  | 3,773 |  |  | 6,698 |
Income before income taxes |  | $ | 7,498 |  | $ | 9,519 |
Components of the total provision for income taxes are as follows (in thousands):
|  | For the year ended December 31, 2012 |  | For the year ended December 31, 2011 |
--- | --- | --- | --- | --- | ---
Current provision: |  |  |  |  |  |  |
Domestic |  | $ | 115 |  | $ | 302 |
Foreign |  |  | 881 |  |  | 1,190 |
Total current provision |  |  | 996 |  |  | 1,492 |
Deferred provision: |  |  |  |  |  |  |
Domestic |  |  | 1,162 |  |  | 984 |
Foreign |  |  | (57 | ) |  | 76 |
Total deferred provision |  |  | 1,105 |  |  | 1,060 |
Provision for income taxes |  | $ | 2,101 |  | $ | 2,552 |
The provision for income taxes differs from the amount determined by applying the federal statutory rate as follows (in thousands):
|  | For the year ended December 31, 2012 |  | For the year ended December 31, 2011 |
--- | --- | --- | --- | --- | ---
Tax provision, computed at statutory rate |  |  | 34.0 | % |  | 34.0 | %
State tax, net of federal impact |  |  | 3.3 | % |  | 1.7 | %
Permanent item; adjustment to contingent consideration |  |  | — | % |  | (3.9 | )%
Effect of foreign tax rate differences |  |  | (4.4 | )% |  | (4.6 | )%
Foreign tax adjustments |  |  | (1.6 | )% |  | (2.1 | )%
Adjustments to prior year accruals(1) |  |  | (1.9 | )% |  | — | %
Other |  |  | (1.4 | )% |  | 1.7 | %
Provision for income taxes |  |  | 28.0 | % |  | 26.8 | %
(1) Adjustments relate to the resolution of certain prior year income tax related matters. The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands):
|  | December 31, 2012 |  | December 31, 2011 |
--- | --- | --- | --- | --- | ---
Current deferred tax assets: |  |  |  |  |  |  |
Allowances and other |  | $ | 591 |  | $ | 587 |
Tax credit carryforwards |  |  | — |  |  | — |
Net operating loss carryforwards |  |  | 98 |  |  | 749 |
Total current deferred tax assets |  |  | 689 |  |  | 1,336 |
Valuation allowance |  |  | (50 | ) |  | (82 | )
Net current deferred tax assets |  | $ | 639 |  | $ | 1,254 |
Noncurrent deferred tax assets: |  |  |  |  |  |  |
Employee benefit plans |  | $ | 1,375 |  | $ | 1,268 |
Net operating loss carryforwards |  |  | — |  |  | — |
Goodwill and Intangibles |  |  | 1,983 |  |  | 2,349 |
Property, plant & equipment |  |  | (188 | ) |  | 50 |
Other |  |  | 933 |  |  | 659 |
Total noncurrent deferred tax assets |  | $ | 4,103 |  | $ | 4,326 |
Deferred tax liabilities: |  |  |  |  |  |  |
Acquired property, plant and equipment and intangible assets |  | $ | 638 |  | $ | 756 |
Other |  |  | 297 |  |  | 217 |
Total deferred tax liabilities |  | $ | 935 |  | $ | 973 |
During 2010, the Company acquired foreign operating losses and tax credit carryforwards in relation to its acquisition of Agile Systems Inc. in Canada. At the time of the acquisition, the Company could not conclude, on a more likely than not basis, that it would ultimately realize tax benefits from the losses and credits, and therefore valued the deferred benefit at zero. During 2012 and 2011, the Company utilized a portion of the foreign tax loss carryforward which reduced the consolidated tax provision for income taxes by $72,000 and $244,000, respectively. In addition, in 2012 the Company recorded a deferred tax asset of $66,000 for the forecasted utilization of the Company's foreign tax loss carryforward; however, the Company has not concluded that it will ultimately realize the remainder of the foreign tax carryforward on a more likely than not basis. The Company will continue to assess its ability to utilize any portion of the tax carryforward balance and whether it should adjust the amount of deferred tax asset related to this loss carryforward. Realization of the Company's recorded deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of domestic net operating losses and tax credit carryforwards. The Company has recorded a valuation allowance due to the uncertainty related to the realization of certain deferred tax assets existing at December 31, 2012. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. Management believes that it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of valuation allowances as of December 31, 2012. The Company files income tax returns in various U.S. and foreign taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before 2008. The Company is no longer subject to tax examinations in The Netherlands or Sweden for periods before 2007.

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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 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 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: 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 6: 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 7: 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 8: 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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