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Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes [Abstract]  
INCOME TAXES
14. INCOME TAXES:

The components of the provision for (benefit from) income taxes are as follows:

 

                         
    Year Ended December 31,  
    2012     2011     2010  
    (in thousands)  

Current:

                        

Federal

   $ 5,428     $ 2,639     $ (11,047 ) 

State

     130       695       45  
   

 

 

    

 

 

    

 

 

  

Total current tax expense

     5,558       3,334       (11,002 ) 
   

 

 

    

 

 

    

 

 

  

Deferred:

                        

Federal

     (296 )      5,380       9,743  

State

     259       904       (389 ) 
   

 

 

    

 

 

    

 

 

  

Total deferred tax expense

     (37 )      6,284       9,354  
   

 

 

    

 

 

    

 

 

  
    $ 5,521     $ 9,618     $ (1,648 ) 
   

 

 

    

 

 

    

 

 

  

The difference between the Company’s effective income tax rates and the statutory United States federal income tax rate of 35% is explained as follows:

 

                         
    Year Ended December 31,  
    2012     2011     2010  
    (in thousands)  

Provision (benefit) at statutory rate of 35%

   $ 7,618     $ 7,800     $ (2,481 ) 

State provision, net of federal benefit

     519       922       174  

Research and development credits

     (1,801 )      —         —    

Domestic manufacturing deduction

     (762 )      (389 )      772  

Sale of business

     —         341       —    

Change in valuation allowance

     —         872       —    

Other

     (53 )      72       (113 ) 
   

 

 

    

 

 

    

 

 

  
    $ 5,521     $ 9,618     $ (1,648 ) 
   

 

 

    

 

 

    

 

 

  

Effective tax (benefit) rate

     25.4 %      43.2 %      (23.2 )% 
   

 

 

    

 

 

    

 

 

  

The decrease in the tax rate in 2012 was primarily attributable to a research and development tax credit study for years 2010 and 2011 performed during 2012, for which a net tax benefit of $1.8 million was recorded.

 

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities is presented below:

 

                 
    December 31,  
    2012     2011  
    (in thousands)  

Current deferred tax assets:

                

Costs and estimated earnings in excess of billings on uncompleted contracts, net

   $ 1,323     $ 1,459  

Accrued employee benefits

     1,612       3,110  

Inventories

     1,393       1,337  

Trade receivable, net

     650       625  

Net operating loss carryforwards

     364       622  

Accrued professional fees

     —         77  

Other

     693       176  
   

 

 

    

 

 

  
      6,035       7,406  

Valuation allowance

     (146 )      (350 ) 
   

 

 

    

 

 

  
      5,889       7,056  

Current deferred tax liabilities:

                

Prepaid expenses

     (712 )      (665 ) 
   

 

 

    

 

 

  

Current deferred tax assets, net

     5,177       6,391  
   

 

 

    

 

 

  

Noncurrent deferred tax assets:

                

Net operating loss carryforwards

     549       499  

Tax credit carryforwards

     64       102  

Accrued employee benefits

     3,673       2,708  

Other assets

     4,527       3,617  

Other

     17       219  
   

 

 

    

 

 

  
      8,830       7,145  

Valuation allowance

     (794 )      (576 ) 
   

 

 

    

 

 

  
      8,036       6,569  

Noncurrent deferred tax liabilities:

                

Property and equipment

     (23,290 )      (27,157 ) 
   

 

 

    

 

 

  

Noncurrent deferred tax liabilities, net

     (15,254 )      (20,588 ) 
   

 

 

    

 

 

  

Net deferred tax liabilities

   $ (10,077 )    $ (14,197 ) 
   

 

 

    

 

 

  

As of December 31, 2012, the Company had approximately $18 million of state net operating loss carryforwards which expire on various dates between 2018 and 2030. The Company also had state tax carryforwards of $298,000, which begin to expire in 2019.

The Company considers the earnings of the Mexican subsidiary to be indefinitely reinvested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Should the Company decide to repatriate the foreign earnings, the income tax provision would be adjusted in the period it is determined that the earnings will no longer be indefinitely reinvested outside the United States, and a deferred tax liability of approximately $600,000 related to the United States federal and state income taxes and foreign withholding taxes on approximately $1.7 million of undistributed foreign earnings would be recorded.

 

A summary of the changes in the unrecognized tax benefits during the years ended December 31, 2012, 2011 and 2010 is presented below (in thousands):

 

                         
    2012     2011     2010  

Unrecognized tax benefits, beginning of year

   $ 309     $ 125     $ 185  

Decreases for settlements

     —         —         (60 ) 

Increases for positions taken in prior years

     3,571       10       —    

Decreases for positions taken in prior years

     (184 )      —         —    

Increases for positions taken in the current year

     1,549       174       —    
   

 

 

    

 

 

    

 

 

  

Unrecognized tax benefits, end of year

   $ 5,245     $ 309     $ 125  
   

 

 

    

 

 

    

 

 

  

The Company does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will change in the following twelve months; however, actual results could differ from those currently expected. Of the balance of unrecognized tax benefits, $1.4 million would affect the Company’s effective tax rate if recognized at some point in the future.

The Company files income tax returns in the United States Federal jurisdiction, in a limited number of foreign jurisdictions, and in many state jurisdictions. The Company is currently under examination by the Internal Revenue Service for years 2009 and 2010. With few exceptions, the Company is no longer subject to United States Federal or state income tax examinations for years before 2008.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2012 and 2011, the Company has approximately $172,000 and $72,000, respectively, of accrued interest related to uncertain tax positions. Total interest for uncertain tax positions increased by approximately $100,000 in 2012, increased by approximately $8,000 in 2011, and increased by approximately $4,000 in 2010.