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Note 16 - Income Taxes | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
16 . | INCOME TAXES:
The components of Income tax benefit from continuing operations are as follows (in thousands):
|  | Year Ended December 31, |
|  | 201 7 |  |  | 201 6 |  |  | 201 5 |
Current : |  |  |  |  |  |  |  |  |  |  |  |
Federa l |  | $ | (454 | ) |  | $ | (740 | ) |  | $ | (5,076 | )
Stat e |  |  | 49 |  |  |  | (102 | ) |  |  | 35 |
Total current income tax benefi t |  |  | (405 | ) |  |  | (842 | ) |  |  | (5,041 | )
Deferred : |  |  |  |  |  |  |  |  |  |  |  |
Federa l |  |  | (766 | ) |  |  | (2,883 | ) |  |  | (5,524 | )
Stat e |  |  | 71 |  |  |  | (373 | ) |  |  | 2,042 |
Total deferred income tax benefi t |  |  | (695 | ) |  |  | (3,256 | ) |  |  | (3,482 | )
|  | $ | (1,100 | ) |  | $ | (4,098 | ) |  | $ | (8,523 | )
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate income tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one -time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has estimated its provision for income taxes in accordance with the Act and guidance available as of the date of this filing and as a result has recorded $0.9 million as additional income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the remeasurement of certain deferred income tax assets and liabilities, based on the rates at which they are expected to reverse in the future, was $0.6 million. The provisional amount related to the one -time transition tax on the mandatory deemed repatriation of foreign earnings was $0.2 million based on cumulative foreign earnings of $1.1 million. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118" ) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, the Company has determined that the $0.6 million of the deferred income tax expense recorded in connection with the remeasurement of certain deferred tax assets and liabilities and the $0.2 million of current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate as of December 31, 2017. Additional work is necessary for a more detailed analysis of the Company’s deferred income tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current income tax expense when the analysis is complete. The difference between the Company ’s effective income tax rate and the federal statutory income tax rate of 35% is explained as follows (dollar amounts in thousands):
|  | Year Ended December 31, |
|  | 201 7 |  |  | 201 6 |  |  | 201 5 |
Income tax benefit at federal statutory rate of 35 % |  | $ | (3,322 | ) |  | $ | (3,755 | ) |  | $ | (9,133 | )
State benefit, net of federal income tax effec t |  |  | (472 | ) |  |  | (286 | ) |  |  | (440 | )
Federal and state income tax credit s |  |  | 36 |  |  |  | (154 | ) |  |  | (5,060 | )
Disallowed domestic manufacturing deductio n |  |  | - |  |  |  | - |  |  |  | 630 |
Change in valuation allowanc e |  |  | 1,570 |  |  |  | 585 |  |  |  | 2,059 |
Excess income tax shortfall on share-based compensatio n |  |  | 765 |  |  |  | - |  |  |  | - |
Effect of Tax Cuts and Jobs Act of 201 7 |  |  | 874 |  |  |  | - |  |  |  | - |
Uncertain income tax position s |  |  | (562 | ) |  |  | (4 | ) |  |  | 1,275 |
Goodwill impairment (nondeductible ) |  |  | - |  |  |  | - |  |  |  | 1,849 |
Nondeductible expense s |  |  | 63 |  |  |  | 63 |  |  |  | 91 |
Nontaxable adjustment to contingent consideratio n |  |  | - |  |  |  | (580 | ) |  |  | 103 |
Othe r |  |  | (52 | ) |  |  | 33 |  |  |  | 103 |
Income tax benefi t |  | $ | (1,100 | ) |  | $ | (4,098 | ) |  | $ | (8,523 | )
Effective income tax rat e |  |  | (11.6 | )% |  |  | (37.8 | )% |  |  | (32.4 | )%
The income tax effect of temporary differences that give rise to significant portions of deferred income tax assets and liabilities is presented below (in thousands):
|  | December 31 , |
|  | 201 7 |  |  | 201 6 |
Deferred income tax assets : |  |  |  |  |  |  |  |
Costs and estimated earnings in excess of billings on uncompleted contracts, ne t |  | $ | - |  |  | $ | 1,270 |
Accrued employee benefit s |  |  | 2,806 |  |  |  | 5,025 |
Inventorie s |  |  | 296 |  |  |  | 563 |
Trade receivable, ne t |  |  | 105 |  |  |  | 199 |
Net operating loss carryforward s |  |  | 9,850 |  |  |  | 15,637 |
Tax credit carryforward s |  |  | 5,478 |  |  |  | 5,069 |
Other asset s |  |  | 1,201 |  |  |  | 1,830 |
Othe r |  |  | 81 |  |  |  | 1,018 |
|  |  | 19,817 |  |  |  | 30,611 |
Valuation allowanc e |  |  | (10,413 | ) |  |  | (8,217 | )
|  |  | 9,404 |  |  |  | 22,394 |
Deferred income tax liabilities : |  |  |  |  |  |  |  |
Costs and estimated earnings in excess of billings on uncompleted contracts, ne t |  |  | (110 | ) |  |  | - |
Property and equipmen t |  |  | (9,524 | ) |  |  | (22,380 | )
Intangible asset s |  |  | (433 | ) |  |  | (819 | )
Prepaid expense s |  |  | (278 | ) |  |  | (477 | )
|  |  | (10,345 | ) |  |  | (23,676 | )
Net deferred income tax liabilitie s |  | $ | (941 | ) |  | $ | (1,282 | )
In assessing the ability to realize deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income 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 income tax liabilities, projected future taxable income, taxable income in carryback periods and tax planning strategies in making this assessment. Because the Company has a recent history of generating cumulative losses, management did not consider projections of future taxable income as persuasive evidence for the recoverability of its deferred income tax assets. The Company believes it is more likely than not it will realize the benefits of its deductible differences as of December 31, 2017, net of any valuation allowance. As of December 31, 2017, the Company had approximately $35.9 million of federal net operating loss carryforwards, which expire on various dates between 2035 and 2036, and $3.0 million of federal income tax credit carryforwards, which expire on various dates between 2023 and 2036. As of December 31, 2017, the Company also had approximately $51.5 million of state net operating loss carryforwards, which expire on various dates between 2019 and 2036, and state income tax credit carryforwards of $4.2 million, which begin to expire in 2018. During the year ended December 31, 2016, the Company determined that it no longer considers the earnings of its Mexican subsidiary to be indefinitely reinvested outside the United States. This change was made to allow the Company to more efficiently manage its cash balances and working capital. The change did not have a significant effect on the Company’s income taxes. The Company files income tax returns in the United States Federal jurisdiction, in a limited number of foreign jurisdictions and in many state jurisdictions. With few exceptions, the Company is no longer subject to United States Federal , state or foreign income tax examinations for years before 2013. A summary of the changes in the unrecognized income tax benefits is presented below (in thousands):
|  | Year Ended December 31, |
|  | 201 7 |  |  | 201 6 |  |  | 201 5 |
Unrecognized income tax benefits, beginning of yea r |  | $ | 4,874 |  |  | $ | 4,874 |  |  | $ | 2,313 |
Decreases for lapse in statute of limitation s |  |  | (520 | ) |  |  | - |  |  |  | (1,199 | )
Increases for positions taken in prior year s |  |  | - |  |  |  | - |  |  |  | 3,716 |
Decreases for positions taken in prior years |  |  | (238 | ) |  |  | - |  |  |  | - |
Increases for positions taken in the current yea r |  |  | - |  |  |  | - |  |  |  | 44 |
Unrecognized income tax benefits, end of yea r |  | $ | 4,116 |  |  | $ | 4,874 |  |  | $ | 4,874 |
The Company does not believe it is reasonably possible that the total amounts of unrecognized income tax benefits will change in the following twelve months; however, actual results could differ from those currently expected. Effectively all of the unrecognized income tax benefits would affect the Company’s effective income tax rate if recognized at some point in the future. The Company recognizes interest and penalties related to uncertain income tax positions in Income tax expense. As of December 31, 2017 and 2016, the Company had $0 and $0.1 million, respectively, of accrued interest related to uncertain income tax positions. Total interest for uncertain income tax positions did not change materially in 2017 or 2016 and decreased by approximately $0.1 million in 2015.

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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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