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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Components of the income tax expense (benefit) are as follows (in thousands):
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |
Federal | $ | 15,225 |  |  | $ | 12,072 |  |  | $ | 4,550 |
State | 3,322 |  |  | 1,450 |  |  | 1,211 |
Foreign | 1,432 |  |  | 891 |  |  | 883 |
Total current | 19,979 |  |  | 14,413 |  |  | 6,644 |
Deferred: |  |  |  |  |
Federal | 1,336 |  |  | (18,836 | ) |  | 1,107 |
State | (543 | ) |  | 90 |  |  | 111 |
Total deferred | 793 |  |  | (18,746 | ) |  | 1,218 |
Income tax expense (benefit) | $ | 20,772 |  |  | $ | (4,333 | ) |  | $ | 7,862 |
A reconciliation of the U.S. federal statutory tax rate to the effective income tax rate is as follows:
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
Federal statutory tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | 2.8 |  |  | 2.3 |  |  | 2.3 |
Change in valuation allowance | — |  |  | (41.0 | ) |  | (8.5 | )
Warrant liability fair value adjustment | — |  |  | (2.0 | ) |  | (8.5 | )
Domestic production activities deduction | (2.6 | ) |  | (3.0 | ) |  | (1.2 | )
Other | 1.3 |  |  | (0.8 | ) |  | 0.9 |
Effective income tax rate | 36.5 | % |  | (9.5 | )% |  | 20.0 | %
Deferred income taxes reflect the tax effect of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the value reported for income tax purposes, at the enacted tax rates expected to be in effect when the differences reverse. The components of deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2013 |  | 2012
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 11,665 |  |  | $ | 12,285 |
Allowance for doubtful accounts | 383 |  |  | 262 |
Inventory valuation reserves | 1,503 |  |  | 1,109 |
Equity compensation | 3,693 |  |  | 4,216 |
Intangible assets and goodwill | — |  |  | 13,061 |
Accrued compensation | 598 |  |  | — |
Other | 1 |  |  | 2 |
Total gross deferred tax assets | 17,843 |  |  | 30,935 |
Valuation allowance | (856 | ) |  | (835 | )
Total deferred tax assets, net | 16,987 |  |  | 30,100 |
Deferred tax liabilities: |  |  |
Property and equipment | (12,374 | ) |  | (8,227 | )
Intangible assets and goodwill | (9,587 | ) |  | — |
Convertible debt | (5,020 | ) |  | (4,785 | )
Prepaid insurance and other | (47 | ) |  | (520 | )
Total gross deferred tax liabilities | (27,028 | ) |  | (13,532 | )
Net deferred tax (liabilities) assets | $ | (10,041 | ) |  | $ | 16,568 |
Deferred taxes are presented in the balance sheets as follows (in thousands):
| December 31,
| 2013 |  | 2012
Current deferred tax assets | $ | 2,522 |  |  | $ | 1,274 |
Non-current deferred tax assets | 15,012 |  |  | 16,045 |
Non-current deferred tax liabilities | (27,575 | ) |  | (751 | )
Net deferred tax (liabilities) assets | $ | (10,041 | ) |  | $ | 16,568 |
The change in the net deferred tax assets (liabilities) relates primarily to an increase in deferred tax liabilities from the acquisition of Florida Chemical. As part of its acquisition assessment, the Company recognized a deferred tax asset related to Florida Chemical's allowance for doubtful accounts and inventory obsolescence reserve expected to be realized in the future. In addition, the Company recorded a deferred tax liability for the difference between the assigned fair values of the tangible and intangible assets acquired and the tax bases of those assets. As of December 31, 2013, the Company had U.S. net operating loss carryforwards of $30.6 million, expiring in various amounts in 2028 through 2030. The ability to utilize net operating losses and other tax attributes could be subject to a significant limitation if the Company were to undergo an “ownership change” for purposes of Section 382 of the Tax Code. The Company’s corporate organizational structure requires the filing of two separate consolidated U.S. Federal income tax returns. Taxable income of one group ("Group A") cannot be offset by tax attributes, including net operating losses of the other group ("Group B"). The Company considers all available evidence, both positive and negative, to determine whether a valuation allowance is necessary. The Company considers cumulative losses in recent years as significant negative evidence. The Company considers recent years to mean the current year plus the two preceding years. Prior to December 31, 2012, the Company has not had sufficient positive evidence to overcome the existence of a cumulative loss in Group B and thus has, prior to December 31, 2012, maintained a full valuation allowance against deferred tax assets of that group. As of December 31, 2012, Group B was no longer in a cumulative loss position. Accordingly, the Company considered the objectively verifiable positive evidence for projecting future income, which included primarily determining the average of the pre-tax income of the current and prior two years after adjusting for certain items not indicative of future performance. Based on this analysis, the Company determined a valuation allowance was no longer necessary for the group's U.S. federal deferred tax assets. Accordingly, the Company decreased its valuation allowance by $16.5 million at December 31, 2012 and recognized a reduction of deferred federal income tax expense. As Group B continues to be in a cumulative loss position as of December 31, 2013 in certain state jurisdictions, the Company has determined that a valuation allowance of $0.9 million is required for deferred tax assets. The Company has not calculated U.S. taxes on unremitted earnings of certain non-U.S. subsidiaries due to the Company’s intent to reinvest the unremitted earnings of the non-U.S. subsidiaries. At December 31, 2013, the Company had approximately $2.8 million in unremitted earnings outside the U.S. which were not included for U.S. tax purposes. U.S. income tax liability would be incurred if these funds were remitted to the U.S. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. The Company has performed an evaluation and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The evaluation was performed for the tax years which remain subject to examination by tax jurisdictions as of December 31, 2013 which are the years ended December 31, 2010 through December 31, 2013 for U.S. federal taxes and the years ended December 31, 2009 through December 31, 2013 for state tax jurisdictions. The Company’s policy is to record penalties and interest related to income tax matters as income tax expense.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 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 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: 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 6: 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 7: 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 8: 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. + Details
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