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Note 15 - Income Taxes

12 Months Ended

Dec. 31, 2013

15. Income Taxes:

The components of the Company’s provision (benefit) for income taxes from continuing operations were as follows:

	As of December 31,
(in thousands)	2013			2012			2011
Current:
Federal	$	6,207		$	8,058		$	4,375
State and local		1,265			1,021			115
		7,472			9,079			4,490
Deferred		(2,195	)		(1,217	)		8,025
Income tax provision	$	5,277		$	7,862		$	12,515

The components of the Company’s deferred income taxes at December 31 are as follows:

(in thousands)	2013			2012
Deferred tax assets:
Inventory (excluding LIFO reserve)	$	2,588		$	2,039
Net operating loss and tax credit carryforwards		3,044			3,167
Allowance for doubtful accounts		585			615
Accrued expenses		7,459			7,592
Other		83			102
		13,759			13,515
Valuation reserve		(1,298	)		(1,200	)
Total deferred tax assets		12,461			12,315

Deferred tax liabilities:
LIFO reserve		(6,213	)		(5,417	)
Property and equipment		(24,339	)		(26,962	)
Intangibles		(15,259	)		(15,416	)
Other		(24	)		-
Total deferred tax liabilities		(45,835	)		(47,795	)
Deferred tax liabilities, net	$	(33,374	)	$	(35,480	)

The deferred tax liability decreased by $88 thousand related to the interest rate swap.

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:

(in thousands)	2013			2012			2011
Balance as of January 1	$	112		$	75		$	2,005
Decreases related to prior year tax positions		(37	)		-			-
Increases related to current year tax positions		25			61			24
Decreases related to lapsing of statute of limitations		(25	)		(24	)		(1,954	)
Balance as of December 31	$	75		$	112		$	75

It is expected that the amount of unrecognized tax benefits will not materially change in the next twelve months. The tax years 2010 through 2012 remain open to examination by major taxing jurisdictions to which the Company is subject.

The Company recognized interest related to uncertain tax positions in income tax expense. As of December 31, 2013 and December 31, 2012, the Company had approximately $4 thousand and $5 thousand of gross accrued interest related to uncertain tax positions, respectively.

The following table reconciles the U.S. federal statutory rate to the Company’s effective tax rate:


	2013			2012			2011
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State and local taxes, net of federal benefit		3.0	%		6.9	%		4.1	%
Goodwill impairment		-			22.7	%		-
Valuation allowance		-			8.5	%		-
Sec. 199 manufacturing deduction		(4.2	%)		(4.7	%)		(1.0	%)
Meals and entertainment		3.3	%		4.5	%		1.2	%
Change in unrecognized tax benefits		(0.2	%)		-			(5.8	%)
All other, net		3.9	%		4.6	%		(0.1	%)
Effective income tax rate		40.8	%		77.5	%		33.4	%

Income taxes paid in 2013, 2012 and 2011 totaled $7.6 million, $6.9 million and $9.2 million, respectively. Some subsidiaries of the Company’s consolidated group file state tax returns on a separate company basis and have state net operating loss carryforwards expiring over the next seven to 20 years. A valuation allowance is recorded to reduce certain deferred tax assets to the amount that is more likely than not to be realized.

- 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.

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