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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES

9. INCOME TAXES

 

Income tax expense consisted of the following:

 

             
   December 31, 
   2023   2022   2021 
   (in thousands) 
Federal Income Tax:               
Current  $5,279   $7,453   $7,197 
Deferred   745    (1,156)   264 
                
State Income Tax:               
Current   821    1,126    1,062 
Deferred   113    (173)   43 
                
Foreign Income Tax:               
Current   (3)   84    298 
Deferred   (130)   (7)   (2)
Income Tax Expense  $6,825   $7,327   $8,862 

 

Pre-tax income included foreign income of $458,000, $437,000, and $1,500,000 in 2023, 2022 and 2021, respectively.

 

 

Total income tax expense differed from statutory income tax expense, computed by applying the U.S. federal income tax rate of 21% to earnings before income tax, as follows:

 

             
   December 31, 
   2023   2022   2021 
   (in thousands) 
Computed Statutory Income Tax Expense  $5,785   $6,505   $7,362 
State Income Tax, Net of Federal Tax Benefit   738    753    902 
Foreign Tax Rate Differential   (37)   (9)   (29)
Valuation Allowance   81    -    - 
Executive Compensation Limitation   258    296    773 
Foreign Derived Intangible Income Deduction   (93)   (98)   (107)
Research Credit   -    (171)   (59)
Other - Net   93    51    20 
Income Tax Expense  $6,825   $7,327   $8,862 

 

A deferred income tax (expense) benefit results from temporary timing differences in the recognition of income and expense for income tax and financial reporting purposes. The components of and changes in the net deferred tax assets (liabilities) which give rise to this deferred income tax (expense) benefit for the years ended December 31, 2023 and 2022 are as follows:

 

         
   December 31, 
   2023   2022 
   (in thousands) 
Deferred Tax Assets:          
Compensation Assets  $191   $201 
Inventory Valuation   656    529 
Accounts Receivable Valuation   200    259 
Deferred Litigation Costs   11    12 
Capitalized Research Costs   485    590 
Accrued Product Liability   217    900 
Foreign Net Operating Losses   312    78 
Valuation Allowance for Loss Carryover   (176)   (78)
Other   24    17 
Compensation Liabilities   196    360 
Total Deferred Assets  $2,116   $2,868 
           
Deferred Tax Liabilities:          
Prepaid Expenses   (612)   (592)
Depreciation and Amortization   (1,315)   (1,359)
Total Deferred Liabilities  $(1,927)  $(1,951)
           
Total Deferred Tax Asset  $189   $917 

 

Management believes it is more likely than not that the Company will have sufficient taxable income when these timing differences reverse and that the deferred tax assets will be realized except for a carryover of foreign operating losses incurred by one of its foreign subsidiaries. Due to the uncertainty of future income in the foreign subsidiary, the Company has recognized a valuation allowance related to the foreign operating losses carrying forward.

 

The Company is currently subject to audit by the Internal Revenue Service for the calendar years ended 2020 through 2022. The Company and its Subsidiaries’ state income tax returns are subject to audit for the calendar years ended 2019 through 2022.

 

As of December 31, 2023, the Company had no liability for unrecognized tax benefits related to various federal and state income tax matters.