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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

9. INCOME TAXES

 

Income tax expense consisted of the following:

 

   2024   2023 
   December 31, 
   2024   2023 
   (in thousands) 
Federal Income Tax:          
Current  $5,024   $5,279 
Deferred   205    745 
           
State Income Tax:          
Current   707    821 
Deferred   28    113 
           
Foreign Income Tax:          
Current   (29)   (3)
Deferred   (228)   (130)
Income Tax Expense  $5,707   $6,825 

 

Pre-tax income included foreign income (loss) of ($2,001,000) and $458,000 in 2024 and 2023, 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:

 

   2024   2023 
   December 31, 
   2024   2023 
   (in thousands) 
Computed Statutory Income Tax Expense  $4,961   $5,785 
State Income Tax, Net of Federal Tax Benefit   581    738 
Foreign Tax Rate Differential   (89)   (37)
Valuation Allowance   277    81 
Executive Compensation Limitation   -    258 
Foreign Derived Intangible Income Deduction   (61)   (93)
Research Credit   -    -  
Other - Net   38    93 
Income Tax Expense  $5,707   $6,825 

 

 

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, 2024 and 2023 are as follows:

 

   2024   2023 
   December 31, 
   2024   2023 
   (in thousands) 
Deferred Tax Assets:   
Compensation Assets  $197   $191 
Inventory Valuation   682    656 
Accounts Receivable Valuation   202    200 
Deferred Litigation Costs   12    11 
Capitalized Research Costs   423    485 
Accrued Product Liability   165    217 
Foreign Net Operating Losses   808    312 
Other   93    24 
Compensation Liabilities   156    196 
Total Deferred Assets, Before Valuation Allowance  $2,738   $2,292 
Less: Valuation Allowance   443    176 
Total Deferred Assets  $2,295   $2,116 
           
Deferred Tax Liabilities:          
Prepaid Expenses   (616)   (612)
Depreciation and Amortization   (1,495)   (1,315)
Total Deferred Liabilities  $(2,111)  $(1,927)
           
Total Deferred Tax Asset  $184   $189 

 

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 2021 through 2023. The Company and its Subsidiaries’ state income tax returns are subject to audit for the calendar years ended 2020 through 2023.

 

As of December 31, 2024, the Company had no liability for unrecognized tax benefits related to various federal and state income tax matters.