XML 29 R14.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Note 7 - Taxes on Income | 12 Months Ended
--- | ---
Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 7 – Taxes on Income: Aggregate income tax provisions consist of the following (in thousands):
|  | 201 7 |  |  | 201 6 |  |  | 201 5 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federa l |  | $ | 2,846 |  |  | $ | 5,642 |  |  | $ | 6,527 |
Tax Cut and Jobs Ac t |  |  | 265 |  |  |  | - |  |  |  | - |
State and loca l |  |  | 647 |  |  |  | 628 |  |  |  | 519 |
Foreig n |  |  | 338 |  |  |  | - |  |  |  | - |
|  |  | 4,096 |  |  |  | 6,270 |  |  |  | 7,046 |
Long Term : |  |  |  |  |  |  |  |  |  |  |  |
Tax Cut and Jobs Ac t |  |  | 1,336 |  |  |  | - |  |  |  | - |
Deferred Taxes : |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax provision (benefit ) |  |  | 1,899 |  |  |  | (1,010 | ) |  |  | (1,216 | )
Tax Cut and Jobs Act re-measuremen t |  |  | 2,429 |  |  |  | - |  |  |  | - |
|  |  | 4,328 |  |  |  | (1,010 | ) |  |  | (1,216 | )
|  | $ | 9,760 |  |  | $ | 5,260 |  |  | $ | 5,830 |
The significant components of the deferred income tax asset (liability) are as follows (in thousands):
|  | 2017 |  |  | 2016 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Pension accruals |  | $ | 2,606 |  |  | $ | 3,581 |
Operating reserves and other accruals |  |  | 2,174 |  |  |  | 3,656 |
Tax carrying value in excess of book basis of goodwill |  |  | 866 |  |  |  | 1,377 |
Tax credits |  |  | 255 |  |  |  | 99 |
Valuation allowance on tax credits |  |  | (255 | ) |  |  |  |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Book carrying value in excess of tax basis of property |  |  | (937 | ) |  |  | (827 | )
Deferred expenses |  |  | (1,809 | ) |  |  | (1,086 | )
Net deferred income tax asset |  | $ | 2,900 |  |  | $ | 6,800 |
The difference between the total statutory Federal income tax rate and the actual effective income tax rate is accounted for as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Statutory Federal income tax rate |  |  | 34.0 | % |  |  | 34.0 | % |  |  | 34.0 | %
State and local income taxes, net of Federal income tax benefit |  |  | 1.5 |  |  |  | 1.9 |  |  |  | 1.6 |
Effect of change in unrecognized tax benefit |  |  | - |  |  |  | - |  |  |  | (0.1 | )
Current year untaxed foreign income |  |  | (6.5 | ) |  |  | (5.1 | ) |  |  | (6.0 | )
Foreign Taxes |  |  | 1.4 |  |  |  | - |  |  |  | - |
Non-deductible share-based employee compensation expense |  |  | 1.1 |  |  |  | 1.2 |  |  |  | 1.3 |
Excess tax benefit from stock compensation |  |  | (7.2 | ) |  |  | (4.4 | ) |  |  | - |
Federal tax credits |  |  | (0.5 | ) |  |  | (0.8 | ) |  |  | - |
Tax Cut and Jobs Act deferred tax re-measurement |  |  | 6.9 |  |  |  | - |  |  |  | - |
Tax on undistributed foreign earnings |  |  | 2.9 |  |  |  | - |  |  |  | - |
Transition tax (repatriation) |  |  | 5.9 |  |  |  | - |  |  |  | - |
Other items |  |  | (0.1 | ) |  |  | (0.4 | ) |  |  | 0.1 |
Effective income tax rate |  |  | 39.4 | % |  |  | 26.4 | % |  |  | 30.9 | %
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“Tax Act”) that instituted fundamental changes to the U.S. tax system. The Tax Act includes changes to the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The Tax Act also permanently reduces the corporate tax rate from 34% to 21%, imposes a one -time mandatory transition tax on the historical earnings of foreign affiliates and implements a territorial style tax system. In 2017, income tax expense of $9.8 million was unfavorably impacted by net discrete adjustments of $4.0 million, due to a charge of $3.3 million related to the enactment of the Tax Cut and Jobs Act (the “Tax Act”) in the United States and $0.7 related to other miscellaneous discrete items. Effective January 1, 2018, the Tax Act establishes a corporate income tax rate of 21%, replacing the current 34% rate, and creates a territorial tax system rather than a worldwide system, which generally eliminates the U.S. federal income tax on dividends from foreign subsidiaries. The transition to the territorial system includes a one -time transition tax on certain of our foreign earnings previously untaxed in the United States. Certain impacts of the new legislation would generally require accounting to be completed in the period of enactment, however, in response to the complexities of the new legislation, the Securities and Exchange Commission (“SEC”) issued guidance to provide companies with relief. Specifically, when the initial accounting for items under the new legislation is incomplete, the guidance allows us to include provisional amounts when reasonable estimates can be made. The SEC has provided up to a one -year measurement period for companies to finalize the accounting for the impacts of this new legislation and we anticipate finalizing our accounting over the coming quarters. While our accounting for the Tax Act is not complete, we have made reasonable estimates for certain provisions and we have recorded a net charge to tax expense of $4.0 million related to its enactment. This net charge includes a deferred tax charge of $1.7 million primarily from revaluing our net U.S. deferred tax assets to reflect the new U.S. corporate tax rate. We believe this calculation is complete except for changes in estimates that can result from finalizing the filing of our 2017 U.S. income tax return, which are not anticipated to be material, and changes that may be a direct impact of other provisional amounts recorded due to the enactment of the Tax Act. In general, the one -time transition tax imposed by the Tax Act results in the taxation of our accumulated foreign earnings and profits (“E&P”) at a 15.5% rate on liquid assets and 8% on the remaining unremitted foreign E&P, both net of foreign tax credits. At this time, we have not yet gathered, prepared and analyzed the necessary information with respect to 2017 in sufficient detail to complete the complex calculations necessary to finalize the amount of our transition tax. We also anticipate that further guidance may become available in this and other areas. We believe that our preliminary calculations result in a reasonable estimate of the transition tax and related foreign tax credit and, as such have included an estimate of $1.5 million in our year-end income tax provision. As the analysis of accumulated E&P and related foreign taxes paid are completed on an entity by entity basis and we finalize the amount held in cash or other specified assets, we will update our provisional estimate of the transition tax and related foreign tax credit. In addition, the Company no longer intends to permanently reinvest its historical foreign earnings and has recorded an additional deferred tax expense of $0.7 million. Only tax positions that m eet the more-likely-than- not recognition threshold are recognized in the consolidated financial statements. As of December 31, 2017 and 2016, respectively, we have $0.5 million of unrecognized tax benefits, all of which, if recognized, would favorably affect the annual effective income tax rate. We do not expect any significant amount of this liability to be paid in the next twelve months. Accordingly, the balance of $0.5 million is included in other long-term liabilities. Changes in the Company ’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows:
(In thousands ) |  |  |  |  |  |  |  |
|  | 201 7 |  |  | 201 6 |
Balance at January 1, |  | $ | 399 |  |  | $ | 399 |
Additions based on tax positions related to the current yea r |  |  | 59 |  |  |  | 55 |
Additions for tax positions of prior year s |  |  | - |  |  |  | 4 |
Reductions due to lapse of statute of limitation s |  |  | (58 | ) |  |  | (59 | )
Balance at December 31 , |  | $ | 400 |  |  | $ | 399 |
W e recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. During each of the years 2017, 2016 and 2015, we recorded $ 0.1 million for interest and penalties, net of tax benefits. During each of the years 2017, 2016 and 2015, we reduced the liability $ 0.1 million for interest and penalties due to lapse of statute of limitations. At December 31, 2017 and 2016, we had $ 0.1 million accrued for interest and penalties, net of tax benefit. We anticipate that it is reasonably possible that the total amount of unrecognized tax benefits cou ld decrease by approximately $0.1 million within the next 12 months due to the closure of tax years by expiration of the statute of limitations and audit settlements related to various state tax filing positions. The earliest year open to federal examinations is 2015 and significant state examinations is 2011.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration