(3) Income Taxes

The components of income tax (benefit) expense are:


	2015			2014			2013
Current:
Federal	$	573		$	(4,256	)	$	12,285
State		417			251			3,007
Foreign		991			934			1,101
Deferred:
Federal		(319	)		3,492			2,213
State		347			(872	)		310

	$	2,009		$	(451	)	$	18,916

Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 35.0% to income before income tax expense as a result of the following:


	2015			2014			2013
Computed tax expense at statutory federal rates	$	3,010		$	1,536		$	18,678
Increase (decrease) in taxes resulting from:
State taxes, net of federal income tax benefit		454			(11	)		1,983
Domestic production deduction		(179	)		420			(1,142	)
Income tax credits		(662	)		(728	)		(724	)
Foreign tax rate differential		(1,590	)		(2,159	)		(1,459	)
Subpart F income		9			338			—
Equity Investment		223			10			345
Stock Based Compensation		244			219			461
State Tax Rate Change		185			(257	)		83
Unrecognized tax benefits		168			32			419
Foreign Tax Gross Up		83			10			24
Meals and Entertainment		73			76			103
Other expenses		(9	)		63			145

	$	2,009		$	(451	)	$	18,916

Income before provision for income taxes and losses on equity investment are:


	2015		2014			2013
Domestic	$	1,589	$	(5,196	)	$	46,520
Foreign		7,373		8,840			7,314

	$	8,962	$	3,644		$	53,834

Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability at December 31, 2015 and 2014 relate to the following:


	2015			2014
Current:
Inventories	$	5,949		$	5,558
State income taxes		(215	)		(633	)
Vacation pay accrual		796			776
Accrued bonuses		543			95
Bad debt		45			45
Prepaid expenses		(1,157	)		(1,314	)
Stock compensation		1,781			2,446
Other		359			1,758

Net deferred tax asset	$	8,101		$	8,731

Non-Current:
Plant and equipment, principally due to differences in depreciation and capitalized interest	$	(30,038	)	$	(28,365	)
NOL Carryforward		658			361
Tax credit		524			319
Other		1,300			(474	)

Net deferred tax liability		(27,556	)		(28,159	)

Total net deferred tax liability	$	(19,455	)	$	(19,428	)

The following is a roll-forward of the Company’s total gross unrecognized tax liabilities, not including interest and penalties, for the fiscal years ended December 31, 2015 and 2014:


	2015			2014
Balance at beginning of year	$	1,958		$	1,692
Additions for tax positions related to the current year		85			140
Additions for tax positions related to the prior year		86			499
Deletion for tax positions related to the prior year		(122	)		(373	)

Balance at end of year	$	2,007		$	1,958

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s consolidated financial statements. For the year ended December 31, 2015 and 2014, the Company had recognized approximately $335 and $215, respectively in interest and penalties related to unrecognized tax benefits accrued.

It is expected that the amount of unrecognized tax benefits will change within the next 12 months; however we do not expect the change to have a significant impact on our consolidated financial statements. At this time, an estimate of the range of the reasonable possible outcomes cannot be made.

The Company believes it is more likely than not that the deferred tax assets detailed in the table above will be realized in the normal course of business. It is the intent of the Company that undistributed earnings of foreign subsidiaries are permanently reinvested and, accordingly, no deferred liability for federal and state income taxes has been recorded. The amount of undistributed earnings was $29,774 and $22,944 as of December 31, 2015 and December 31, 2014, respectively. Upon distribution of earnings in the form of dividends or otherwise, the Company would be subject to both federal and state income taxes (less any applicable foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the unrecognized deferred income tax liability is not practical due to the complexities of a hypothetical calculation.

The Company is subject to U.S. federal income tax as well as to income tax in multiple state jurisdictions. Federal income tax returns of the Company are subject to Internal Revenue Service (“IRS”) examination for the 2012 through 2014 tax years. State income tax returns are subject to examination for the 2011 through 2014 tax years.

The Company has been notified by the IRS of its intent to examine the Company’s federal income tax returns for the years ended December 31, 2012 through December 31, 2014. Currently the results of the audit are not determinable since the audit is still in its initial phase.