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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Taxes [Abstract] |
Income Taxes |
(22) | Income Taxes
The Company accounts for income taxes under the liability method. Accordingly, deferred income taxes have been provided for temporary differences between the recognition of revenue and expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. The components of income (loss) from continuing operations before taxes are as follows (in thousands):
|  | Year ended December 31, |
|  | 2012 |  |  | 2011 |
Domestic |  | $ | 7,906 |  |  | $ | (2,770 | )
Foreign |  |  | 4,609 |  |  |  | 13,826 |
|  | $ | 12,515 |  |  | $ | 11,056 |
The components of income tax expense (benefit) applicable to continuing operations are as follows (in thousands):
|  | Year ended December 31, |
|  | 2012 |  |  | 2011 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 0 |  |  | $ | 176 |
State |  |  | 141 |  |  |  | 11 |
Foreign |  |  | 1,236 |  |  |  | 1,926 |
Total current income tax expense |  |  | 1,377 |  |  |  | 2,113 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 0 |  |  |  | 0 |
State |  |  | 0 |  |  |  | 0 |
Foreign |  |  | 871 |  |  |  | 508 |
Total deferred income tax expense |  |  | 871 |  |  |  | 508 |
|  | $ | 2,248 |  |  | $ | 2,621 |
The Company files a consolidated federal income tax return which includes all domestic subsidiaries. State income taxes paid in the U.S. during 2012 and 2011 totaled $116,000 and $78,000, respectively. Foreign income taxes paid during 2012 and 2011 totaled $2,054,000 and $1,230,000, respectively. There were no foreign refunds received in 2012 and 2011. There were no federal taxes paid in 2012 and 2011, and there were no federal refunds received in 2012 and 2011. At December 31, 2012, the Company had $107,093,000 of federal net operating loss carryforwards available to offset future federal taxable income, which will expire in various amounts from 2024 to 2032. At December 31, 2012, the Company had $34,374,000 of state net operating loss carryforwards available to offset future state taxable income, the majority of which relates to Florida. These carryforwards expire in various amounts from 2018 to 2032. The following is a reconciliation of income tax expense applicable to continuing operations to that computed by applying the federal statutory rate to loss from continuing operations before income taxes (in thousands):
|  | Year ended December 31, |
|  | 2012 |  |  | 2011 |
Federal tax expense at the statutory rate |  | $ | 1,831 |  |  | $ | 3,665 |
Current year permanent differences |  |  | (18 | ) |  |  | (500 | )
State income taxes, net of federal tax impact |  |  | (406 | ) |  |  | (562 | )
Dividend from foreign subsidiary |  |  | 0 |  |  |  | 2,593 |
Foreign repatriation, net of foreign tax credits |  |  | 4,735 |  |  |  | 0 |
Mexican minimum taxes |  |  | 1,021 |  |  |  | 0 |
Effect of tax rates of foreign subsidiaries |  |  | (440 | ) |  |  | (758 | )
Currency translation effect on temporary differences |  |  | (882 | ) |  |  | 123 |
Valuation allowance |  |  | (4,444 | ) |  |  | (2,172 | )
Prior year adjustment |  |  | 852 |  |  |  | 208 |
Other |  |  | (1 | ) |  |  | 24 |
|  | $ | 2,248 |  |  | $ | 2,621 |
Deferred income tax assets and liabilities are as follows (in thousands):
|  | December 31, |
|  | 2012 |  |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |  |
Compensation and benefit accruals |  | $ | 1,521 |  |  | $ | 2,900 |
Inventory valuation |  |  | 2,817 |  |  |  | 3,318 |
Federal and state net operating loss carryforwards |  |  | 43,550 |  |  |  | 39,198 |
Deferred revenue |  |  | 5,461 |  |  |  | 4,520 |
Accounts receivable allowance |  |  | 121 |  |  |  | 138 |
Defined benefit pension plan |  |  | 3,554 |  |  |  | 3,769 |
Foreign deferred revenue and other provisions |  |  | 5,888 |  |  |  | 7,096 |
AMT credits |  |  | 185 |  |  |  | 185 |
Other |  |  | 135 |  |  |  | 1,457 |
|  |  | 63,232 |  |  |  | 62,581 |
Domestic valuation allowance |  |  | (48,196 | ) |  |  | (51,215 | )
Foreign valuation allowance |  |  | (746 | ) |  |  | (1,492 | )
Total deferred tax assets |  |  | 14,290 |  |  |  | 9,874 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Foreign subsidiaries – unrepatriated earnings |  |  | (4,735 | ) |  |  | 0 |
Depreciation |  |  | (4,413 | ) |  |  | (4,270 | )
Total deferred tax liabilities |  |  | (9,148 | ) |  |  | (4,270 | )
Net deferred tax asset |  | $ | 5,142 |  |  | $ | 5,604 |
ASC 740, Income Taxes, requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The net cumulative domestic loss for the current and prior two years represents negative evidence under the provisions of ASC 740 requiring the Company to establish a valuation allowance against domestic deferred tax assets. Until an appropriate level and characterization of profitability is attained, the Company expects to continue to maintain a valuation allowance on its net deferred tax assets related to future U.S. and certain non-U.S. tax benefits. The gross deferred tax asset for the Company’s Mexican subsidiaries was $5,888,000 and $7,096,000 as of December 31, 2012 and 2011, respectively. Included in this balance is a deferred tax asset associated with the impairment of marketable securities, which was the result of losses recorded for book purposes on the portion of such marketable securities allocated to the Mexican subsidiaries. A full valuation allowance of $746,000 and $1,492,000 was applied to this specific deferred tax asset as of December 31, 2012 and 2011, respectively. Therefore, the net deferred tax asset balances of $5,142,000 and $5,604,000 at December 31, 2012 and 2011, respectively, are attributable to the Mexican subsidiaries. The Company has been profitable in Mexico in the past and anticipates continuing profitability in the future. The ASC Income Tax topic includes guidance for the accounting for uncertainty in income taxes recognized in an enterprise’s financials. Specifically, the guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The total amount of gross unrecognized tax benefits as of December 31, 2012 and 2011 was $200,000. There were no changes to the unrecognized tax benefit balance during the years ended December 31, 2012 and 2011. If the Company’s positions are sustained by the taxing authority in favor of the Company, the entire balance at December 31, 2012 would reduce the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2012 and 2011, the Company does not have an accrual for the payment of tax-related interest and penalties. The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Internal Revenue Service (IRS) is not currently examining the Company’s U.S. income tax returns for 2008 through 2011, for which the statute has yet to expire. In addition, open tax years related to state and foreign jurisdictions remain subject to examination. At October 1, 2012, the Company had $13,053,000 of undistributed earnings from non-U.S. operations on which no provision for U.S. federal and/or state income tax and foreign withholdings had been provided because the Company intended to reinvest such earnings indefinitely outside of the United States. Subsequent to October 1, 2012, the Company changed the classification of those earnings to reflect a change in management’s strategic objectives that could require the repatriation of foreign earnings. As a result of this change, the Company recognized $4,735,000 of additional income tax expense during the year ended December 31, 2012 to record the applicable U.S. deferred income tax liability. As of December 31, 2012, the Company no longer has any undistributed earnings of foreign subsidiaries that are classified as permanently reinvested. The Company expects to repatriate available non-U.S. cash holdings during 2013. The Company will utilize its net operating loss carryforward in the U.S. to offset the taxable income generated in 2013 in the U.S. as a result of the repatriation and has therefore recognized a deferred income tax benefit equal to the amount of the U.S deferred tax liability and a corresponding reduction in the deferred tax asset valuation allowance.

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- 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 Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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