XML 27 R13.htm IDEA: XBRL DOCUMENT
v3.21.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | G. Income Taxes The Company periodically undertakes a review of its valuation allowance and evaluates all positive and negative factors that may affect whether it is more likely than not that the Company would realize its future tax benefits from its deferred tax balances. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. In 2014, the Company introduced a number of changes, most notably the decision to exit the low-margin, high-volume telecommunications market and focus on engineered solutions in the aerospace and defense markets. This turnaround plan was engineered and executed by the Company’s management with the consent of the Board. Over the following years, the negative factors that caused the Company to produce continuing losses in the U.S. tax jurisdiction were eliminated with the result being sustained increases in the Company’s sales, revenues and backlog. Margins from its new and improved products and services have increased, and the Company maintains a strong backlog of orders with its customers. As these changes supported and continue to support the assertion that it is more likely than not that substantially all of the Company’s net deferred tax assets will be utilized, during the third quarter of 2019, $3,344,000 of the Company’s valuation allowance of its deferred tax assets was reversed. Income tax provision (benefit) for the years ended December 31, 2020 and 2019 is as follows:
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State and local |  |  | 31 |  |  |  | 30 |
Foreign |  |  | 50 |  |  |  | 43 |
Total Current |  |  | 81 |  |  |  | 73 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 238 |  |  |  | 1,322 |
State and local |  |  | (6 | ) |  |  | 147 |
Foreign |  |  | 32 |  |  |  | 60 |
Total before change in valuation allowance |  |  | 264 |  |  |  | 1,529 |
Change in valuation allowance |  |  | (9 | ) |  |  | (4,709 | )
Net deferred |  |  | 255 |  |  |  | (3,180 | )
Income tax provision (benefit) |  | $ | 336 |  |  | $ | (3,107 | )
A reconciliation of the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to income before income taxes is detailed below:
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Tax provision at expected statutory rate |  | $ | 274 |  |  | $ | 821 |
State taxes, net of federal benefit |  |  | 31 |  |  |  | 92 |
Permanent differences |  |  | 45 |  |  |  | 34 |
Credits |  |  | 7 |  |  |  | (108 | )
Foreign tax expense, and other |  |  | 1 |  |  |  | 13 |
Change in rate |  |  | (38 | ) |  |  | 63 |
Change in valuation allowance |  |  | (9 | ) |  |  | (4,709 | )
Provision to return |  |  | 15 |  |  |  | — |
Permanent true-ups |  |  | — |  |  |  | 687 |
Other |  |  | 10 |  |  |  | — |
Provision (benefit) for income taxes |  | $ | 336 |  |  | $ | (3,107 | )
Deferred income taxes for 2020 and 2019 were provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. Tax effects of temporary differences and carry-forwards at December 31, 2020 and 2019 were as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
|  | Deferred Tax |  |  | Deferred Tax |
|  | Asset |  |  | Liability |  |  | Asset |  |  | Liability |
|  | (in thousands) |
Inventory reserve |  | $ | 286 |  |  | $ | — |  |  | $ | 239 |  |  | $ | — |
Fixed assets |  |  | — |  |  |  | 58 |  |  |  | — |  |  |  | 100 |
Other reserves and accruals |  |  | 311 |  |  |  | — |  |  |  | 358 |  |  |  | — |
Stock-based compensation |  |  | 8 |  |  |  | — |  |  |  | 6 |  |  |  | — |
Other |  |  | — |  |  |  | 12 |  |  |  | — |  |  |  | 18 |
Tax credit carryforwards |  |  | 1,717 |  |  |  | — |  |  |  | 1,724 |  |  |  | — |
Federal tax loss carryforwards |  |  | 892 |  |  |  | — |  |  |  | 1,169 |  |  |  | — |
State tax loss carryforwards |  |  | 252 |  |  |  | — |  |  |  | 250 |  |  |  | — |
Foreign tax loss carryforwards |  |  | 35 |  |  |  | — |  |  |  | 67 |  |  |  | — |
Total deferred income taxes |  |  | 3,501 |  |  | $ | 70 |  |  |  | 3,813 |  |  | $ | 118 |
Valuation allowance |  |  | (379 | ) |  |  |  |  |  |  | (388 | ) |  |  |  |
Net deferred tax assets |  | $ | 3,052 |  |  |  |  |  |  | $ | 3,307 |  |  |  |  |
Deferred tax assets totaled $3.5 million at December 31, 2020 which includes the tax effect of federal, state and foreign net operating loss carryforwards and our federal tax credits. We recognize federal, state and foreign net operating loss carryforwards and our federal tax credits as deferred tax assets, subject to valuation allowances. At each balance sheet date, we estimate the amount of carryforwards that are not expected to be used prior to expiration of the carryforward period. The Company has a total gross federal NOL carryforward of $4,254,000 as of December 31, 2020. This federal NOL carryforward expires through 2038, if not utilized prior to that date. The Company has total state NOL carryforwards of $5,815,000 as of December 31, 2020. These state NOL balances expire between 2037 and 2047. The Company has research and development tax credit carryforwards of approximately $1,717,000 at December 31, 2020 that can be used to reduce future income tax liabilities and expire principally between 2021 and 2039. The tax effect of the carryforwards that are not expected to be used prior to their expiration is included in the valuation allowance. At December 31, 2020, the balance in the Company’s valuation allowance was $379,000 consisting primarily of research and development tax credits expiring between 2021 and 2025. The Company files income tax returns in the U.S. federal, various state, Hong Kong and India jurisdictions. The statute of limitations for assessment by the Internal Revenue Service ("IRS") and state tax authorities is open for tax returns for years ended December 31, 2017, 2018 and 2019; although carryforward attributes that were generated prior to tax year 2017, including NOL carryforwards and tax credits, may still be adjusted upon examination by the IRS or state tax authorities, if they either have been or will be used in a future period. The Company is generally subject to examinations by foreign tax authorities from 2015 to the present. The Company will recognize any interest and penalties related to unrecognized tax positions in income tax expense. At the date of adoption of ASC 740, the Company did not have a liability for unrecognized tax positions. As of December 31, 2020, management assessed the balances of the Company’s deferred tax assets and liabilities and has determined that it has not taken any aggressive tax positions that may be considered uncertain under ASC 740.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration