v2.4.0.8

Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Taxes | NOTE H: INCOME TAXES Pretax earnings (loss) for the years ended December 31, 2013, 2012 and 2011 were taxed in the following jurisdictions:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
|  | (In thousands) |
Domestic |  | $ | 648 |  |  | $ | (807 | ) |  | $ | (500 | )
Foreign |  |  | (1,142 | ) |  |  | (1,788 | ) |  |  | (641 | )
|  | $ | (494 | ) |  | $ | (2,595 | ) |  | $ | (1,141 | )
The provision (benefit) for income taxes in each of 2013, 2012 and 2011 is summarized below:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
|  | (In thousands) |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | 90 |  |  |  | 61 |  |  |  | 67 |
Foreign |  |  | 1 |  |  |  | (409 | ) |  |  | (166 | )
|  |  | 91 |  |  |  | (348 | ) |  |  | (99 | )
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 216 |  |  |  | (171 | ) |  |  | (178 | )
State |  |  | 87 |  |  |  | — |  |  |  | — |
Foreign |  |  | (251 | ) |  |  | (62 | ) |  |  | 22 |
|  |  | 52 |  |  |  | (233 | ) |  |  | (156 | )
|  | $ | 143 |  |  | $ | (581 | ) |  | $ | (255 | )
Deferred tax assets (liabilities) were comprised of the following at December 31:
|  | 2013 |  |  | 2012 |
|  | (In thousands) |
Deferred tax assets |  |  |  |  |  |  |  |
Inventory |  | $ | 1,155 |  |  | $ | 1,187 |
Bad debt provision |  |  | 60 |  |  |  | 49 |
Property, plant and equipment |  |  | 95 |  |  |  | 109 |
Deferred credits |  |  | 1,280 |  |  |  | 1,281 |
Loss carryforwards |  |  | 1,031 |  |  |  | 1,054 |
Rent |  |  | 148 |  |  |  | 162 |
Other |  |  | 812 |  |  |  | 817 |
Gross deferred tax assets |  |  | 4,581 |  |  |  | 4,659 |
Less valuation allowance(2) |  |  | (1,369 | ) |  |  | (1,376 | )
|  |  | 3,212 |  |  |  | 3,283 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (84 | ) |  |  | (61 | )
Unremitted earnings of foreign affiliates |  |  | (53 | ) |  |  | (58 | )
Other |  |  | — |  |  |  | (30 | )
Gross deferred tax liabilities |  |  | (137 | ) |  |  | (149 | )
Net deferred tax assets(1) |  | $ | 3,075 |  |  | $ | 3,134 |
(1) | $1,849,000 of the total deferred tax assets at December 31, 2013 and 2012 were included in current assets and $1,226,000 and $1,285,000 in 2013 and 2012 were included in other long-term assets at December 31, 2013 and 2012, respectively.
(2) | The deferred tax valuation allowance decreased by $7,000 during 2013, $163,000 during 2012 and $15,000 during 2011.
Set forth below is a reconciliation between actual tax expense (benefit) and expected tax expense (benefit) for the respective periods presented below:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
|  | (In thousands) |
Loss before income taxes |  | $ | (494 | ) |  | $ | (2,595 | ) |  | $ | (1,141 | )
Expected income tax expense at 34% |  | $ | (168 | ) |  | $ | (882 | ) |  | $ | (388 | )
Difference in rates on earnings of foreign operations |  |  | 148 |  |  |  | 83 |  |  |  | 80 |
Stock-based compensation and other nondeductible expenses |  |  | 33 |  |  |  | 27 |  |  |  | 43 |
State taxes and credits (net of federal benefit) |  |  | 134 |  |  |  | 50 |  |  |  | 40 |
Change in valuation allowance |  |  | (7 | ) |  |  | — |  |  |  | 7 |
Unremitted earnings of foreign subsidiaries |  |  | (5 | ) |  |  | (19 | ) |  |  | (1 | )
Exclusion of earnings of foreign affiliates |  |  | (22 | ) |  |  | (54 | ) |  |  | (12 | )
Foreign dividend |  |  | — |  |  |  | 192 |  |  |  | — |
Shortfall on vested restricted shares that exceed pool of windfall tax benefits |  |  | 32 |  |  |  |  |  |  |  |  |
Other |  |  | (2 | ) |  |  | 22 |  |  |  | (24 | )
Income tax provision (benefit) |  | $ | 143 |  |  | $ | (581 | ) |  | $ | (255 | )
Deferred income taxes have been provided on the undistributed earnings of certain foreign subsidiaries where it is contemplated that earnings will not be reinvested. At December 31, 2013, the operating loss carryforwards available for federal, state and foreign income tax purposes were $1,324,000, $3,949,000 and $1,960,274, respectively. The earliest year during which any of the carryforwards begin to expire is 2016. At December 31, 2013, foreign tax credit carryforwards available for federal income tax purposes totaled $328,000, which expire in 2015. State targeted tax area credit carryforwards of $1,245,000 are available with no expiration dates. It is our policy to classify interest and penalties as a component of tax expense. At December 31, 2013 we had $273,000 of unrecognized tax benefits, of which $10,000 impacted our effective tax rate. Interest and penalties totaled $131,000, which was accrued on the balance sheet at December 31, 2013. The Company and its domestic subsidiaries file income tax returns in the US federal jurisdiction and in various state jurisdictions. The Company’s foreign subsidiaries file income tax returns in the respective jurisdictions in which they are based. With few exceptions, we are no longer subject to tax examinations by taxing authorities for years before 2007. We do not expect total unrecognized tax benefits to change significantly during the year ended December 31, 2013 due to the expiration of any statutes of limitations. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
Unrecognized Tax Benefits (in thousands): |  | 2013 |  |  | 2012 |
Balance as of January 1, |  | $ | 263 |  |  | $ | 260 |
Additions for tax positions related to the current year |  |  | 10 |  |  |  | 3 |
Reductions for tax positions of prior years |  |  | — |  |  |  | — |
Balance as of December 31, |  | $ | 273 |  |  | $ | 263 |

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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 Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 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=26873400&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 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: 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 6: 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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