Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
Income Taxes

NOTE E – INCOME TAXES

Income tax expense (benefit) included in income from net earnings consists of the following:

  Year ended
  2009 2010 2011
Current                  
Federal $ 15,116   $ 18,026   $ 22,383  
State   1,091     1,502     1,913  
Foreign   1,800     2,956     4,442  
    18,007     22,484     28,738  
Deferred                  
Federal   (326 )   1,243     1,044  
State   (18 )   113     (71 )
Foreign   (241 )   (627 )   (2,985 )
  $ 17,422   $ 23,213   $ 26,726  

 

The income tax provision, as reconciled to the tax computed at the federal statutory rate of 35% for 2009, 2010, and 2011, is as follows:

  Year ended
  2009 2010 2011
Federal income taxes at statutory rate $ 17,842   $ 24,102   $ 27,117  
State income taxes, net of federal tax benefit   1,032     1,192     1,373  
Qualified production activities deduction   (979 )   (1,320 )   (1,576 )
Research tax credit   (438 )   (285 )   (161 )
Equity-based compensation - incentive stock options   64     (145 )   38  
All other, net   (99 )   (331 )   (65 )
  $ 17,422   $ 23,213   $ 26,726  

 

The significant categories of deferred taxes are as follows:

  January 1,
2011 		December 31,
2011
 
Deferred tax assets            
Inventory differences $ 2,287   $ 2,695  
Accruals not currently deductible   1,933     2,124  
Equity-based compensation   5,740     7,558  
Intangible assets   9,318     9,535  
Net operating losses   2,626     2,654  
Other   2,707     1,361  
Gross deferred tax assets   24,611     25,927  
Valuation allowance   (1,595 )   (1,784 )
Net deferred tax assets   23,016     24,143  
 
Deferred tax liabilities            
Depreciation/amortization   (1,611 )   (3,506 )
Accumulated other comprehensive income   (2,038 )   (3,378 )
Prepaid expenses   (2,204 )   (1,967 )
Intangible assets   (10,478 )   (10,659 )
Other   (2,384 )   (1,202 )
Gross deferred tax liabilities   (18,715 )   (20,712 )
Net deferred taxes $ 4,301   $ 3,431  

 

     At December 31, 2011, the Company had foreign operating loss carry forwards of approximately $10,616. If these operating losses are not used, they will expire between 2012 and 2015. A valuation allowance of approximately $7,136 has been placed on these foreign operating loss carry forwards. The valuation allowance is determined using a more likely than not realization criteria and is based upon all available positive and negative evidence, including future reversals of temporary differences. A future increase or decrease in the current valuation allowance is not expected to impact the income tax provision due to the Company's ability to fully utilize foreign tax credits associated with taxable income in these jurisdictions.

The Components of deferred taxes, net on a jurisdiction basis are as follows:

  January 1,
2011 		December 31,
2011
 
 
Net current deferred tax assets $ 3,116 $ 3,320
Net noncurrent deferred tax assets   12,383   11,033
Total net deferred tax assets   15,499   14,353
 
Net current deferred tax liabilities   1,405   974
Net noncurrent deferred tax assets   9,793   9,948
Total net deferred tax liabilities   11,198   10,922
Net deferred taxes $ 4,301 $ 3,431

 

 

     The Company files income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, local, or non-U.S. income tax examinations by tax authorities for years before 2007. A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other long-term liabilities is as follows:

  2009 2010 2011
Beginning balance $ 425   $ 545   $ 250  
Additions based on tax positions related to the current year   111     -     -  
Additions for tax positions of prior years   144     9     7  
Settlements   -     -     -  
Lapse of statute   (135 )   (304 )   (59 )
Ending balance $ 545   $ 250   $ 198  

 

     The Company anticipates that it is reasonably possible that unrecognized tax benefits, including interest and penalties, of up to $78 could be recognized within the next twelve months due to the lapse of the applicable statute of limitations. Recognition of these uncertain tax positions or any uncertain tax position that is included in the December 31, 2011 balance would result in an adjustment to the Company's effective tax rate.

     The Company records interest and penalties accrued related to unrecognized tax benefits in income taxes. In 2011, the Company recognized $7 in interest and penalties, compared to $9 in 2010 and $3 in 2009. The Company has accrued $51 and $48 for the payment of interest and penalties at the end of 2010 and 2011, respectively.