Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

(10)  INCOME TAXES

We are subject to Federal and certain state income taxes. In addition, we are taxed in certain foreign countries. As of December 31, 2014 and 2013, there were no cumulative undistributed earnings of our foreign subsidiaries for which U.S. income taxes have not been provided.

Earnings before income taxes was as follows:

	Years Ended December 31,
	2014		2013
Domestic	$	4,061	$	3,245
Foreign		848		763
	$	4,909	$	4,008

Income tax expense (benefit) was as follows:

	Years Ended December 31,
	2014			2013
Current
Domestic -- Federal	$	1,073		$	515
Domestic -- state		78			74
Foreign		1			35
	$	1,152			624
Deferred
Domestic -- Federal		401			218
Domestic -- state		256			212
Foreign		(339	)		(123	)
		318			307
Income tax expense	$	1,470		$	931

Deferred income taxes reflect the net tax effect of net operating loss and credit carryforwards as well as temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following is a summary of the significant components of our deferred tax assets and liabilities as of December 31, 2014 and 2013:

	December 31,
Deferred tax assets:	2014			2013
Depreciation of property and equipment	$	596		$	646
Net operating loss ("NOL") (state and foreign)		513			829
Intangibles		224			162
Inventories		184			180
Accrued vacation pay and stock-based compensation		126			169
Tax credit carryforwards (foreign, research and AMT)		92			269
Allowance for doubtful accounts		56			56
Acquisition costs		34			37
Accrued warranty		6			11
Other		21			26
		1,852			2,385
Valuation allowance		(100	)		(287	)
Deferred tax assets		1,752			2,098
Deferred tax liabilities:
Net intangible assets		(232	)		(260	)
Unremitted earnings of foreign subsidiaries		(107	)		(107	)
Deferred tax liabilities		(339	)		(367	)
Net deferred tax asset	$	1,413		$	1,731

The valuation allowance for deferred tax assets as of the beginning of 2014 and 2013 was $287 and $573, respectively. The net change in the valuation allowance for the years ended December 31, 2014 and 2013 were decreases of $187 and $286, respectively. In assessing the ability to realize the deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. In order to fully realize the total deferred tax assets, we will need to generate future taxable income prior to the expiration of net operating loss and credit carryforwards which expire in various years through 2034. 

An analysis of the effective tax rate for the years ended December 31, 2014 and 2013 and a reconciliation from the expected statutory rate of 34% is as follows:

	Years Ended December 31,
	2014			2013
Expected income tax provision at U.S. statutory rate	$	1,669		$	1,363
Increase (decrease) in tax from:
Changes in valuation allowance		(187	)		(286	)
Current year tax credits (foreign and research)		(179	)		(417	)
Foreign income tax rate differences		(63	)		(80	)
Deemed dividend from foreign subsidiaries		208			135
NOL carryforwards utilized		93			200
Domestic tax expense, net of Federal benefit		52			127
Nondeductible expenses		7			10
Other		(130	)		(121	)
Income tax expense	$	1,470		$	931

In accounting for income taxes, we follow the guidance in ASC Topic 740 (Income Taxes) regarding the recognition and measurement of uncertain tax positions in our financial statements. Recognition involves a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. Our policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of December 31, 2014 and 2013, we did not have an accrual for uncertain tax positions.

We file U.S. income tax returns and multiple state and foreign income tax returns. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2011 and thereafter are subject to examination by the relevant taxing authorities.