Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

10. Income Taxes

        The provision for income tax expense (benefit) consists of the following:

	Year ended December 31
	2011		2010		2009
Current:
Federal	$	2,697	$	—	$	1,284
State		326		231		892
		3,023		231		2,176
Deferred:
Federal		7,855		363		3,165
State		454		278		(1,355	)
		8,309		641		1,810
	$	11,332	$	872	$	3,986

        A reconciliation of income tax expense computed at the federal statutory rate to the provision for income taxes for the years ended December 31, 2011, 2010 and 2009 is as follows:

	2011			2010			2009
Federal income tax expense at statutory rate	$	10,630		$	862		$	4,840
State taxes, net of federal benefit		1,522			7			302
Valuation allowance changes		(47	)		311			(1,129	)
Change in uncertain tax positions, net		(150	)		(349	)		276
Research and development credit		(111	)		(117	)		(194	)
Rate change		(162	)		95			—
Manufacturing tax benefits		(552	)		—			—
Other		202			63			(109	)
	$	11,332		$	872		$	3,986

        Significant components of the Company's deferred tax liabilities and assets are as follows:

	December 31,
	2011			2010
Deferred tax assets:
Allowance for doubtful accounts	$	465		$	456
Inventory reserves		479			533
Warranty liability		1,552			1,291
Deferred compensation		911			666
Pension and retiree health benefit obligations		8,615			6,145
Accrued vacation		570			428
Medical claims reserve		242			214
State net operating losses		2,167			3,160
Federal net operating losses		—			3,310
Other accrued liabilities		1,583			886
Valuation allowance for state net operating losses		(830	)		(877	)
Total deferred tax assets		15,754			16,212
Deferred tax liabilities:
Tax deductible goodwill and other intangibles		(34,923	)		(30,434	)
Accelerated depreciation		(2,280	)		(865	)
Other		(556	)		(421	)
Total deferred tax liabilities		(37,759	)		(31,720	)
Net deferred tax liabilities	$	(22,005	)	$	(15,508	)

        Deferred income tax balances reflect the effects of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.

        During 2011, the Company carried back its previously generated Federal net operating loss, resulting in full utilization of the Federal net operating loss and eliminating the related deferred tax asset. State operating loss carry forwards for tax purposes were $38,297 at December 31, 2011 and are expected to result in future tax benefits of approximately $2,167. These loss carry-forwards will expire beginning in 2019. The Company evaluated the need to maintain a valuation allowance against certain deferred tax assets. Based on this evaluation, which included a review of recent profitability and future projections of profitability, the Company concluded that a valuation allowance of approximately $830 is necessary at December 31, 2011 for the state net operating loss carry-forwards which are likely to expire prior to the Company's ability to use the tax benefit.

        A reconciliation of the beginning and ending liability for uncertain tax positions is as follows:

	2011			2010
Balance at beginning of year	$	798		$	2,095
Increases for tax positions taken in the current year		—			—
Increases for tax positions taken in prior years		—			—
Decreases due to settlements with taxing authorities		(478	)		(1,297	)
Balance at the end of year	$	320		$	798

        The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $208 at December 31, 2011 and approximately $591 at December 31, 2010. The Company recognizes interest and penalties related to the unrecognized tax benefits in income tax expense. Approximately $54 and $174 of accrued interest and penalties is reported as an income tax liability at December 31, 2011 and 2010, respectively. The liability for unrecognized tax benefits is reported in Other Liabilities on the consolidated balance sheets at December 31, 2011 and 2010. The Company recognized ($120), ($478), and $153 of (benefits) expenses related to interest and penalties in income tax expense for the years ended December 31, 2011, 2010, and 2009, respectively.

        The Company files income tax returns in the United States (Federal), Wisconsin (state), Maine (state) and various other states. Tax years open to examination by tax authorities under the statute of limitations include 2009, 2010 and 2011 for Federal and 2007 through 2011 for most states. Tax returns for the 2011 tax year have not yet been filed.