Note 12 - Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

(12)            Income Taxes

The components of the benefit for income taxes for the years ended December 31, 2011, 2012 and 2013 were as follows (in thousands):

	December 31,
	2011			2012			2013
Current:
Federal	$	422		$	6,719		$	5,145
State		352			2,547			1,340
Foreign		1,508			3,949			6,180
		2,282			13,215			12,665
Deferred:
Federal		(5,189	)		(13,285	)		(10,026	)
State		(916	)		(2,857	)		(2,156	)
Foreign		(259	)		(5,059	)		(5,839	)
Total		(6,364	)		(21,201	)		(18,021	)
Benefit for income taxes	$	(4,082	)	$	(7,987	)	$	(5,356	)

Deferred taxes result from temporary differences between the bases of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The sources of the temporary differences and their effect on deferred tax assets and liabilities as of December 31, 2012 and 2013 were as follows (in thousands):

	December 31,
	2012						2013
	Current			Noncurrent			Current			Noncurrent
Deferred tax assets:
Allowance for doubtful accounts	$	2,415		$	—		$	2,784		$	—
Loss on interest rate swap		40			—			—			—
Basis difference of intangible assets		—			—			—			6,220
Net operating loss carryforwards		—			144			—			489
Shared-based compensation		—			8,112			—			10,930
Foreign currency translation		—			60			—			4,221
Other deferred tax assets		440			1,303			476			991
Total deferred tax assets		2,895			9,619			3,260			22,851
Deferred tax liabilities:
Basis difference of intangible assets		—			(1,606	)		—			—
Basis difference of property and equipment		—			(1,364	)		—			(1,194	)
Cash to accrual adjustments		(2,363	)		(2,467	)		(2,426	)		(166	)
Other deferred tax liabilities		(516	)		(9	)		(401	)		—
Total deferred tax liabilities		(2,879	)		(5,446	)		(2,827	)		(1,360	)
Net deferred tax assets	$	16		$	4,173		$	433		$	21,491

The reconciliation of income tax computed at the U.S. federal statutory rate to income tax benefit for the years ended December 31, 2011, 2012 and 2013 were as follows (in thousands):

	December 31,
	2011			2012			2013
Expected tax benefit	$	(4,221	)	$	(8,024	)	$	(5,450	)
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal benefit		(274	)		(770	)		(694	)
Non-deductible items		668			274			240
Tax rate international		(533	)		551			433
Other		278			(18	)		115
Income tax benefit	$	(4,082	)	$	(7,987	)	$	(5,356	)

In 2011, in conjunction with the MES acquisition, the Company acquired $23.3 million of NOLs. These NOLs were subject to annual limitations resulting from the change in control provisions in section 382 of the Internal Revenue Code (“IRC Section 382”). The Company generated $18.7 million of U.S. federal taxable income in the year ended December 31, 2011 and utilized $18.7 million of the NOLs in 2011 to offset against this U.S. federal taxable income.

For the year ended December 31, 2012, the Company generated $30.8 million of U.S. federal taxable income and utilized $12.9 million in NOLs from the 2011 year.  For the year ended December 31, 2012 the Company utilized AMT credits of $171,000 to offset its U.S. federal tax liabilities. During the year ended December 31, 2012, the Company generated an additional $3.1 million in foreign tax credits related to income taxes payable at certain of its businesses located in the U.K. and Australia and utilized $2.7 million in foreign tax credits to offset its current tax liability.  Additionally, in 2012 the Company utilized $7.9 million of option related tax benefits, and reduced its income taxes payable by $2.9 million, for excess tax benefits, of which was recorded to additional paid in capital. 

For the year ended December 31, 2013, the Company generated an estimated $29.4 million of U.S. federal taxable income and utilized $1.4 million in acquired NOLs from the 2012 year.  Additionally, during the year ended December 31, 2013, the Company generated an additional estimated $3.2 million in foreign tax credits related to income taxes payable at certain of its businesses located in the U.K. and Australia and utilized $3.7 million in foreign tax credits to offset its current tax liability.  Additionally, in 2013 the Company utilized $19.2 million of option related tax benefits, reducing its income taxes payable by $6.6 million, for excess tax benefits, which was recorded to additional paid in capital. The Company completed an analysis of projected future taxable income and determined that all deferred tax assets, including net operating loss carryforwards and tax credit carryforwards are more likely than not to be realized in the foreseeable future. As of December 31, 2013, the Company had $4.7 million in state NOLs, which expire between 2028 and 2033, and $927,000 in foreign NOLs, which expire between 2029 and 2031, to offset future taxable income. The Company completed an analysis of projected future taxable income and determined that all deferred tax assets, including net operating loss carryforwards and tax credit carryforwards are more likely than not to be realized in the foreseeable future.

The Company applies the provisions of ASC 740 as it relates to uncertain tax positions. This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 states that a tax benefit from an uncertain tax position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority having full knowledge of all relevant information. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

The following table summarizes the activity related to the unrecognized tax benefits for the years ended December 31, 2012 and 2013 (in thousands):

Balance at January 1, 2012	$	308
Increase to prior year tax positions		19
Increase to current year tax positions		—
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at December 31, 2012		327
Increase to prior year tax positions		28
Increase to current year tax positions		—
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at December 31, 2013	$	355

The Company is no longer subject to U.S. federal income or state tax return examinations by tax authorities for tax years before 2009 and 2008. The Company operates in multiple taxing jurisdictions and faces audits from various tax authorities. The Company remains subject to examination until the statute of limitations expires for the respective tax jurisdiction. The Company does not anticipate that the amount of the unrecognized benefit will significantly increase or decrease within the next 12 months.

Undistributed earnings of the Company’s foreign subsidiaries are considered indefinitely reinvested and, accordingly, no provision for U.S. federal income taxes has been recorded. Deferred taxes are provided for earnings outside the United States when those earnings are not considered indefinitely reinvested.