Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2011

Income Tax Disclosure [Text Block]

8.           INCOME TAXES

The components of deferred income taxes are as follows (in thousands):

	September 30, 2011		December 31,  2010
Deferred tax assets:
Net operating loss carryforwards	$	16,920	$	17,027
Temporary differences		4,461		4,074
		21,381		21,101
Deferred tax valuation allowance		3,464		889
	$	17,917	$	20,212

In accordance with accounting standards, the Company has not recorded a deferred tax asset related to the settlement of share-based awards in the accompanying consolidated financial statements because it will not result in the reduction of income taxes payable, due to the existence of net operating loss carryforwards. The cumulative amount of unrecognized tax benefits associated with these awards was approximately $0.67 million at September 30, 2011, and if the Company is able to utilize this benefit in the future it would result in a credit to additional paid in capital.

The components of the provision for income tax (expense) benefit for the periods ended September 30, are as follows (in thousands):

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2011			2010			2011			2010
Current:
State and foreign	$	(9	)	$	(1	)	$	(26	)	$	(21	)
Deferred:
State		6			14			19			10
Federal		123			251			409			165
		129			265			428			175
Valuation allowance		(2,724	)		(136	)		(2,724	)		(136	)
Income tax (expense) benefit	$	(2,604	)	$	128		$	(2,322	)	$	18

At September 30, 2011, we had U.S. federal net operating loss carryforwards ("NOLs") of approximately $49 million expiring between the years 2012 through 2030. Based on management's current estimate of book income and the uncertainty of the timing of future taxable income, it was determined that it is more likely than not that the Company will not be able to generate enough taxable income in the respective carry forward periods to realize all of its NOLs. Consequently, in the third quarter of 2011, we recorded a $2.7 million valuation allowance related to the portion of NOLs that may not be realized.

We file U.S. federal income tax returns as well as income tax returns in various states and one foreign jurisdiction. We may be subject to examination by the Internal Revenue Service ("IRS") for calendar years 2007 through 2010 under the normal statute of limitations. Additionally, any net operating losses that were generated in prior years and utilized in these years may also be subject to examination by the IRS. Generally, for state tax purposes, the Company's 2006 through 2010 tax years remain open for examination by the tax authorities under a four year statute of limitations, however, certain states may have a statute of limitations of six to ten years.