Note 14 - Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 14 — INCOME TAXES

The following table sets forth information about the Company’s income tax provision for the periods indicated (dollar amounts in thousands):

	Three Months ended  September 30,						Nine Months ended September 30,
	2014			2013			2014			2013
Income (loss) from continuing operations before income taxes	$	(18,539	)	$	19,982		$	11,465		$	56,221
Income tax (benefit) provision		(6,889	)		7,777			4,278			20,537
Net income (loss) from continuing operations	$	(11,650	)	$	12,205		$	7,187		$	35,684
Income tax provision/benefit as a percentage of income/loss before income taxes		37.2	%		38.9	%		37.3	%		36.5	%

For the three month period ended September 30, 2014, the Company recorded an income tax benefit of $6.9 million and in the nine month period ended September 30, 2014, the Company recorded an income tax provision of $4.3 million, which equals 37.2% and 37.3% of income/loss before income tax in the applicable periods. The Company anticipates that its effective tax rate for the year 2014 will be approximately 40.3%. The expected effective tax rate for the year is greater than that for the 9 months ended September 30, 2014 due to a discrete item that was taken into account in the third quarter.

During the three and nine month periods ended September 30, 2013, the Company recorded income tax provisions that equaled 38.9% and 36.5% of income before income tax in the applicable period.  The income tax provision rates in the current year were increased in comparison to the prior year due to the incurrence of certain nondeductible fees related to the acquisition of Hi-Tech and VersaPharm in the three and nine month periods ended September 30, 2014.  Additionally the prior year rate also reflects a discrete adjustment related to recognition of the Company’s 2012 R&D tax credits, which were not recognized in 2012 because the law renewing the credits for 2012 was not passed until early 2013. The R&D tax credit has not been renewed for 2014, and no benefit for such credits has been recognized in the current year’s tax expense.

In accordance with ASC 740-10-25, Income Taxes – Recognition, the Company reviews its tax positions to determine whether it is “more likely than not” that its tax positions will be sustained upon examination, and if any tax positions are deemed to fall short of that standard, the Company establishes reserves based on the financial exposure and the likelihood that its tax positions would not be sustained.  Based on its evaluations, the Company determined that it would not recognize tax benefits on $1.1 million and $0.8 million related to uncertain tax positions as of September 30, 2014 and December 31, 2013, respectively.  If recognized, the entire amount of these tax positions will impact the Company’s effective rate.