Provision for Taxes

12 Months Ended

Dec. 29, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 12 — Provision for Taxes

Income before taxes and the provision for taxes consisted of the following:

In Thousands	2012			2011			2010
Income (loss) before taxes:
United States of America (USA)	$	11,104		$	8,481		$	10,919
Non USA		(11,642	)		(1,605	)		(1,843	)
	$	(538	)	$	6,875		$	9,076
Provision for taxes:
Current
Federal	$	3,671		$	965		$	118
State		303			38			180
International		83			568			(194	)
		4,057			1,571			104
Deferred
Federal		397			163			2,802
State		15			621			59
International		(77	)		79			52
		335			863			2,913
	$	4,392		$	2,434		$	3,017

The Company has not provided for USA deferred taxes or foreign withholding taxes on undistributed earnings for non-USA subsidiaries where the Company intends to reinvest these earnings indefinitely in operations outside the USA.

The provision for income taxes was computed based on financial statement income. A reconciliation of the provision for income taxes to the amount computed using the statutory rate follows:

In Thousands	2012			2011			2010
Income tax at statutory rate	$	(188	)	$	2,338		$	3,086
Increase (decrease) in income tax resulting from
State tax expense, net of federal effect		509			394			375
Federal true-ups		(113	)		113			112
Federal tax credits		(247	)		(159	)		—
Effect of foreign tax rates		(94	)		(370	)		(195	)
Tax audit settlement		—			—			(135	)
Valuation allowances (state and foreign)		39			448			(77	)
Goodwill impairment (worldwide)		4,684			—			—
Captive insurance earnings		(379	)		(301	)		(334	)
Incentive stock options		152			115			59
Uncertain tax positions		—			(174	)		82
Other		29			30			44
Recorded provision for income taxes	$	4,392		$	2,434		$	3,017

The provision for income taxes was computed based on financial statement income. In accordance with FASB ASC 740, the Company has recorded the following changes in uncertain tax positions:

In Thousands	2012			2011
Balance, beginning of year	$	46		$	220
Additions for current year tax positions		—			—
Additions for prior year tax positions		—			—
Settlements		—			—
Reductions settlements		—			—
Reductions for prior year tax positions		(46	)		(174	)
Balance, end of year	$	—		$	46

Interest costs and penalties related to income taxes are classified as interest expense and selling, general and administrative costs, respectively in the Company’s financial statements. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and multiple state and foreign jurisdictions. The Company is subject to future examinations by federal, state and other tax authorities for all years after 2008.

The components of the net deferred tax liabilities are as follows:

In Thousands	2012			2011
Assets
Employee benefits	$	59		$	55
Valuation reserves		1,728			1,584
Property and equipment		233			356
Stock based compensation		178			132
Federal and state credits		865			1,046
Net operating loss carry forward		7,606			7,132
Total assets		10,669			10,305
Liabilities
Unrealized equity investment income		(2,555	)		(2,027	)
Goodwill and intangible assets		(2,668	)		(2,535	)
Prepaid insurance		(103	)		(90	)
Total liabilities		(5,326	)		(4,652	)
Valuation Allowance
Beginning balance		(7,075	)		(6,626	)
Increase during period		(189	)		(449	)
Ending balance		(7,264	)		(7,075	)
	$	(1,921	)	$	(1,422	)

Deferred tax assets (liabilities) are included in the consolidated balance sheets as follows:

In Thousands	2012			2011
Deferred income tax asset - current	$	1,553		$	1,478
Deferred income tax asset (liability) – long-term		(3,474	)		(2,900	)
	$	(1,921	)	$	(1,422	)

The Company has state unused net operating losses of approximately $2.2 million. All operating loss carry-forwards expire in various amounts through 2029. In addition, the Company has foreign unused net operating loss carry-forwards of approximately $24.4 million of which an estimated $22.9 million has been reserved as the Company does not expect to be able to utilize these carryforwards.