14.	INCOME TAXES

The provision for income taxes (credit) for the years ended December 31, 2012, 2011 and 2010 consists of the following:

(thousands)	2012			2011			2010
Current:
Federal	$	211		$	(235	)	$	(148	)
State		134			54			50
Total current		345			(181	)		(98	)
Deferred:
Federal		(6,320	)		18			17
State		(848	)		-			-
Total deferred		(7,168	)		18			17
Income tax credit	$	(6,823	)	$	(163	)	$	(81	)

The provision for the income tax credits for the years ended December 31, 2012, 2011 and 2010 are different from the amounts that would otherwise be computed by applying a graduated federal statutory rate (34% in each of the years presented) to income before income taxes.

A reconciliation of the differences between the actual provision (credit) for income taxes and the tax provisions for income taxes at the federal statutory income tax rate for each of the years ended December 31, 2012, 2011 and 2010 is as follows:

(thousands)	2012			2011			2010
Tax provision, at federal statutory income tax rate	$	7,232		$	2,824		$	389
State taxes, net of federal benefit		1,101			54			50
Deferred tax valuation allowance		(15,570	)		(3,048	)		(311	)
Other		414			7			(209	)
Income tax credit	$	(6,823	)	$	(163	)	$	(81	)

Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in deductible or taxable amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is the tax payable or refundable for the current period plus or minus the change in deferred tax assets and liabilities during the period.

The Company evaluates current conditions in the recreational vehicle, manufactured housing, and residential housing markets, and overall credit markets, as well as consumer confidence and the general economy in the U.S. to determine sustainability of the Company's levels of profitability in the future. In the absence of specific favorable factors, the Company evaluates recording a valuation allowance for deferred tax assets in a tax jurisdiction when it has cumulative financial accounting losses over several consecutive years.

As of January 1, 2011, the Company had a deferred tax valuation allowance (the "Valuation Allowance") for deferred tax assets net of deferred tax liabilities (collectively, "Net Deferred Tax Assets") not expected to be utilized of $19.1 million. In 2011 as a result of the generation of taxable income, the Valuation Allowance was reduced by $3.5 million to $15.6 million at December 31, 2011. In the second quarter of 2012, the Company determined that it was likely that its Net Deferred Tax Assets would be realized based upon sustained profitability and forecasted future operating results, and as a result reversed approximately $6.6 million of the Valuation Allowance, exclusive of the reversal expected to result from the Company's estimated full year tax provision (the "2012 Tax Provision"), with the reversal recorded as a non-cash income tax credit. The Company then reversed an additional $0.2 million of the Valuation Allowance, exclusive of the 2012 Tax Provision, in the fourth quarter of 2012. Excluding the combined $6.8 million reversal of the Valuation Allowance discussed above, the Company's 2012 Tax Provision based on its taxable income position approximated $8.8 million, which was fully offset by the reversal of the remaining Valuation Allowance.

The Valuation Allowance did not impact the Company's ability to utilize its federal and state net operating loss carryforwards (the "NOLs") to offset taxable earnings for federal and state tax purposes. At December 31, 2012, the Company had gross federal NOLs of approximately $9.8 million that will begin to expire in 2028 and gross state NOLs of approximately $12.6 million that will expire in varying amounts between 2013 and 2029. Both federal and state net NOLs include approximately $3.7 million of taxable deductions related to unrealized excess benefits on stock-based compensation that have not been recorded as deferred tax assets. The tax benefits related to these excess benefits will be recorded to shareholders' equity when realized.

As a result of the NOLs exceeding the Company's taxable income, there were no federal or state income taxes paid in each of the three years ended December 31, 2012, 2011 and 2010.

The composition of the deferred tax assets and liabilities is as follows:

(thousands)	As of December 31	2012			2011
Gross deferred tax assets:
Trade receivables allowance		$	107		$	302
Inventory capitalization			291			152
Accrued expenses			2,081			1,479
Deferred compensation			964			993
Non-compete agreements			6			23
Inventory reserves			428			259
AMT and other tax credit carry-forwards			896			456
Federal and State NOL carry-forwards			2,390			7,987
Share-based compensation			287			299
Depreciation expense			-			937
Pension liability			30			103
Intangibles			1,212			2,663
Valuation allowance			-			(15,570	)
Gross deferred tax assets			8,692			83
Gross deferred tax liabilities:
Indefinite-lived intangible assets			-			(1,344	)
Prepaid expenses			(141	)		(76	)
Share-based compensation			-			(7	)
Depreciation expense			(2,726	)		-
Gross deferred tax liabilities			(2,867	)		(1,427	)
Net deferred tax assets (liabilities)		$	5,825		$	(1,344	)

The deferred tax amounts above have been reflected on the consolidated statements of financial position as of December 31, 2012 and 2011 as follows:

(thousands)	2012		2011
Current and long-term deferred tax assets	$	5,825	$	-
Long-term deferred tax liabilities		-		(1,344	)
Deferred tax assets (liabilities), net	$	5,825	$	(1,344	)

At December 31, 2012, the Company has federal Alternative Minimum Tax ("AMT") credit carryforwards of $0.7 million and state manufacturing credit carryforwards of $0.1 million, which are available to be directly offset against future federal and state income tax liabilities. The state manufacturing carryforwards expire in 2013. The AMT credits do not expire.

The Company is subject to periodic audits by domestic tax authorities. For the majority of tax jurisdictions, the U.S. federal statute of limitations remains open for the years 2009 and later.

The Company has not reflected any unrecognized tax benefits in its financial statements as of December 31, 2012 or December 31, 2011 and does not expect any significant changes relating to unrecognized tax benefits in the twelve months following December 31, 2012.