Note 14 - Income Taxes

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. Income Taxes

Provisions for income taxes were $4.8 million and $13.6 million for the three- and nine-month periods ended September 30, 2016, based on effective tax rates of 35.0% and 35.8%, respectively.

Provisions for income taxes were $4.8 million and $11.4 million for the three- and nine-month periods ended September 30, 2015, based on effective tax rates of 36.4% and 36.7%, respectively. The increase in income taxes for the nine-month period ended September 30, 2016 resulted from higher income before income taxes as compared to the same periods in the prior year. The net decrease in the effective tax rate

for the three- and nine-month periods ended September 30, 2016, as compared to the same periods in 2015,

was primarily due to an increase in the expected tax credit for research and development expenditures.

The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in Italy. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The Company’s filings from 2013 through the present tax year remain subject to examination by the IRS and other taxing authorities for U.S. federal and state tax purposes. The Company currently has tax audits in progress in the United States and Italy which we do not anticipate will have a material impact on its financial statements.  The Company’s filings from 2010 through the present tax year remain subject to examination by the appropriate governmental authorities in Italy.

In connection with the preparation of the financial statements, the Company performed an analysis to ascertain if it was more likely than not that it would be able to utilize, in future periods, the net deferred tax assets associated with its net operating loss carryforward. The Company concluded that the positive evidence outweighs the negative evidence and, thus, those deferred tax assets are realizable on a “more likely than not” basis. As such, the Company did not record a valuation allowance at September 30, 2016 or December 31, 2015.