15. Income Taxes:

Components of income (loss) before income taxes were as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2014		2013			2012
United States	$	48,988	$	103,349		$	50,819
Foreign		4,555		(2,256	)		1,043
	$	53,543	$	101,093		$	51,862

The provision (benefit) for income taxes consisted of the following (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2014		2013			2012
Current:
Federal	$	15,352	$	31,954		$	15,543
Foreign		393		(19	)		24
State		69		124			369
		15,814		32,059			15,936
Deferred:
Federal		41		43			413
Foreign		777		(566	)		395
		818		(523	)		808
	$	16,632	$	31,536		$	16,744

Actual income tax expense (benefit) differs from income tax expense computed by applying the statutory federal tax rate of 35.0% for each of the fiscal years ended September 30, 2014, 2013 and 2012 as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2014			2013			2012
Provision for U.S. federal income tax at statutory rate	$	18,740		$	35,382		$	18,153
Effect of foreign income taxes		(629	)		130			(140	)
Manufacturers’/producers’ deduction		(1,496	)		(3,048	)		(1,868	)
Research and experimentation tax credits		(208	)		(661	)		(99	)
State income taxes, net of federal income tax benefit		45			81			240
Nondeductible expenses		205			253			165
Resolution of prior years’ tax matters		20			(467	)		544
Contingency for uncertainty in income taxes		—			(51	)		(335	)
Other items		(45	)		(83	)		84
	$	16,632		$	31,536		$	16,744
Effective tax rate		31.1	%		31.2	%		32.3	%

Deferred income taxes under the liability method reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income tax asset were as follows (in thousands):

	AS OF SEPTEMBER 30, 2014									AS OF SEPTEMBER 30, 2013
	U. S.			Non U.S.			Total			U. S.			Non U.S.			Total
Deferred income tax assets:
Allowance for doubtful accounts	$	214		$	73		$	287		$	120		$	4		$	124
Inventories		5,035			(125	)		4,910			4,762			(71	)		4,691
Net operating loss carry-forwards, tax credits and deferrals		—			871			871			—			1,204			1,204
Stock-based compensation		1,658			—			1,658			298			—			298
Accrued product warranty		317			8			325			644			22			666
Accrued compensated absences		579			—			579			549			—			549
Comprehensive income		1,344			—			1,344			573			—			573
Insurance and other reserves		1,088			31			1,119			973			63			1,036
		10,235			858			11,093			7,919			1,222			9,141
Deferred income tax liabilities:
Intangible assets		(285	)		—			(285	)		(230	)		—			(230	)
Property, plant and equipment and other		(4,768	)		(1,121	)		(5,889	)		(3,238	)		(632	)		(3,870	)
Subtotal deferred income tax asset		5,182			(263	)		4,919			4,451			590			5,041
Valuation allowance		—			—			—			—			—			—
Net deferred income tax asset	$	5,182		$	(263	)	$	4,919		$	4,451		$	590		$	5,041

Deferred income tax assets and liabilities are reported as follows in the accompanying consolidated balance sheets (in thousands):

	AS OF SEPTEMBER 30,
	2014			2013
Current deferred income tax asset	$	7,244		$	7,056
Noncurrent deferred income tax asset		75			594
Current deferred income tax liability		(23	)		(12	)
Noncurrent deferred income tax liability		(2,377	)		(2,597	)
	$	4,919		$	5,041

The financial reporting basis of investments in foreign subsidiaries exceed their tax basis. A deferred tax liability is not recorded for this temporary difference because the investment is essentially permanent. A reversal of the Company’s plans to permanently invest in these foreign operations would cause the excess to become taxable. At September 30, 2014 and 2013, the temporary difference related to undistributed earnings for which no deferred taxes have been provided was approximately $16.1 million and $12.7 million, respectively. The Company will need to reassess and reassert its ability and intent to indefinitely reinvest the remaining foreign earnings in order to continue the application of the exception under FASB guidelines.

The Company follows the provisions of the FASB guidance for accounting for uncertainty in income taxes. The Company classifies interest and penalties associated with the payment of income taxes in the Other Income (Expense) section of its consolidated statements of operations. Tax return filings which are subject to review by local tax authorities by major jurisdiction are as follows:

—	United States—fiscal years ended September 30, 2011 through 2014

—	State of Texas—fiscal years ended September 30, 2010 through 2014

—	State of New York—fiscal years ended September 30, 2003 through 2014

—	Russian Federation—calendar years 2011 through 2014

—	Canada—fiscal years ended September 30, 2010 through 2014

—	United Kingdom—fiscal years ended September 30, 2006, 2012, 2013 and 2014

—	Colombia—calendar years 2013 and 2014

The following table is a reconciliation of the total amounts of unrecognized tax liabilities (in thousands):

Balance at October 1, 2011	$	852
Change in prior year tax positions		(420	)
Current tax positions		63
Settlements with taxing authorities		(145	)
Lapse of statute of limitations		5
Balance at September 30, 2012		355
Change in prior year tax positions		(22	)
Current tax positions		142
Settlements with taxing authorities		(47	)
Lapse of statute of limitations		(114	)
Balance at September 30, 2013		314
Change in prior year tax positions		9
Current tax positions		23
Settlements with taxing authorities		—
Lapse of statute of limitations		(45	)
Balance at September 30, 2014	$	301

The Company believes that it is reasonably possible these unrecognized tax liabilities could change within the next twelve months based on the resolution of on-going income tax audits. At this time it is not possible to determine the range of such changes. These unrecognized tax liabilities would favorably affect the Company’s effective tax rate in future periods if they are favorably resolved.

As of September 30, 2014, the Company had netoperating loss (“NOL”) carry-forwards of approximately $3.1 million in Canada and approximately $0.2 million in the United Kingdom to offset future taxable income in those jurisdictions. The Company, using the “more likely than not” criteria, has determined these NOL carry-forwards will be utilized in full before they begin to expire. The NOL carry-forwards for Canada expire in 2021. The NOL carry-forwards for the United Kingdom currently have no expiration. Therefore, no valuation allowance against the Company’s deferred tax assets was considered necessary.

Management believes that adequate provisions for income taxes have been reflected in the consolidated financial statements and it is not aware of any significant exposure items that have not been reflected in the financial statements. Amounts considered probable of settlement within one year have been included in the accrued expenses and other liabilities in the accompanying consolidated balance sheets.