8. Income taxes

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

8. Income taxes

We recorded an income tax provision for the second quarter of 2012 of $286,000 at an effective tax rate of 36.0%, compared to an income tax provision during the second quarter of 2011 of $777,000 at an effective tax rate of 35.0%. For the six months ended June 30, 2012, we recorded an income tax provision of $966,000 at an effective tax rate of 36.0%, compared to an income tax provision during the six months ended June 30, 2011 of $1,759,000 at an effective tax rate of 35.0%. Our effective tax rate for the second quarter and six months of 2012 is higher than the corresponding 2011 periods because it does not include any benefit from the federal research and development credit that expired at the end of 2011.

We are subject to U.S. federal income tax as well as income tax of certain state and foreign jurisdictions.  We have substantially concluded all U.S. federal income tax, state and local, and foreign tax matters through 2003.  During 2008, a limited scope examination of our 2005 and 2006 federal tax returns was completed.  However, our federal tax returns for the years 2004 through 2011 remain open to examination.  Various state and foreign tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Condensed Consolidated Financial Statements.  No federal, state or foreign tax jurisdiction income tax returns are currently under examination. As of June 30, 2012, we had $228,000 of total gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods.