Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 16 — Income Taxes

A summary of domestic and foreign income before income taxes and including minority interest follows:

	Year Ended December 31,
	2011		2010		2009
Domestic	$	113,697	$	77,537	$	92,364
Foreign		8,454		4,841		8,060
Total	$	122,151	$	82,378	$	100,424

The income tax expense consisted of the following:

	Year Ended December 31,
	2011			2010			2009
Current:
Federal	$	30,869		$	34,752		$	22,643
State		6,586			5,281			3,930
Foreign		3,078			1,854			2,297
Total current provision		40,533			41,887			28,870
Deferred:
Federal		4,852			(7,187	)		7,705
State		365			(1,739	)		1,150
Foreign		(9	)		(16	)		(52	)
Total deferred provision (benefit)		5,208			(8,942	)		8,803
Income tax expense	$	45,741		$	32,945		$	37,673

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred income tax assets and liabilities consisted of the following:

	December 31,
	2011		2010
Current deferred income tax assets:
Inventory valuation	$	19,602	$	17,246
Allowance for doubtful accounts		851		1,129
Accrued liabilities		8,662		11,637
Contribution carryforward		107		107
Tax loss carryforward		—		405
Tax credit carryforward		576		576
Current deferred income tax assets (included in prepaid expenses and other current assets)	$	29,798	$	31,100
Non-current deferred income tax liabilities, net:
Property, plant and equipment	$	15,973	$	12,194
Intangible assets		62,128		60,869
Amortization of goodwill and other assets		19,746		20,761
Other		2,336		1,157
Non-current deferred income tax liabilities, net	$	100,183	$	94,981

At December 31, 2011, the Company had alternative minimum tax credit carryforwards of $576, which do not expire.

The difference between the Company’s effective income tax rate and the federal statutory income tax rate is reconciled below:

	Year Ended December 31,
	2011			2010			2009
Provision at federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income tax, net of federal income tax benefit		3.5			2.8			3.1
Warrant compensation charge not deductible		—			2.0			—
Domestic manufacturing deductions		(1.8	)		(3.0	)		(0.8	)
Adjustments related to previous acquisitions		—			3.5			—
Other		0.7			(0.3	)		0.2
Effective income tax rate		37.4	%		40.0	%		37.5	%

In 2010, the Company recorded certain adjustments related to deferred tax accounts recorded during the current year related to activities associated with previous acquisitions which resulted in domestic tax expense of $2,905.

Other differences between the effective income tax rate and the federal statutory income tax rate are composed of favorable permanent differences related to inventory contributions and favorable foreign rate differences, offset by the non-deductible portion of meals and entertainment expenses and, in 2011, offset by the settlement of an IRS audit of the Company’s 2008 and 2009 Federal income tax returns.

At December 31, 2011 and 2010, the Company’s share of the cumulative undistributed earnings of its foreign subsidiaries whose earnings are considered permanently reinvested was approximately $26,435 and $27,925, respectively. No provision has been made for U.S. or additional foreign taxes on the undistributed earnings of certain foreign subsidiaries, because such earnings are expected to be reinvested indefinitely in the subsidiaries’ operations. It is not practical to estimate the amount of additional tax that might be payable on these foreign earnings in the event of distribution or sale; however, under existing law, foreign tax credits would be available to substantially reduce incremental U.S. taxes payable on amounts repatriated.

The Company and its subsidiaries file a U.S. federal income tax return, and over 100 state, city, and foreign tax returns.

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits :

	2011			2010			2009
Balance as of January 1,	$	831		$	992		$	2,024
Increases related to current year tax positions		49			73			81
Increases related to prior year tax positions		—			505			—
Decrease related to settlements		(253	)		(334	)		(822	)
Decreases related to lapsing of statutes of limitations		(135	)		(405	)		(291	)
Balance as of December 31,	$	492		$	831		$	992

The Company’s total net unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate are $362 and $744 at December 31, 2011 and 2010, respectively. The Company expects to recognize $101 of the balance prior to December 31, 2012, upon the expiration of the period to assess tax in various federal, state and foreign taxing jurisdictions.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company has accrued $48 and $90 for the potential payment of interest and penalties at December 31, 2011 and 2010, respectively. During 2011, 2010 and 2009, the Company recorded credits in income tax expense of $42, $56 and $119, respectively, related to interest and penalties.

For federal income tax purposes, the years 2010 through 2011 are open to examination at December 31, 2011. For non-U.S. income tax purposes, tax years from 2006 through 2010 remain open. Lastly, the Company is open to state and local income tax examinations for the tax years 2007 through 2011.