INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES

INCOME TAXES

5. INCOME TAXES

        The provision for income taxes is based on income before income taxes as follows (in thousands):

	For the year ended December 31, 2011		For the year ended December 31, 2010
Domestic	$	2,821	$	998
Foreign		6,698		4,168
Income before income taxes	$	9,519	$	5,166

        Components of the total provision for income taxes are as follows (in thousands):

	For the year ended December 31, 2011		For the year ended December 31, 2010
Current provision:
Domestic	$	302	$	168
Foreign		1,190		1,028
Total current provision		1,492		1,196
Deferred provision:
Domestic		984		385
Foreign		76		—
Total deferred provision		1,060		385
Provision for income taxes	$	2,552	$	1,581

        The provision for income taxes differs from the amount determined by applying the federal statutory rate as follows (in thousands):

	For the year ended December 31, 2011			For the year ended December 31, 2010
Tax provision, computed at statutory rate		34.0	%		34.0	%
State tax, net of federal impact		1.7	%		2.6	%
Permanent item; adjustment to contingent consideration		(3.9	)%		—	%
Effect of foreign tax rate differences		(4.6	)%		(6.7	)%
Other		(.4	)%		0.7	%
Provision for income taxes		(26.8	)%		30.6	%

        The tax effects of significant temporary differences and credit and operating loss carryforwards that give rise to the net deferred tax assets and tax liabilities are as follows (in thousands):

	December 31, 2011			December 31, 2010
Current deferred tax assets:
Allowances and other	$	587		$	484
Tax credit carryforwards		—			132
Net operating loss carryforwards		749			—
Total current deferred tax assets		1,336			582
Valuation allowance		(82	)		(214	)
Net current deferred tax assets	$	1,254		$	402
Noncurrent deferred tax assets:
Employee benefit plans	$	1,268		$	886
Net operating loss carryforwards		—			1,303
Goodwill and Intangibles		2,349			2,695
Property, plant & equipment		50			295
Other		659			354
Total noncurrent deferred tax assets	$	4,326		$	5,533
Deferred tax liabilities:
Acquired property, plant and equipment and intangible assets	$	756		$	930
Other		217			140
Total deferred tax liabilities	$	973		$	1,070

        The Company has a domestic net operating loss carryforward of $2,081,000 expiring in 2025 through 2030.

        During 2010, the Company acquired foreign operating losses and tax credit carryforwards in relation to its acquisition of Agile Systems Inc. in Canada. At the time of the acquisition, the Company could not conclude, on a more likely than not basis, that it would ultimately realize tax benefits from the losses and credits, and therefore valued the deferred benefit at zero. During 2011 and 2010, the Company utilized a portion of the foreign tax loss carryforward which reduced the consolidated tax provision for income taxes by $244,000 and $195,000, respectively; however, the Company has not concluded that it will ultimately realize the foreign tax carryforward on a more likely than not basis. . The Company will continue to assess its ability to utilize any portion of the tax carryforward balance and whether it should record a deferred tax asset related to this loss carryforward. Realization of the Company's recorded deferred tax assets is dependent upon the Company generating sufficient taxable income in the appropriate tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of domestic net operating losses and tax credit carryforwards. The Company has recorded a valuation allowance due to the uncertainty related to the realization of certain deferred tax assets existing at December 31, 2011. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are changed. Management believes that it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of valuation allowances as of December 31, 2011.

        The Company files income tax returns in various U.S. and foreign taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state tax examinations in its major tax jurisdictions for periods before 2007. The Company is no longer subject to tax examinations in The Netherlands or Sweden for periods before 2006.