Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Pretax income (loss) for the years ending December 31, 2012, 2011 and 2010 was taxed in the following jurisdictions:

The provision (benefit) for income taxes in each of 2012, 2011 and 2010 is summarized below:

Deferredtax assets (liabilities) were comprised of the following at December 31:


	2012			2011
	(In thousands)
Deferred tax assets
Inventory	$	1,187		$	1,185
Bad debt provision		49			85
Property, plant and equipment		109			59
Deferred credits		1,281			1,281
Loss carryforwards		1,054			1,035
Rent		162			150
Other		817			431

Gross deferred tax assets		4,659			4,226
Less valuation allowance⁽²⁾		(1,376	)		(1,213	)

		3,283			3,013

Deferred tax liabilities
Property, plant and equipment		(61	)		(22	)
Unremitted earnings of foreign affiliates		(58	)		(77	)
Other		(30	)		—

Gross deferred tax liabilities		(149	)		(99	)

Net deferred tax assets⁽¹⁾	$	3,134		$	2,914

(1)	Of the total deferred tax assets at December 31, 2012 and 2011, $1,849,000 and $1,787,000 were included in current assets and $1,285,000 and $1,127,000 in 2012 and 2011 were included in other long-term assets at December 31, 2012 and 2011, respectively.

(2)	The deferred tax valuation allowance increased by $163,000 during 2012, $15,000 during 2011 and $37,000 during 2010.

Set forth below is a reconciliation between actual tax expense and expected tax expense for the respective periods presented below:


	Year Ended December 31,
	2012			2011			2010
	(In thousands)
Earnings (loss) before income taxes	$	(2,595	)	$	(1,141	)	$	569

Expected income tax expense at 34%	$	(882	)	$	(388	)	$	193
Difference in rates on earnings of foreign operations		83			80			6
Stock based compensation and other nondeductible expenses		27			43			96
State taxes and credits (net of federal benefit)		50			40			80
Change in valuation allowance		—			7			36
Unremitted earnings of foreign subsidiaries		(19	)		(1	)		—
Exclusion of earnings of foreign affiliates		(54	)		(12	)		(6	)
Foreign dividend		192			—			—
Other		22			(24	)		12

Income tax provision (benefit)	$	(581	)	$	(255	)	$	417

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:


Unrecognized Tax Benefits (in thousands):	2012		2011
Balance as of January 1,	$	260	$	260
Additions for tax positions related to the current year		3		29
Reductions for tax positions of prior years		—		(29	)

Balance as of December 31,	$	263	$	260