Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The Company provides for deferred taxes on temporary differences between the financial statements and tax bases of assets using the enacted tax rates that are expected to apply to taxable income when the temporary differences are expected to reverse.

Our U.S. operation had deferred tax assets related to NOL carryforwards of $591,000 and at December 31, 2011, we maintained a valuation allowance of approximately 43% due to uncertainties as to the Company’s ability to utilize this deferred tax asset.

At December 31, 2011, 2010 and 2009, we had federal net operating loss (“NOL”) carryforwards of approximately $1,738,000, $3,680,000, and $4,200,000, respectively. The U.S. NOL carryforward will expire from 2018 to 2029.

TPT, our European operation, had NOL carryforwards at December 31, 2010 and 2009 of approximately $867,000 and $1,913,000, respectively. The remaining balance of TPT’s NOL was fully utilized during the twelve month period ended December 31, 2011.

Our Asian operation, TMM, had NOL carryforwards of approximately $3,661,000, $4,530,000 and $3,842,000, at December 31, 2011, 2010 and 2009, respectively. Because these foreign NOL carryforwards have an indefinite carry forward period, we have determined that it is not necessary to provide a valuation allowance for this NOL carryforward.

The undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested. Accordingly, no provision for U.S. federal and state income taxes or foreign withholding taxes has been provided on approximately $6,000,000 of such cumulative undistributed earnings. Determination of the potential amount of unrecognized deferred U.S. income tax liability and foreign withholding taxes is not practicable because of the complexities associated with its hypothetical calculation.

Components of Pretax Income (Loss)	Year Ended December 31,
(In thousands)		2011		2010		2009
Domestic	$	1,918	$	1,228	$	(217)
Foreign		1,966		1,075		85
Pretax income (loss)	$	3,884	$	2,303	$	(132)

							Components of Income Tax Expense
							Year Ended December 31,
			2011						2010						2009
(In thousands)		Current		Deferred		Total	Current			Deferred		Total		Current		Deferred		Total
Federal	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
State		8		-		8		7		-		7		3		-		3
Foreign		21		19		40		-		9		9		-		1		1
Total Income
Tax Expense	$	29	$	19	$	48	$	7	$	9	$	16	$	3	$	1	$	4

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 34% to income before taxes.

Effective Tax Rate Reconciliation			Year Ended December 31,
(In thousands)		2011			2010		2009
Expense (benefit) computed at statutory rate	$	1,321		$	783	$	(44)
Change in valuation allowance - Domestic		(684)			(451)		(21)
Change in valuation allowance - Foreign		(200)			(267)		(24)
Effect of items deductible for book not tax, net
Option compensation			20		31		90
Other		(171)			(42)		8
Effect of foreign tax rate differential		(243)			(43)		(7)
State income taxes, net of Federal benefit			5		5		2
	$		48	$	16	$	4

Significant Components of Deferred Taxes	Year Ended December 31,
(In thousands)		2011		2010
Deferred Tax Assets:
Net operating loss carryforwards - Domestic	$	591	$	1,250
Net operating loss carryforwards - Foreign		915		1,340
PP&E - Foreign		10		10
Intercompany profit		17		12
Alternative minimum tax credit carryforwards		65		65
Domestic reserves		17		17
Unrealized foreign currency losses - Domestic		19		14
Other deferred assets		20		20
		1,654		2,728
Valuation allowance		(259)		(1,150)
Total deferred tax assets	$	1,395	$	1,578
Deferred Tax Liabilities:
PP&E - Domestic		628		598
PP&E - Foreign		1,405		1,598
Unrealized gain on derivatives		22		23
Other		5		5
Total deferred tax liabilities		2,060		2,224
Net deferred tax liability	$	(665)	$	(646)