Income Taxes

12 Months Ended

Dec. 31, 2012

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 federal net operating loss ("NOL") carryforward of $591,000 at December 31, 2011 and 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 and 2010, we had  NOL carryforwards of approximately $1,738,000, and $3,680,000, respectively.  The U.S. NOL carryforward was fully utilized during the twelve month period ended December 31, 2012.

TPT, our European operation, had NOL carryforwards at December 31, 2010 of approximately $867,000 which was fully utilized during the twelve month period ended December 31, 2011.

Our Asian operation, TMM, had NOL carryforwards of approximately $2,934,000, $3,661,000 and $4,530,000, at December 31, 2012, 2011 and 2010, 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.

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)		2012		2011		2010
	Domestic	$	2,829	$	1,918	$	1,229
	Foreign	3,223		1,966		1,075
	Pretax income (loss)	$	6,052	$	3,884	$	2,304

								Components of Income Tax Expense
								Year Ended December 31,
				2012						2011						2010
(In thousands)		Current		Deferred		Total		Current		Deferred		Total		Current		Deferred		Total
	Federal	$	364	$	389	$	753	$	-	$	-	$	-	$	-	$	-	$	-
	State	11		-		11		8		-		8		7		-		7
	Foreign	133		127		260		21		19		40		-		9		9
Total Income
Tax Expense		$	508	$	516	$	1,024	$	29	$	19	$	48	$	7	$	9	$	16

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)				2012		2011		2010
	Expense computed at statutory rate			$	2,058	$	1,321	$	783
	Change in valuation allowance - Domestic			(259)		(684)		(451)
	Change in valuation allowance - Foreign			-		(200)		(267)
	Effect of items deductible for book not tax, net
		Option compensation		30		20		31
		Other		14		19		(42)
	Effect of foreign tax credit			(547)		(190)
	Effect of foreign tax rate differential			(279)		(243)		(43)
	State income taxes, net of Federal benefit			7		5		5
				$	1,024	$	48	$	16
Significant Components of Deferred Taxes						Year Ended December 31,
(In thousands)						2012		2011
	Deferred Tax Assets:
		Net operating loss carryforwards - Domestic				$	-	$	591
		Net operating loss carryforwards - Foreign				733		915
		PP&E - Foreign				10		10
		Intercompany profit				83		17
		Alternative minimum tax credit carryforwards				-		65
		Domestic reserves				16		17
		Unrealized foreign currency losses - Domestic				62		19
		Other deferred assets				35		20
						939		1,654
		Valuation allowance				-		(259)
	Total deferred tax assets					$	939	$	1,395
	Deferred Tax Liabilities:
		PP&E - Domestic				654		628
		PP&E - Foreign				1,442		1,405
		Unrealized gain on derivatives				20		22
		Other				3		5
			Total deferred tax liabilities			2,119		2,060
	Net deferred tax liability					$	(1,180)	$	(665)