Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

(6) Income Taxes

The Company maintains a valuation allowance for a portion of its U.S. deferred tax assets and certain non-U.S. deferred tax assets. The valuation allowance is calculated in accordance with the provisions of ASC 740 “Income Taxes,” which requires that a valuation allowance be established or maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. In the event the Company’s expectations of future operating results change, the valuation allowance may need to be adjusted upward or downward. As of March 31, 2012, the Company’s unreserved U.S. net deferred tax assets totaled $12.9 million. These existing unreserved net deferred tax assets are currently considered to be “more likely than not” realized.

The Company’s effective tax rates for the three months ended March 31, 2012 and 2011 were 28.9% and 24.6%, respectively. The increase in the Company’s effective tax rate for the three months ended March 31, 2012 was primarily due to the establishment of a valuation allowance adjustment for certain foreign operating loss carryforwards in the first quarter of 2012. Excluding the additional valuation allowance, the Company’s effective tax rate for the three months ended March 31, 2012 was 25.2%.

The Company has approximately $1.4 million of unrecognized tax benefits and does not expect to recognize significant increases in unrecognized tax benefits during the next twelve month period. Interest and penalties, if any, related to unrecognized tax benefits are recorded in income tax expense.

The Company’s U.S. federal tax returns for 2007 and subsequent years remain subject to examination by tax authorities. The Company is no longer subject to IRS examination for periods prior to 2007, although carryforward attributes that were generated prior to 2007 may still be adjusted upon examination by the IRS if they either have been or will be used in an open year. In the Company’s foreign tax jurisdictions, tax returns for 2008 and subsequent years generally remain open to examination.