Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8                INCOME TAXES

The provision for (benefit from) income taxes consists of the following:

Years ended December 31,	2014			2013			2012
Current:
Federal	$	(8,646,000	)	$	3,524,000		$	5,503,000
Prior year over accrual		44,000			---			---
State		6,000			---			---
Deferred:
Federal		(3,877,000	)		(107,000	)		11,000
	$	(12,473,000	)	$	3,417,000		$	5,514,000

The difference between the income tax provision computed at the federal statutory rate and the actual tax provision is accounted for as follows:

December 31,	2014			2013			2012
Taxes computed at the federal statutory rate	$	(12,812,000	)	$	3,792,000		$	5,701,000
State income tax, net		4,000			--			---
Prior year true-up		44,000			190,000			47,000
Research and development tax credit		(140,000	)		---			---
Reduction in domestic production activity		893,000			---			---
AMT credit carryforward		(584,000	)		---			---
Permanent differences		122,000			(565,000	)		(234,000	)
Provision for (benefit from) income taxes	$	(12,473,000	)	$	3,417,000		$	5,514,000

The components of deferred income tax assets and liabilities are as follows:

Deferred Tax Assets:	2014		2013
Revenue recognition	$	560,000	$	408,000
Interest rate swap		5,000		---
Allowance for doubtful accounts		9,000		9,000
Credit carryforwards		1,134,000		---
Deferred tax asset-current		1,708,000		417,000
Deferred rent		197,000		191,000
Stock options		827,000		931,000
Interest rate swap		---		11,000
Net operating loss carryforward		2,567,000		---
Deferred Tax Assets-non current		3,591,000		1,133,000
Deferred Tax Liabilities:
Prepaid expenses		128,000		89,000
Deferred Tax Liabilities-current		128,000		89,000
Property and equipment		622,000		788,000
Deferred tax liability-noncurrent		622,000		788,000
Net Deferred Tax Assets (Liabilities)	$	4,549,000	$	673,000

The Company recognized, for income tax purposes, a tax benefit of $513,000, $266,000 and $528,000 for the years ended December 31, 2014, 2013 and 2012, respectively, for compensation expense related to its stock option plan for which no corresponding charge to operations has been recorded. Such amounts have been added to additional paid-in capital in those years.

Because of the change in estimate on the Company’s A-10 program, described above, the Company incurred a net loss for the year ended December 31, 2014. This net loss, after adjustment for carrying back tax losses to recover previously paid taxes, results in a net operating loss carryforward at December 31, 2014 of approximately $7,600,000 which will expire in 2029.