Note 14 - Income Taxes

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. Income Taxes

Provisions for income taxes were $3.9 million and $2.0 million for the three-month periods ended March 31, 2016 and 2015, respectively, based on effective tax rates of 36.1% and 36.4%. The increase in income taxes for the three-month period ended March 31, 2016 resulted from higher net income as compared to the same period last year. The net decrease in the effective tax rate

for the three-month period ended March 31, 2016, as compared to the same period in 2015,

was primarily due to an increase in the expected tax credit for research and development expenditures.

The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in Italy. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The Company’s filings from 2012 through the present tax year remain subject to examination by the IRS and other taxing authorities for U.S. federal and state tax purposes. The Company’s filings from 2011 through the present tax year remain subject to examination by the appropriate governmental authorities in Italy.

In connection with the preparation of the financial statements, the Company performed an analysis to ascertain if it was more likely than not that it would be able to utilize, in future periods, the net deferred tax assets associated with its net operating loss carryforward. The Company concluded that the positive evidence outweighs the negative evidence and, thus, those deferred tax assets are realizable on a “more likely than not” basis. As such, the Company did not record a valuation allowance at March 31, 2016 or December 31, 2015.