Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 8    Income Taxes

The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

Details of earnings from continuing operations before income taxes and the related provision for income taxes are as follows:

	2011		2010		2009
	(In thousands)
Domestic	$	23,750	$	42,213	$	41,374
Foreign		3,599		2,225		959
Total	$	27,349	$	44,438	$	42,333

The provision (benefit) for income taxes from continuing operations is as follows:

	2011			2010			2009
	(In thousands)
Current:
Federal	$	7,111		$	14,696		$	11,990
State		1,290			2,553			2,332
Foreign		780			385			229
Deferred:
Federal		(774	)		(1,485	)		1,211
State		(79	)		(324	)		(138	)
Foreign		(140	)		(49	)		(71	)
Total	$	8,188		$	15,776		$	15,553

The provision (benefit) for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate in each year due to the following items:

	2011			2010			2009
	(In thousands)
Provision at statutory rate	$	9,572		$	15,553		$	14,816
State income taxes, net of federal tax benefit		783			1,449			1,416
Foreign income taxes		(621	)		(430	)		(178	)
Domestic production activities deduction		(255	)		(573	)		(315	)
Valuation allowance		—			—			(351	)
Tax audit settlements		(1,330	)		—			—
Other		39			(223	)		165
Actual provision	$	8,188		$	15,776		$	15,553

The components of deferred income taxes as of December 31 are as follows:

	2011		2010
	(In thousands)
Deferred tax assets:
Reserve for receivables	$	32	$	146
Reserve for inventories		1,642		1,603
Accrued compensation		873		848
Payables		717		394
Non-pension postretirement benefits		2,516		2,471
Accrued pension benefits		3,338		1,424
Accrued employee benefits		1,266		1,393
Currency translation loss		86		—
Tax credit carryforwards		45		—
Net operating loss carryforwards		—		90
Total deferred tax assets		10,515		8,369
Deferred tax liabilities:
Depreciation		4,792		3,505
Other		64		84
Total deferred tax liabilities		4,856		3,589
Net deferred tax assets	$	5,659	$	4,780

At December 31, 2011, the Company did not have any net operating loss carryforwards.

No provision for federal income taxes was made on the earnings of foreign subsidiaries that are considered permanently invested or that would be offset by foreign tax credits upon distribution. Such undistributed earnings at December 31, 2011 were $14.0 million.

Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows:

	2011			2010
	(In thousands)
Balance at beginning of year	$	2,125		$	1,994
Increases (decreases) in unrecognized tax benefits as a result of positions taken during the prior period		8			(69	)
Increases in unrecognized tax benefits as a result of positions taken during the current period		141			220
Decreases in unrecognized tax benefits relating to settlements with taxing authorities		(1,368	)		—
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations		(110	)		(20	)
Balance at end of year	$	796		$	2,125

The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits during the fiscal year ending December 31, 2012. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate in a future period, possibly as early as the fiscal year ending December 31, 2012.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2007. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. Accrued interest was $0.1 million and $0.2 million at December 31, 2011 and 2010, respectively, and there were no penalties accrued in either year.

The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

The 2009 results include recognition of previously unrecognized tax benefits for certain deductions that were taken on prior tax returns related to the 2006 shutdown of the Company’s French subsidiaries, which had been reflected as a discontinued operation in 2007 and 2006. These tax benefits ($7.4 million) were recognized as earnings from discontinued operations in 2009 because such tax benefits became more likely than not upon the conclusion of an Internal Revenue Service audit of the Company’s 2006 federal income tax return. On a diluted basis, earnings per share from discontinued operations for 2009 were $0.49. In addition, the Company recognized interest income in continuing operations during 2009 because it recognized an interest expense reversal of $1.2 million that was previously accrued and charged to continuing operations in 2007 and 2008 relating to this uncertain tax position.