Income taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income tax

Note 3 - Income taxes

During the year ended December 31, 2012, the Company recognized $5,395,000 in federal and state income tax expense at statutory rates offset by the release during the 4^th quarter of 2012 of $4,000,000 of the Company’s deferred tax asset valuation allowance. During the year ended December 31, 2011, the Company recognized $634,000 in federal and state income tax expense. In future periods, the Company will be subject to federal and state income tax expense at statutory tax rates. Future usage of the Company’s NOL’s will be subjected to annual limitations of $1,300,000.

The following summarizes the provision for income taxes:

Years Ended December 31,	2012			2011
(in thousands)
Current:
Federal	$	1,846		$	0
State and local		585			51
		2,431			51
Deferred:
Federal		(927	)		522
State and local		(109	)		61
		(1,036	)		583
Provision for income taxes	$	1,395		$	634

Reconciliation of the Company's actual tax rate to the U.S. Federal statutory rate is as follows:

Years ended December 31,	2012			2011
Income tax rates
- Statutory U.S. federal rate		34	%		34	%
- States, net U.S. benefits		4	%		4	%
- Reduction of valuation allowance		(28	)%		0	%
Total		10	%		38	%

As of December 31, 2012, the Company had NOL's of approximately $11,000,000 expiring through 2029The Company’s NOL’s are subject to an annual limitation of $1,300,000.

Elements of deferred income tax assets (liabilities) are as follows:

December 31,	2012			2011
(in thousands)
Deferred tax assets (liabilities)
- Depreciation & amortization	$	(112	)	$	133
- Reserves for doubtful accounts		86			66
- Accrued payroll		0			166
- Inventory reserve		148			137
- NOL		4,000			7,014
Subtotal		4,122			7,516
- Valuation allowance		0			(4,430	)
Total	$	4,122		$	3,086

The Company considered its projected future taxable income, and associated annual limitations, in determining the amount of deferred tax assets to recognize. The Company believes that given the extended time period that it may recognize its deferred tax assets, it is more likely than not it will realize the benefit of these assets prior to their expiration. As of December 31, 2012, there is no further deferred tax asset valuation allowance.