Taxes on Income

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

10.  Taxes on Income

The components of income tax (benefit) expense are as follows:

In thousands	2013		2012
Current:
Federal	$	(348)	$	80
State and local		(44)		9
Foreign		22		23
Income tax (expense) benefit, current		(370)		112
Deferred:
Federal		-		-
State and local		-		-
Income tax (expense) benefit, deferred		-		-
Income tax (benefit) expense	$	(370)	$	112

Loss from continuing operations before income taxes from the United States operations is $3.1 million and $1.0 million for the years ended December 31, 2013 and 2012, respectively. Income (loss) from continuing operations before income taxes from Canada is $0.2 million and $(0.1) million for the years ended December 31, 2013 and 2012, respectively.

Income tax expense for continuing operations differed from the expected federal statutory rate of 34.0% as follows:

	2013	2012
Statutory federal income tax benefit rate	34.0%	34.0%
State income taxes, net of federal benefit	4.3	3.6
Federal tax credit refund	-	-
Foreign income taxed at different rates	2.6	(4.8)
Deferred tax asset valuation allowance	(52.8)	(22.7)
Other	(1.0)	-
Effective income tax rate	(12.9)%	10.1%

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred income tax assets and liabilities are as follows:

In thousands	2013		2012
Deferred income tax asset:
Tax credit carryforwards	$	897	$	897
Operating loss carryforwards		12,674		12,188
Net pension costs		3,426		3,366
Warrant liabilities		(624)		(169)
Accruals		314		399
Allowance for bad debts		9		(1)
Other		749		548
Valuation allowance		(13,069)		(12,377)
Deferred income tax asset, Total		4,376		4,851
Deferred income tax liability:
Depreciation		3,349		3,839
Other		1,027		1,012
Deferred income tax liability, Total		4,376		4,851
Net deferred income taxes	$	-	$	-

Tax credit carryforwards primarily relate to federal alternative minimum taxes of $0.8 million paid by the Company, which may be carried forward indefinitely and applied against regular federal taxes. Operating tax loss carryforwards primarily relate to U.S. federal net operating loss carryforwards of approximately $31.6 million, which begin to expire in 2019. The Company’s restructuring plan, see Note 3 – Plan of Restructuring for further details, resulted in an ownership change during 2012 as defined under Section 382 of the Internal Revenue Code and the net operating loss carryforwards are subject to a deduction limitation.

A valuation allowance has been established for the amount of deferred income tax assets as management has concluded that it is more-likely-than-not that the benefits from such assets will not be realized.

The Company’s policy is to classify interest and penalties related to uncertain tax positions in income tax expense.  The Company does not have any material uncertain tax positions in 2013 and 2012.  The Company does not believe that there will be any material uncertain tax positions in 2014.

The Company is subject to U.S. federal income tax as well as income tax in multiple state and local jurisdictions and Canadian federal and provincial income tax.  Currently, no federal, state or provincial income tax returns are under examination.  The tax years 2009 through 2012 remain open to examination by the major taxing jurisdictions and the 2008 tax year remains open to examination by some state and local taxing jurisdictions to which the Company is subject.