Taxes on Income

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

9.  Taxes on Income

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

In thousands	2014		2013
Current:
Federal	$	-	$	(348)
State and local		-		(44)
Foreign		29		22
Income tax (expense) benefit, current		29	$	(370)
Deferred:
Federal		-		-
State and local		-		-
Income tax (expense) benefit, deferred		-		-
Income tax expense (benefit)	$	29	$	(370)

Loss from continuing operations before income taxes from the United States operations is $4.7 million and $3.1 million for the years ended December 31, 2014 and 2013, respectively. Income from continuing operations before income taxes from Canada is $0.1 million and $0.2 million for the years ended December 31, 2014 and 2013, respectively.

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

	2014	2013
Statutory federal income tax benefit rate	34.0%	34.0%
State income taxes, net of federal benefit	(12.9)	4.3
Federal tax credit refund	-	-
Foreign income taxed at different rates	(0.1)	2.6
Deferred tax asset valuation allowance	123.3	(52.8)
Net operating loss limitation	(156.9)	-
Other	12.0	(1.0)
Effective income tax rate	(0.6)%	(12.9)%

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	2014		2013
Deferred income tax asset:
Tax credit carryforwards	$	897	$	897
Operating loss carryforwards		5,772		12,674
Net pension costs		3,052		3,426
Warrant liabilities		-		(624)
Accruals		259		314
Allowance for bad debts		41		9
Other		402		749
Valuation allowance		(7,401)		(13,069)
Deferred income tax asset, Total		3,022		4,376
Deferred income tax liability:
Depreciation		2,320		3,349
Other		702		1,027
Deferred income tax liability, Total		3,022		4,376
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 $10.4 million, which begin to expire in 2019. The operating loss carryforwards have been limited by a change in ownership of the Company in 2012 as defined under Section 382 of the Internal Revenue Code.  This change in ownership as of June 26, 2012 had limited our operating loss carryforwards at that point to $295,000 per year aggregating $5.9 million.  Subsequent losses in the remainder of 2012 and in 2013 have increased our operating loss carryforward to its current level.

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 2014 and 2013.  The Company does not believe that there will be any material uncertain tax positions in 2015.

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 or provincial income tax returns are under examination.  The state of Illinois is currently examining the 2011 and 2012 tax years.  We do not expect any adverse material outcome from this examination.  The tax years 2010 through 2013 remain open to examination by the major taxing jurisdictions and the 2009 tax year remains open to examination by some state and local taxing jurisdictions to which the Company is subject.