Taxes on Income

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8.  Taxes on Income

The components of income tax expense are as follows:

In thousands	2015		2014
Current:
Federal	$	-	$	-
State and local		-		-
Foreign		23		29
Income tax (expense) benefit, current	$	23	$	29
Deferred:
Federal	$	-	$	-
State and local		-		-
Income tax (expense) benefit, deferred		-		-
Income tax expense	$	23	$	29

Loss before income taxes from the United States operations is $2.2 million and $4.7 million for the years ended December 31, 2015 and 2014, respectively.  Income before income taxes from Canada is $0.5 million and $0.1 million for the years ended December 31, 2015 and 2014, respectively.

The effective income tax rate differed from the expected federal statutory income tax benefit rate of 34.0% as follows:

	2015		2014
Statutory federal income tax  benefit rate	34.0	%	34.0	%
State income taxes, net of federal benefit	4.8		(12.9)
Foreign income taxed at different rates	7.5		(0.1)
Deferred tax asset valuation  allowance	(46.4)		123.3
Net operating loss limitation	-		(156.9)
Other	(1.2)		12.0
Effective income tax rate	(1.3)	%	(0.6)	%

Significant components of the Company’s deferred income tax assets and liabilities are as follows:

In thousands	2015		2014
Deferred income tax asset:
Tax credit carryforwards	$	897	$	897
Operating loss carryforwards		6,253		5,772
Net pension costs		2,749		3,052
Accruals		250		259
Allowance for bad debts		55		41
Other		415		402
Valuation allowance		(8,208)		(7,401)
Deferred income tax asset, Total		2,411		3,022
Deferred income tax liability:
Depreciation		1,600		2,320
Other		811		702
Deferred income tax liability, Total		2,411		3,022
Net deferred income taxes	$	-	$	-

Tax credit carryforwards primarily relate to federal alternative minimum taxes of $865,000 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 $6.3 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 the years since 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 determinations regarding uncertain income tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. The Company does not have any material uncertain tax positions in 2015 and 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 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.