Income Taxes

12 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

INCOME TAXES

5.    INCOME TAXES

The provision for income taxes is summarized below:

	2012		2011		2010
Current expense (benefit):
Federal	$	—	$	153	$	(769	)
State		44		91		42
Total current income tax expense (benefit)		44		244		(727	)
Deferred		2,697		3,280		299
Change in valuation allowance		—		—		(1,601	)
Total deferred income tax expense		2,697		3,280		(1,302	)
Total income tax expense	$	2,741	$	3,524	$	(2,029	)

The consolidated effective tax rates differ from the federal statutory rates as follows:

	2012			2011			2010
Statutory federal rate		35.0	%		35.0	%		(35.0	)%
State income taxes after federal income tax		5.6			6.4			16.4
Valuation allowance		—			—			(12.9	)
General business credits		—			—			4.1
Other		1.5			(0.2	)		2.3
Consolidated effective tax rate		42.1	%		41.2	%		(25.1	)%

The following is an analysis of accumulated deferred income taxes:

	2012			2011
Assets:
Current:
Bad debts	$	1,185		$	1,168
Employee benefit accruals		933			356
Inventory		1,174			1,193
Net operating loss carryforward		3,200			1,809
Other		2,369			2,849
Total current		8,861			7,375
Noncurrent:
Employee benefit accruals		461			509
Environmental		2,556			2,633
Net operating loss carryforward		—			2,894
Other		—			771
Property		1,815			2,208
Valuation allowance		(265	)		(265	)
Total noncurrent		4,567			8,750
Total net assets	$	13,428		$	16,125

The Company has federal and state net operating loss carryforwards, or NOLs, of approximately $9,023 and $489, respectively, which are due to expire in fiscal 2025 through fiscal 2030 and fiscal 2013, respectively. These NOLs may be used to offset future taxable income through their respective expiration dates and thereby reduce or eliminate the Company’s federal income taxes otherwise payable. A valuation allowance of $265 was established in a prior year relating to other items, as it is management’s belief that it is more likely than not that a portion of this deferred asset is not realizable.

If the Company does not generate adequate taxable earnings, some or all of our deferred tax assets may not be realized. Additionally, changes to the federal income tax laws also could impact its ability to use the NOLs. In such cases, the Company may need to revise the valuation allowance established related to deferred tax assets.

The Internal Revenue Code of 1986, as amended (the “Code”), imposes significant limitations on the utilization of NOLs in the event of an “ownership change” as defined under section 382 of the Code (the “Section 382 Limitation”). The Section 382 Limitation is an annual limitation on the amount of pre-ownership NOLs that a corporation may use to offset its post-ownership change income. The Section 382 Limitation is calculated by multiplying the value of a corporation’s stock immediately before an ownership change by the long-term tax-exempt rate (as published by the Internal Revenue Service). Generally, an ownership change occurs with respect to a corporation if the aggregate increase in the percentage of stock ownership by value of that corporation by one or more 5% shareholders (including specified groups of shareholders who, in the aggregate, own at least 5% of that corporation’s stock) exceeds 50 percentage points over a three-year testing period. The Company believes that it has not gone through an ownership change over the most recent three-year testing period that would cause the Company’s NOLs to be subject to the Section 382 Limitation. However, given the Company’s current ownership structure, the creation of one or more new 5% shareholders could result in the Company’s NOLs being subject to the Section 382 Limitation.

At March 31, 2012, the Company had no unrecognized tax benefits, and the Company does not expect the liability for uncertain tax positions to increase during the next fiscal year.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company’s tax years for fiscal 2007 through the present are subject to examination by the tax authorities. With few exceptions, the Company is no longer subject to United States federal, state, local or foreign examinations by tax authorities for years before fiscal 2006.

The Company recognizes interest and penalties, related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties, if incurred, are included within the related tax liability line in the consolidated balance sheets.