Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
Income Taxes
Note 8 Income Taxes
 
Deferred income taxes reflect the net tax effects 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 tax liabilities and assets are as follows at the respective year ends:
 
(Amounts in thousands)
  
2011
    
2010
  
             
Deferred tax assets:
            
  Inventory valuation reserves
   $ 966     $ 1,181  
  Allowance for doubtful accounts
     382       166  
  Inventory capitalization
     1,601       1,039  
  Environmental reserves
     229       335  
  Other
     430       212  
      Total deferred tax assets
     3,608       2,933  
Deferred tax liabilities:
                
  Tax over book depreciation and amortization
     2,908       2,555  
  Prepaid expenses
     582       183  
  Other
     44       -  
      Total deferred tax liabilities
     3,534       2,738  
Net deferred tax assets
   $ 74     $ 195  
 
Significant components of the provision for (benefit from) income taxes for continuing operations are as follows:
 
(Amounts in thousands)
  
2011
    
2010
    
2009
  
Current:
                  
  Federal
   $ 2,670     $ 2,039     $ 100  
  State
     162       193       133  
      Total current
     2,832       2,232       233  
Deferred:
                        
  Federal
     108       (148 )     (16 )
  State
     13       32       (84 )
      Total deferred
     121       (116 )     (100 )
Total
   $ 2,953     $ 2,116     $ 133  
 
The reconciliation of income tax computed at the U. S. federal statutory tax rates to income tax expense for continuing operations is:
 

(Amounts in thousands)
  
2011
    
2010
    
2009
  
   
Amount
    
%
    
Amount
    
%
    
Amount
    
%
  
Tax at U.S. statutory rates
   $ 2,975       34.0 %   $ 2,091       34.0 %   $ 120       34.0 %
State income taxes, net of
                                                
    Federal tax benefit
     133       1.5 %     148       2.4 %     14       4.0 %
Manufacturing exemption
     (162 )     (1.9 %)     (160 )     (2.6 %)     -       -  
Other, net
     7       0.1 %     37       0.6 %     (1 )     (0.1 %)
Total
   $ 2,953       33.7 %   $ 2,116       34.4 %   $ 133       37.9 %
 
Income tax payments of approximately $3,143,000, $1,659,000 and $2,039,000 were made in 2011, 2010 and 2009, respectively. The Company had South Carolina state net operating loss carryforwards of approximately $39,423,000 at December 31, 2011, which will expire between the years 2017 to 2030, and $39,179,000 at January 1, 2011. Since the likelihood of recognizing these carryforwards is remote, they have been fully reserved in the financial statements.
 
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2007 and substantially all material state and local income tax matters for years through 2005. The Company’s federal income tax return for 2007 was examined by the Internal Revenue Service in 2009 and federal income tax and interest liabilities resulting from this examination were not material. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accruals for uncertain tax positions including interest and penalties at the end of 2011 or 2010.