Ascent Industries Co. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Significant components of the Company’s deferred tax liabilities and assets

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)	2015			2014
Deferred tax assets:
Inventory valuation reserves	$	699		$	303
Allowance for doubtful accounts	61			85
Inventory capitalization	1,692			1,504
Environmental reserves	175			206
Interest rate swap	41			41
Warranty accrual	88			23
Deferred compensation	64			93
Accrued bonus	338			739
Accrued expenses	1,403			568
State net operating loss carryforwards	1,616			1,776
Other	423			371
Total deferred tax assets	6,600			5,709
Valuation allowance	(1,694		)	(1,570		)
Total net deferred tax assets	4,906			4,139
Deferred tax liabilities:
Tax over book depreciation and amortization	7,609			6,804
Prepaid expenses	312			825
Other	2			26
Total deferred tax liabilities	7,923			7,655
Net deferred tax liabilities	$	(3,017	)	$	(3,516	)

Significant components of the provision for (benefit from) income taxes for continuing operations

Significant components of the provision for income taxes from continuing operations are as follows:



(Amounts in thousands)	2015			2014			2013
Current:
Federal	$	1,414		$	3,933		$	2,192
State	235			656			344
Total current	1,649			4,589			2,536
Deferred:
Federal	(48		)	964			(1,113		)
State	198			(167		)	(213		)
Total deferred	150			797			(1,326		)
Total	$	1,799		$	5,386		$	1,210

Reconciliation of income tax computed at the U. S. federal statutory tax rates to income tax expense for continuing operations

The reconciliation of income tax computed at the U. S. federal statutory tax rates to income tax expense is:



(Amounts in thousands)	2015					2014					2013
(Amounts in thousands)	Amount			%		Amount			%		Amount			%
Tax at U.S. statutory rates	$	(2,881	)	34.0	%	$	6,302		35.0	%	$	1,397		34.0	%
State income taxes, net of federal tax benefit	285			(3.4	)%	324			1.8	%	74			1.8	%
State valuation allowance	94			(1.1	)%	—			—	%	—			—	%
Earn-out adjustments	(857		)	10.1	%	(1,217		)	(6.8	)%	—			—	%
Bargain gain on CRI acquisition	—			—	%	—			—	%	(366		)	(8.9	)%
Manufacturing exemption	(188		)	2.2	%	(458		)	(2.5	)%	(138		)	(3.4	)%
Stock issuance costs	—			—	%	—			—	%	101			2.5	%
Stock option compensation	95			(1.1	)%	91			0.5	%	85			2.1	%
Uncertain tax positions	(139		)	1.6	%	139			0.8	%	—			—	%
Goodwill impairment	5,405			(63.8	)%	—			—	%	—			—	%
Other, net	(15		)	0.2	%	205			1.1	%	57			1.4	%
Total	$	1,799		(21.2	)%	$	5,386		29.9	%	$	1,210		29.5	%

Schedule of the Company's uncertain tax positions

Provided below is a roll forward of the Company's uncertain tax positions.



(Amounts in thousands)		Unrecognized Tax Benefit			Interest and Penalties			Total
(Amounts in thousands)		Unrecognized Tax Benefit			Interest and Penalties			Total
Balance at December 28, 2013		$	—		$	—		$	—
	Increases related to prior year tax positions	1,431			73			1,504
	Decreases related to prior year tax positions	—			—			—
	Increases related to current year tax position	—			—			—
	Settlements during period	—			—			—
	Lapse of statute of limitations	—			—			—
Balance at January 3, 2015		1,431			73			1,504
	Increases related to prior year tax positions	—			—			—
	Decreases related to prior year tax positions	(1,431		)	(73		)	(1,504		)
	Increases related to current year tax position	—			—			—
	Settlements during period	—			—			—
	Lapse of statute of limitations	—			—			—
Balance at December 31, 2015		$	—		$	—		$	—