Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.8
Income Taxes
 12 Months Ended
Dec. 28, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
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)
2013
 
2012
Deferred tax assets:
 
 
 
Inventory valuation reserves
$
794

 
$
853

Allowance for doubtful accounts
100

 
162

Inventory capitalization
3,089

 
2,239

Environmental reserves
224

 
229

Interest rate swap
128

 
116

Back charge accrual
203

 
72

Deferred compensation
97

 
120

State net operating loss carryforwards
142

 
66

Other
253

 
278

Total deferred tax assets
5,030

 
4,135

Deferred tax liabilities:
 

 
 

Tax over book depreciation and amortization
8,021

 
8,046

Prepaid expenses
749

 
663

Other
57

 
90

Total deferred tax liabilities
8,827

 
8,799

Net deferred tax liabilities
$
(3,797
)
 
$
(4,664
)
 

Significant components of the provision for income taxes are as follows:
(Amounts in thousands)
2013
 
2012
 
2011
Current:
 
 
 
 
 
Federal
$
1,689

 
$
1,771

 
$
2,670

State
176

 
281

 
162

Total current
1,865

 
2,052

 
2,832

Deferred:
 

 
 

 
 

Federal
(1,321
)
 
114

 
108

State
(146
)
 
(60
)
 
13

Total deferred
(1,467
)
 
54

 
121

Total
$
398

 
$
2,106

 
$
2,953


The reconciliation of income tax computed at the U. S. federal statutory tax rates to income tax expense is:
 
2013
 
2012
 
2011
(Amounts in thousands)
Amount
 
%
 
Amount
 
%
 
Amount
 
%
Tax at U.S. statutory rates
$
734

 
34.0
 %
 
$
2,156

 
34.0
 %
 
$
2,975

 
34.0
 %
State income taxes, net of federal tax benefit
(23
)
 
(1.1
)%
 
118

 
1.9
 %
 
133

 
1.5
 %
Bargain gain on CRI acquisition
(366
)
 
(17.0
)%
 
—

 
—
 %
 
—

 
—
 %
Manufacturing exemption
(138
)
 
(6.4
)%
 
(180
)
 
(2.8
)%
 
(162
)
 
(1.9
)%
Stock issuance costs
101

 
4.7
 %
 
—

 
—
 %
 
—

 
—
 %
Stock option compensation
85

 
3.9
 %
 
38

 
0.6
 %
 
38

 
0.4
 %
Other, net
5

 
0.3
 %
 
(26
)
 
(0.5
)%
 
(31
)
 
(0.3
)%
Total
$
398

 
18.4
 %
 
$
2,106

 
33.2
 %
 
$
2,953

 
33.7
 %
 
Income tax payments of approximately $2,393,000, $2,112,000 and $3,143,000 were made in 2013, 2012 and 2011, respectively. The Company had state net operating loss carryforwards of approximately $45,503,000 at December 28, 2013, which will expire between the years 2017 to 2032, and $43,143,000 at December 29, 2012. Since the likelihood of recognizing the tax effect of these carryforwards is remote, they have not been recognized in the consolidated 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 is no longer subject to U.S. federal or state income tax examinations for years before 2009. 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 the provision for income taxes. The Company had no accruals for uncertain tax positions including interest and penalties at the end of 2013 or 2012.