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

Jan. 03, 2015

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

Significant components of the Company's deferred tax liabilities and assets are as follows at the respective year ends:



(Amounts in thousands)	2014			2013
Deferred tax assets:
Inventory valuation reserves	$	303		$	794
Allowance for doubtful accounts	85			100
Inventory capitalization	1,504			3,089
Environmental reserves	206			224
Interest rate swap	41			128
Back charge accrual	23			203
Deferred compensation	93			97
Accrued bonus	739			—
Facility closing reserves	568			—
State net operating loss carryforwards	206			142
Other	370			253
Total deferred tax assets	4,138			5,030
Deferred tax liabilities:
Tax over book depreciation and amortization	6,804			8,021
Prepaid expenses	825			749
Other	26			57
Total deferred tax liabilities	7,655			8,827
Net deferred tax liabilities	$	(3,517	)	$	(3,797	)

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)	2014			2013			2012
Current:
Federal	$	3,933		$	2,192		$	1,493
State	656			344			236
Total current	4,589			2,536			1,729
Deferred:
Federal	964			(1,113		)	250
State	(167		)	(213		)	(85		)
Total deferred	797			(1,326		)	165
Total	$	5,386		$	1,210		$	1,894

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)	2014					2013					2012
(Amounts in thousands)	Amount			%		Amount			%		Amount			%
Tax at U.S. statutory rates	$	6,302		35.0	%	$	1,397		34.0	%	$	1,998		34.0	%
State income taxes, net of federal tax benefit	324			1.8	%	74			1.8	%	106			1.8	%
Palmer earn-out adjustment	(1,217		)	(6.8	)%	—			—	%	—			—	%
Bargain gain on CRI acquisition	—			—	%	(366		)	(8.9	)%	—			—	%
Manufacturing exemption	(458		)	(2.5	)%	(138		)	(3.4	)%	(180		)	(3.1	)%
Stock issuance costs	—			—	%	101			2.5	%	—			—	%
Stock option compensation	91			0.5	%	85			2.1	%	38			0.6	%
Uncertain tax positions	139			0.8	%	—			—	%	—			—	%
Other, net	205			1.1	%	57			1.4	%	(68		)	(1.1	)%
Total	$	5,386		29.9	%	$	1,210		29.5	%	$	1,894		32.2	%

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 29, 2012		—	—	—
	Increases related to prior year tax positions	—	—	—
	Decreases related to prior year tax positions	—	—	—
	Increases related to current year tax position	—	—	—
	Settlements during period	—	—	—
	Lapse of statute of limitations	—	—	—
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

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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