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, 2016

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)	2016			2015
Deferred tax assets:
Sale leaseback deferred gain	$	2,387		$	—
Inventory valuation reserves	379			699
Allowance for doubtful accounts	29			61
Inventory capitalization	1,781			1,692
Environmental reserves	199			175
Interest rate swap	15			41
Warranty accrual	62			88
Deferred compensation	61			64
Accrued bonus	337			338
Accrued expenses	78			1,403
State net operating loss carryforwards	1,725			1,616
Other	389			423
Total deferred tax assets	7,442			6,600
Valuation allowance	(1,790		)	(1,694		)
Total net deferred tax assets	5,652			4,906
Deferred tax liabilities:
Tax over book depreciation and amortization	6,947			7,609
Prepaid expenses	211			312
Other	103			2
Total deferred tax liabilities	7,261			7,923
Net deferred tax liabilities	$	(1,609	)	$	(3,017	)

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)	2016			2015			2014
Current:
Federal	$	(981	)	$	1,414		$	3,933
State	191			235			656
Total current	(790		)	1,649			4,589
Deferred:
Federal	(1,329		)	(48		)	964
State	(79		)	198			(167		)
Total deferred	(1,408		)	150			797
Total	$	(2,198	)	$	1,799		$	5,386

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)	2016					2015					2014
(Amounts in thousands)	Amount			%		Amount			%		Amount			%
Tax at U.S. statutory rates	$	(3,125	)	34.0	%	$	(2,881	)	34.0	%	$	6,302		35.0	%
State income taxes, net of federal tax benefit	(49		)	0.5	%	285			(3.4	)%	324			1.8	%
State valuation allowance	96			(1.0	)%	94			(1.1	)%	—			—	%
Life insurance cash surrender value	504			(5.5	)%	—			—	%	—			—	%
Earn-out adjustments	—			—	%	(857		)	10.1	%	(1,217		)	(6.8	)%
Manufacturing exemption	—			—	%	(188		)	2.2	%	(458		)	(2.5	)%
Stock option compensation	46			(0.5	)%	95			(1.1	)%	91			0.5	%
Uncertain tax positions	—			—	%	(139		)	1.6	%	139			0.8	%
Goodwill impairment	—			—	%	5,405			(63.8	)%	—			—	%
Other, net	330			(3.6	)%	(15		)	0.2	%	205			1.1	%
Total	$	(2,198	)	23.9	%	$	1,799		(21.3	)%	$	5,386		29.9	%

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 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		—			—			—
	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 31, 2016		$	—		$	—		$	—