XML 35 R18.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Income taxes | 12 Months Ended
--- | ---
Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income taxes | 12. Income taxes The expense (benefit) for income taxes for the years ended December 31, was as follows:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Current tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (446 | ) |  | $ | 5,650 |  |  | $ | 2,629 |
State |  |  | 55 |  |  |  | 1,448 |  |  |  | 955 |
|  |  | (391 | ) |  |  | 7,098 |  |  |  | 3,584 |
Deferred tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 345 |  |  |  | 3,050 |  |  |  | 967 |
State |  |  | (342 | ) |  |  | 665 |  |  |  | 208 |
|  |  | 3 |  |  |  | 3,715 |  |  |  | 1,175 |
Total tax (benefit) expense |  | $ | (388 | ) |  | $ | 10,813 |  |  | $ | 4,759 |
A reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory tax rate for the years ended December 31, was as follows:
|  | 2015 |  |  | 2014 |  |  | 2013 |
|  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |
Income tax expense (benefit) at federal statutory rate |  | $ | 4,862 |  |  |  | 35.0 | % |  | $ | 12,089 |  |  |  | 35.0 | % |  | $ | (4,760 | ) |  |  | 34.0 | %
State income tax, net of federal benefit |  |  | 178 |  |  |  | 1.3 |  |  |  | 1,403 |  |  |  | 4.0 |  |  |  | 848 |  |  |  | (6.1 | )
Non-deductible private placement warrant (income)/expense |  |  | (3,255 | ) |  |  | (23.4 | ) |  |  | (2,159 | ) |  |  | (6.2 | ) |  |  | 9,531 |  |  |  | (68.0 | )
Domestic production activity |  |  | — |  |  |  | — |  |  |  | (295 | ) |  |  | (0.9 | ) |  |  | (376 | ) |  |  | 2.7 |
Research tax credits |  |  | (2,437 | ) |  |  | (17.6 | ) |  |  | (1,001 | ) |  |  | (2.9 | ) |  |  | (1,054 | ) |  |  | 7.5 |
Tax reserve reassessment |  |  | 315 |  |  |  | 2.3 |  |  |  | 170 |  |  |  | 0.5 |  |  |  | 570 |  |  |  | (4.1 | )
Other, net |  |  | (51 | ) |  |  | (0.4 | ) |  |  | 606 |  |  |  | 1.8 |  |  |  | — |  |  |  | — |
Income tax expense (benefit) |  | $ | (388 | ) |  |  | (2.8 | )% |  | $ | 10,813 |  |  |  | 31.3 | % |  | $ | 4,759 |  |  |  | (34.0 | )%
The Company recognized pretax income of $13,890,000 which included $9,299,000 of permanently excludable income associated with the change in the valuation of the Company’s Private Placement Warrants for the year ended December 31, 2015. Excluding this income, the Company’s pre-tax income was $4,591,000 for the year ended December 31, 2015. The Company also recognized $6,169,000 of income in the year ended December 31, 2014, due to the change in the valuation of the Private Placement Warrants. Excluding this income the Company’s pretax income was $28,370,000 for the year ended December 31, 2014. The Company recognized expense of $28,031,000 in the year ended December 31, 2013, due to the change in the valuation of the Private Placement Warrants. Excluding this expense, the Company’s pre-tax income was $14,030,000 for the year ended December 31, 2013. Excluding the impact of the change in the valuation of the Private Placement Warrants, the Company’s effective income tax rates would have been (8.5)%, 38.1% and 33.9% for the years ended December 31, 2015, 2014, and 2013, respectively. The Company’s income tax expense for the year ended December 31, 2015, decreased principally due to the lower taxable income realized in 2015 as compared with 2014. On December 18, 2015, Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) was signed into law making the research tax credit permanent. The Company’s income tax expense for the year ended December 31, 2015 was favorably affected by the recognition of federal tax credits for 2015. Partially offsetting the increase in income tax expense for the year ended December 31, 2014 were research tax credits recorded in 2014, net of unrecognized tax benefits, arising from the one year extension of the federal research tax credit as well as continuing state research tax credits. The Company’s income tax expense recognized in 2013 was favorably affected by the recognition of federal research tax credits for 2012 and 2013. On January 2, 2013, the American Taxpayer Relief Act of 2012 (“Act”) was signed into law. Some of the provisions of the Act were retroactive to January 1, 2012, including the Research and Experimentation Credit, which, at the time, was extended through the end of 2013. Because a change in tax law is accounted for in the period of enactment, certain provisions of the Act benefiting the Company’s 2012 federal taxes, including R&D credit, were not recognized in the Company’s financial results until 2013. As the Act was signed into law in 2013, this federal research tax credit for the year ended December 31, 2012 of $413,000, along with the federal research tax credit estimated for 2013 of $641,000, were recorded in the Company’s financial results in the year ended December 31, 2013. The Company generates research tax credits as a result of its research & development activities which reduce the Company’s effective income tax rate. In general, these credits are general business credits and may be carried forward up to 20 years to be offset against future taxable income. Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and our effective tax rate in the future. Components of the deferred income tax assets and liabilities consisted of the following as of December 31:
|  | 2015 |  |  | 2014 |
Deferred tax assets |  |  |  |  |  |  |  |
Inventory |  | $ | 2,861 |  |  | $ | 2,143 |
Allowances and bad debts |  |  | 398 |  |  |  | 280 |
Accrued warranty |  |  | 778 |  |  |  | 1,022 |
Accrued wages and benefits |  |  | 627 |  |  |  | 553 |
Stock compensation |  |  | 488 |  |  |  | 391 |
Other |  |  | 515 |  |  |  | 8 |
Total deferred tax assets |  |  | 5,667 |  |  |  | 4,397 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Intangibles |  |  | (944 | ) |  |  | (1,810 | )
Tax depreciation in excess of book |  |  | (3,904 | ) |  |  | (1,830 | )
Total deferred tax liabilities |  |  | (4,848 | ) |  |  | (3,640 | )
Net deferred tax assets |  | $ | 819 |  |  | $ | 757 |
The Company’s net deferred tax assets and liabilities are presented as follows in the Company’s consolidated balance sheets as of December 31:
|  | 2015 |  |  | 2014 |
Current deferred tax assets, net |  | $ | — |  |  | $ | 3,998 |
Non-current deferred tax asset/(liabilities), net |  |  | 819 |  |  |  | (3,241 | )
Net deferred tax assets |  | $ | 819 |  |  | $ | 757 |
In November 2015, the FASB issued final guidance that requires companies to classify all deferred tax assets and liabilities as noncurrent on the consolidated balance sheet instead of separating deferred taxes into current and noncurrent amounts. Although the standard is effective for the Company for financial statements issued for annual periods beginning after December 15, 2016 and interim periods within those annual periods, the Company chose the early adoption provision of this standard as of the year ended December 31, 2015, and has prospectively classified all deferred tax assets and liabilities as noncurrent on its consolidated balance sheet in accordance with the standard. Prior year’s balances were not required to be retrospectively adjusted. The adoption of this guidance had no impact on the Company’s consolidated results of income. In preparing the Company’s consolidated financial statements, management has assessed the likelihood that its deferred income tax assets will be realized from future taxable income. In evaluating the ability to recover its deferred income tax assets, management considers all available evidence, positive and negative; including the Company’s operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction by jurisdiction basis. A valuation allowance is established if it is determined that it is more likely than not that some portion or all of the net deferred income tax assets will not be realized. Management exercises significant judgment in determining the Company’s provisions for income taxes, its deferred income tax assets and liabilities and its future taxable income for purposes of assessing its ability to utilize any future tax benefit from its deferred income tax assets. Although management believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to audit by tax authorities in the ordinary course of business. As of each reporting date management considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. As of December 31, 2015, management believes that is it more likely than not that all of the Company’s deferred income tax assets will be realized and no valuation allowance is required on its US deferred tax assets. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2015 and 2014, the amount accrued for interest and penalties was not material to the Company’s financial statements. The change in unrecognized tax benefits excluding interest and penalties for the years ended December 31, 2015 and 2014 were as follows:
|  | 2015 |  |  | 2014 |
Balance at beginning of year |  | $ | 723 |  |  | $ | 555 |
Additions based on tax positions related to the current year |  |  | 261 |  |  |  | 255 |
Additions/(Reductions) for tax positions of prior years |  |  | 44 |  |  |  | (87 | )
Balance at end of year |  | $ | 1,028 |  |  | $ | 723 |
As of December 31, 2015, management of the Company believes the liability for unrecognized tax benefits, excluding interest and penalties, could decrease by approximately $141,000 in 2016 due to lapses in the statute of limitations. Due to the various jurisdictions in which the Company files tax returns, it is possible that there could be other significant changes in the amount of unrecognized tax benefits in 2016, but the amount cannot be estimated.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration