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PROVISION FOR INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
PROVISION FOR INCOME TAXES [Text Block] | PROVISION FOR INCOME TAXES: Income Taxes The Company accounts for income taxes under the provisions of ASC 740, Income Taxes. Under the provisions of ASC 740, deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, utilizing the tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. U.S. and foreign components of income before income taxes were:
| Year Ended December 31,
(in thousands) | 2016 |  | 2015 |  | 2014
U.S. operations | $ | (880 | ) |  | $ | (2,113 | ) |  | $ | (5,064 | )
Foreign operations | 49,802 |  |  | 41,531 |  |  | 61,878 |
Total pretax income | $ | 48,922 |  |  | $ | 39,418 |  |  | $ | 56,814 |
The components of the provision for (benefit from) income taxes are as follows:
| Year Ended December 31,
(in thousands) | 2016 |  | 2015 |  | 2014
Current provision (benefit): |  |  |  |  |
Federal | $ | — |  |  | $ | 443 |  |  | $ | (1,234 | )
State | — |  |  | 83 |  |  | (137 | )
Foreign | 1,638 |  |  | 5,407 |  |  | 3,094 |
| 1,638 |  |  | 5,933 |  |  | 1,723 |
Deferred provision (benefit): |  |  |  |  |
Federal | (197 | ) |  | (1,699 | ) |  | (3,279 | )
State | (27 | ) |  | (57 | ) |  | (284 | )
Foreign | (382 | ) |  | (3,906 | ) |  | (890 | )
| (606 | ) |  | (5,662 | ) |  | (4,453 | )
Total | $ | 1,032 |  |  | $ | 271 |  |  | $ | (2,730 | )
The Company is entitled to a deduction for federal and state tax purposes with respect to employees' stock option activity. The net reduction in taxes otherwise payable in excess of any amount credited to income tax expense has been reflected as an adjustment to additional paid-in capital. For 2015 and 2014, the benefit (deficiency) arising from employee stock option activity that resulted in an adjustment to additional paid in capital was approximately $(0.2) million and $0.8 million, respectively. No adjustment was recorded in 2016. The provision for (benefit from) income taxes differs from the amount that would result by applying the applicable federal income tax rate to income before provision for (benefit from) income taxes, as follows:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
Provision computed at Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Business tax credits | (6.0 | ) |  | (6.8 | ) |  | (5.5 | )
Stock-based compensation | 2.2 |  |  | 0.8 |  |  | (2.9 | )
Foreign income taxed at different rate | (33.1 | ) |  | (33.1 | ) |  | (28.6 | )
IRS audit settlement | — |  |  | — |  |  | (5.8 | )
Valuation allowance | 1.8 |  |  | 2.6 |  |  | 2.0 |
Other | 2.2 |  |  | 2.2 |  |  | 1.0 |
Total | 2.1 | % |  | 0.7 | % |  | (4.8 | )%
The effective tax rate for the year ended December 31, 2016 was favorably impacted by the geographic distribution of the Company’s world-wide earnings in lower-tax jurisdictions. Additionally, the rate was favorably impacted by the federal R&D tax credit which was extended permanently when the Protecting Americans from Tax Hikes Act was signed into law on December 18, 2015. The Company reached a settlement with the IRS in the quarter ended June 30, 2014, to close out the examination of its federal income tax returns for the years 2007 through 2009. As a result, the Company adjusted its tax balances and the provision for income tax for the year ended December 31, 2014, includes a one-time benefit of $3.3 million comprising $2.8 million in federal income taxes and interest, and state income taxes of approximately $0.5 million. The one-time benefit includes the reversal of $4.1 million of related unrecognized tax benefits that had been recorded as non-current liabilities in the Company’s consolidated balance sheets. The Company has now concluded all U.S. federal income tax matters for the years through 2009. The components of the net deferred income tax asset (liabilities) were as follows:
| December 31,
(in thousands) | 2016 |  | 2015
Deferred tax assets: |  |  |
Other reserves and accruals | $ | 1,880 |  |  | $ | 1,573 |
Tax credit carry-forwards | 26,895 |  |  | 22,826 |
Stock compensation | 5,760 |  |  | 5,945 |
Capital losses | 10,585 |  |  | 11,490 |
Net operating loss | 2,671 |  |  | 3,677 |
Other | 174 |  |  | — |
Valuation allowance | (27,489 | ) |  | (26,918 | )
| 20,476 |  |  | 18,593 |
Deferred tax liabilities: |  |  |
Depreciation | (2,322 | ) |  | (2,968 | )
Unremitted earnings | (7,019 | ) |  | (4,626 | )
Other | — |  |  | (447 | )
| (9,341 | ) |  | (8,041 | )
Net deferred tax asset | $ | 11,135 |  |  | $ | 10,552 |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income. In the event that the Company determines, based on available evidence and management judgment, that all or part of the net deferred tax assets will not be realized in the future, the Company would record a valuation allowance in the period the determination is made. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with the Company’s expectations could have a material impact on its results of operations and financial position. As of December 31, 2016, the Company continues to maintain a valuation allowance primarily as a result of capital losses for federal purposes, and on its California deferred tax assets as the Company believes that it is not more likely than not that the deferred tax assets will be fully realized. In addition, the Company maintains a valuation allowance with respect to certain of its deferred tax assets relating to tax credits in Canada and the state of New Jersey. As of December 31, 2016, the Company had federal research and development tax credit carry-forwards of approximately $14.9 million, which will begin to expire in 2030 if unutilized; federal net operating losses of $31.3 million, which will begin to expire in 2024 if unutilized; California research and development tax credit carry-forwards of approximately $18.7 million (there is no expiration of research and development tax credit carry-forwards for the state of California) and California net operating losses of $45.5 million which will begin to expire in 2032. As of December 31, 2016, the Company had Canadian scientific research and experimental development tax credit carry-forwards of approximately $2.1 million and New Jersey research and experimental development tax credit carry-forwards of approximately $0.7 million, which will start to expire in 2026 and 2027, respectively. The Company does not provide for U.S. taxes on its undistributed earnings of foreign subsidiaries that it intends to invest indefinitely outside the U.S., unless such taxes are otherwise required under U.S. tax law. Beginning in 2013, the Company determined that a portion of its foreign subsidiaries current and future earnings may be remitted prospectively to the U.S. for domestic cash flow purposes and, accordingly, provided for the related U.S. taxes in its consolidated financial statements. If the Company changes its intent to invest its undistributed foreign earnings indefinitely or if a greater amount of undistributed earnings are needed for U.S. operations than previously anticipated and for which U.S. taxes have not been recorded, the Company would be required to accrue or pay U.S. taxes (subject to an adjustment for foreign tax credits, where applicable) and withholding taxes payable to various foreign countries on some or all of these undistributed earnings. As of December 31, 2016, the Company had undistributed earnings of foreign subsidiaries that are indefinitely invested outside of the U.S. of approximately $265.0 million. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be distributed. Unrecognized Tax Benefits The Company applies the provisions of ASC 740-10, relating to accounting for uncertain income taxes. Reconciliation of the beginning and ending amount of unrecognized tax benefits:
(in thousands) | Unrecognized Tax Benefits
Unrecognized Tax Benefits Balance at January 1, 2014 | $ | 12,694 |
Gross Increases for Tax Positions of Current Year | 2,117 |
Gross Increases for Tax Positions of Prior Years | 710 |
Settlements | (4,361 | )
Lapse of Statute of Limitations | — |
Unrecognized Tax Benefits Balance at December 31, 2014 | 11,160 |
Gross Increases for Tax Positions of Current Year | 3,063 |
Gross Decrease for Tax Positions of Prior Years | (663 | )
Settlements | — |
Lapse of Statute of Limitations | — |
Unrecognized Tax Benefits Balance at December 31, 2015 | 13,560 |
Gross Increases for Tax Positions of Current Year | 1,856 |
Gross Decreases for Tax Positions of Prior Years | (23 | )
Settlements | — |
Lapse of Statute of Limitations | — |
Unrecognized Tax Benefits Balance at December 31, 2016 | $ | 15,393 |
The Company's total unrecognized tax benefits as of December 31, 2016, 2015 and 2014, were $15.4 million, $13.6 million and $11.2 million, respectively. An income tax benefit of $9.3 million, net of valuation allowance adjustments, would be recorded if these unrecognized tax benefits are recognized. The Company cannot reasonably estimate the amount of the unrecognized tax benefit that could be adjusted in the next twelve months. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had accrued interest and penalties of $0.1 million as of both December 31, 2016, and December 31, 2015, which have been recorded in long-term income taxes payable in the accompanying Consolidated Balance Sheets. As of December 31, 2016, the Company has concluded all U.S. federal income tax matters for the years through 2012. However, due to tax attributes, the IRS may calculate tax adjustments for subsequent years for positions taken prior to 2012. The Company has finalized Swiss income tax returns for the years through 2012. There is currently no pending income tax audit. On July 27, 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was issued by the Tax Court in December 2015. In February 2016, the Commissioner appealed the Tax Court decision. At this time, the U.S. Department of the Treasury has not withdrawn the requirement to include stock-based compensation expense from IRS cost-sharing regulations. The Company has reviewed this case and its impact and concluded that no adjustment to the consolidated financial statements is appropriate at this time. The Company will continue to monitor ongoing developments and potential impacts to the consolidated financial statements.

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- 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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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