XML 33 R17.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the pretax loss from operations for the years ended December 31, 2015, 2014 and 2013 are as follows (in thousands):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
U.S. Domestic | $ | (90,342 | ) |  | $ | (8,106 | ) |  | $ | (9,264 | )
Foreign | (87,653 | ) |  | (3,689 | ) |  | (69,784 | )
Pretax loss from operations | $ | (177,995 | ) |  | $ | (11,795 | ) |  | $ | (79,048 | )
The components of the provision for income taxes are presented in the following table (in thousands):
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
Current income tax expense (benefit): |  |  |  |  |
Federal | $ | 221 |  |  | $ | — |  |  | $ | (21 | )
State | 149 |  |  | 145 |  |  | 186 |
Foreign | 634 |  |  | 526 |  |  | 2,525 |
Total current | 1,004 |  |  | 671 |  |  | 2,690 |
Deferred income tax (benefit) expense: |  |  |  |  |
Federal | (1,363 | ) |  | 238 |  |  | 229 |
State | (154 | ) |  | 24 |  |  | 15 |
Foreign | 1,194 |  |  | 154 |  |  | 245 |
Total deferred | (323 | ) |  | 416 |  |  | 489 |
Total income tax expense | $ | 681 |  |  | $ | 1,087 |  |  | $ | 3,179 |
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income as a result of the following differences:
| December 31,
| 2015 |  | 2014 |  | 2013
Federal statutory rate | (35.0 | )% |  | (35.0 | )% |  | (35.0 | )%
Adjustments for tax effects of: |  |  |  |  |
State taxes, net | (0.3 | ) |  | (1.1 | ) |  | (0.1 | )
Stock-based compensation | 0.3 |  |  | 6.2 |  |  | 0.5 |
Foreign taxes | 0.2 |  |  | 3.4 |  |  | 1.1 |
Tax credits | (0.3 | ) |  | (3.3 | ) |  | (0.4 | )
Deemed foreign dividend | 0.1 |  |  | — |  |  | — |
Fair market value adjustments | (1.6 | ) |  | (7.6 | ) |  | — |
Intercompany debt forgiveness and other permanent adjustments | 0.6 |  |  | 3.1 |  |  | 9.5 |
Goodwill impairment | 29.1 |  |  | — |  |  | — |
Tax rate adjustment | 0.4 |  |  | 0.4 |  |  | 0.2 |
Uncertain tax positions | (0.1 | ) |  | 5.3 |  |  | 2.7 |
Other | 3.1 |  |  | 0.2 |  |  | (0.4 | )
Valuation allowance | 3.8 |  |  | 37.5 |  |  | 25.9 |
Effective income tax rate | 0.3 | % |  | 9.1 | % |  | 4.0 | %
The 2015 provision for income taxes primarily consists of goodwill impairment, an increase in unrecognized tax benefits associated with the European operations, tax expense related to non-income based state tax in the U.S., an increase in the valuation allowance for Japanese deferred tax assets and current year income in Japan and Brazil. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows (in thousands):
| December 31,
| 2015 |  | 2014
Deferred tax assets: |  |  |
Allowances and reserves | $ | 955 |  |  | $ | 818 |
Accrued expenses | 2,331 |  |  | 3,674 |
Inventory reserves | 9,631 |  |  | 8,532 |
Net operating loss carryforwards | 43,427 |  |  | 41,965 |
Property and equipment | 2,420 |  |  | 1,976 |
Stock-based compensation | 2,377 |  |  | 2,168 |
Legal settlement | 11,806 |  |  | 1,204 |
Goodwill | 3,362 |  |  | — |
Income tax credit carryforwards | 3,235 |  |  | 2,218 |
Total deferred tax assets | 79,544 |  |  | 62,555 |
Valuation allowance | (63,612 | ) |  | (58,781 | )
Total deferred tax assets, net of valuation allowance | 15,932 |  |  | 3,774 |
Deferred tax liabilities: |  |  |
Investment in foreign partnership | 15,467 |  |  | — |
Intangible assets | 465 |  |  | 2,881 |
Goodwill | — |  |  | 1,518 |
Total deferred tax liabilities | 15,932 |  |  | 4,399 |
Net deferred tax assets (liabilities) | $ | — |  |  | $ | (625 | )
The realization of deferred tax assets is dependent on the Company’s ability to generate sufficient taxable income in future years in the associated jurisdiction to which the deferred tax assets relate. As of December 31, 2015, a valuation allowance of $63.6 million has been established against the net deferred tax assets as realization is uncertain. The deferred tax liabilities consist primarily of the excess of the book value over the tax basis of their investment in the foreign partnership. In determining the need for a valuation allowance the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based on the review of all positive and negative evidence, including a three year cumulative pre-tax loss, the Company determined that a full valuation allowance should be recorded against all deferred tax assets at December 31, 2015. At December 31, 2015, the Company has unrecognized tax benefits of $10.4 million of which $8.9 million will affect the effective tax rate if recognized when the Company no longer has a valuation allowance offsetting its deferred tax assets. The following table summarizes the changes to unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013 (in thousands):
| Year ended December 31,
| 2015 |  | 2014 |  | 2013
Unrecognized tax benefit at the beginning of the year | 8,861 |  |  | 7,835 |  |  | 5,897 |
Additions based on tax positions related to the current year | 859 |  |  | 1,050 |  |  | 1,664 |
Additions based on tax positions related to the prior year | 1,144 |  |  | 391 |  |  | 221 |
Reductions as a result of lapse of applicable statute of limitations | (76 | ) |  | (40 | ) |  | (20 | )
Reductions as a result of foreign exchange rates and other | (429 | ) |  | (375 | ) |  | 73 |
Unrecognized tax benefits at the end of the year | $ | 10,359 |  |  | $ | 8,861 |  |  | $ | 7,835 |
The Company believes it is reasonably possible it will not materially reduce its unrecognized tax benefits within the next 12 months. The Company and its subsidiaries are subject to federal income tax as well as income tax of multiple state and foreign jurisdictions. With few exceptions, the Company is no longer subject to income tax examination by tax authorities in major jurisdictions for years prior to 2010. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and tax credits were generated and carried forward, and make adjustments up to the amount of the carryforwards. The Company is not currently under examination by the Internal Revenue Service, foreign or state and local tax authorities. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. As of December 31, 2015, accrued interest and penalties were $1.2 million, which primarily relates to the uncertain tax positions of the Scient’x operations. During 2015, there was an increase of $0.1 million in the accrued interest and penalties related to the uncertain tax positions of the Scient’x operations. At December 31, 2015, the Company had federal and state net operating loss carryforwards of $91.1 million and $90.4 million, respectively, expiring at various dates through 2035. At December 31, 2015, the Company had federal and state research and development tax credits of $3.3 million and $3.0 million, respectively. The federal research and development tax credits expire at various dates through 2035, while the state credits do not expire. The Company had foreign net operating loss carryforwards of $37.6 million beginning to expire in 2018. Utilization of the net operating loss and tax credit carryforwards may become subject to annual limitations due to ownership change limitations that could occur in the future as provided by Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of the net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income. The Company does not record U.S. income taxes on the undistributed earnings of its foreign subsidiaries based upon the Company’s intention to permanently reinvest undistributed earnings to ensure sufficient working capital and further expansion of existing operations outside the United States. The undistributed earnings of the foreign subsidiaries as of December 31, 2015 are immaterial. In the event the Company is required to repatriate funds from outside of the United States, such repatriation would be subject to local laws, customs, and tax consequences. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. Under current GAAP, in a classified statement of financial position, deferred tax assets and liabilities are separated into a current amount and a non-current amount on the basis of the classification of the related asset or liability for financial reporting. Deferred tax assets and liabilities that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. On November 20, 2015, the FASB issued Accounting Standards Update 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes which requires noncurrent classification of all deferred tax assets and liabilities for all public entities for annual periods beginning after December 15, 2016. Accounting Standards Update 2015-17 also provides for early adoption for all entities as of the beginning of an annual period. For the year ended December 31, 2015, the Company has elected to early adopt Accounting Standards Update 2015-17 and presents all of its deferred tax assets and liabilities as non-current for the period ended December 31, 2015. The Company has applied the Standard on a prospective basis. Therefore, the classification of deferred tax assets and liabilities in periods prior to the period ended December 31, 2015 has not been changed from the original presentation.

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