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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Components of the income tax expense are as follows (in thousands):
| Year ended December 31,
| 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |
Federal | $ | (1,314 | ) |  | $ | 442 |  |  | $ | 3,944 |
State | 675 |  |  | (85 | ) |  | 390 |
Foreign | 488 |  |  | (526 | ) |  | 1,841 |
Total current | (151 | ) |  | (169 | ) |  | 6,175 |
Deferred: |  |  |  |  |
Federal | 8,701 |  |  | 1,564 |  |  | (2,628 | )
State | 337 |  |  | (112 | ) |  | (63 | )
Foreign | (45 | ) |  | (46 | ) |  | (8 | )
Total deferred | 8,993 |  |  | 1,406 |  |  | (2,699 | )
Income tax expense | $ | 8,842 |  |  | $ | 1,237 |  |  | $ | 3,476 |
The components of (loss) income before income taxes are as follows (in thousands):
| Year ended December 31,
| 2017 |  | 2016 |  | 2015
United States | $ | (2,844 | ) |  | $ | 4,502 |  |  | $ | 4,760 |
Foreign | (1,367 | ) |  | (1,358 | ) |  | 5,874 |
(Loss) income before income taxes | $ | (4,211 | ) |  | $ | 3,144 |  |  | $ | 10,634 |
A reconciliation of the U.S. federal statutory tax rate to the effective income tax rate is as follows:
| Year ended December 31,
| 2017 |  | 2016 |  | 2015
Federal statutory tax rate | (35.0 | )% |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | 14.2 |  |  | (5.3 | ) |  | 2.0 |
Non-U.S. income taxed at different rates | 11.6 |  |  | 1.2 |  |  | (4.4 | )
Impact of 2017 Tax Cuts and Jobs Act | 173.6 |  |  | — |  |  | — |
Net operating loss carryback adjustment | — |  |  | 10.0 |  |  | 1.4 |
Reduction in tax benefit related to stock-based awards | 47.2 |  |  | — |  |  | — |
Non-deductible expenditures | 11.0 |  |  | 13.1 |  |  | 5.9 |
Research and development credit | (10.8 | ) |  | (12.7 | ) |  | (3.5 | )
Other | (1.8 | ) |  | (2.0 | ) |  | (3.7 | )
Effective income tax rate | 210.0 | % |  | 39.3 | % |  | 32.7 | %
Fluctuations in effective tax rates have historically been impacted by permanent tax differences with no associated income tax impact, changes in state apportionment factors, including the effect on state deferred tax assets and liabilities, and non-U.S. income taxed at different rates. Changes in the effective tax rate during 2017 included the Company implementing ASU No. 2016-09, which requires accounting for excess tax benefits and tax deficiencies related to stock-based awards as discrete items in the period in which they occur and the impact of the 2017 Tax Cuts and Jobs Act. Comprehensive tax reform legislation enacted in December 2017, commonly referred to as the Tax Cuts and Jobs Acts (“2017 Tax Act”), makes significant changes to U.S. federal income tax laws. The 2017 Tax Act, among other things, reduces the corporate income tax rate from 35% to 21%, partially limits the deductibility of business interest expense and net operating losses, provides additional limitations on the deductibility of executive compensation, imposes a one-time tax on unrepatriated earnings from certain foreign subsidiaries, taxes offshore earnings at reduced rates regardless of whether they are repatriated, and allows the immediate deduction of certain new investments instead of deductions for depreciation expense over time. The Company has not completed its determination of the 2017 Tax Act and recorded provisional amounts in its financial statements as of December 31, 2017. The Company recorded a provisional expense for the effects of the 2017 Tax Act of $7.3 million. The effects of the 2017 Tax Act on the Company include three main categories: 1) remeasurement of the net deferred tax assets from 35% to 21%, which resulted in tax expense of $5.5 million; 2) a one-time tax on unrepatriated earnings from certain foreign subsidiaries of $0.2 million; and 3) additional limitations on the deductibility of executive compensation, which resulted in tax expense of $1.6 million. The Company will continue to evaluate the 2017 Tax Act and adjust the provisional amounts as additional information is obtained. The ultimate impact of the 2017 Tax Act may differ from the provisional amounts recorded due to additional information becoming available, changes in interpretation of the 2017 Tax Act, and additional regulatory guidance that may be issued. Deferred income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the value reported for income tax purposes, at the enacted tax rates expected to be in effect when the differences reverse. The components of deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 24,569 |  |  | $ | 21,212 |
Allowance for doubtful accounts | 981 |  |  | 1,582 |
Inventory valuation reserves | 827 |  |  | 2,205 |
Equity compensation | 685 |  |  | 3,161 |
Goodwill | — |  |  | 10,788 |
Accrued compensation | 222 |  |  | 80 |
Foreign tax credit carryforward | 3,955 |  |  | 2,365 |
Other | — |  |  | 76 |
Total gross deferred tax assets | 31,239 |  |  | 41,469 |
Valuation allowance | (1,187 | ) |  | (1,053 | )
Total deferred tax assets, net | 30,052 |  |  | 40,416 |
Deferred tax liabilities: |  |  |
Property and equipment | (6,216 | ) |  | (7,264 | )
Intangible assets | (10,084 | ) |  | (13,375 | )
Goodwill | (365 | ) |  | — |
Convertible debt | (619 | ) |  | (2,010 | )
Unearned revenue | (52 | ) |  | (4,535 | )
Prepaid insurance and other | (3 | ) |  | (338 | )
Total gross deferred tax liabilities | (17,339 | ) |  | (27,522 | )
Net deferred tax assets | $ | 12,713 |  |  | $ | 12,894 |
As of December 31, 2017, the Company had U.S. net operating loss carryforwards of $103.8 million, expiring in various amounts in 2029 through 2036. The ability to utilize net operating losses and other tax attributes could be subject to a significant limitation if the Company were to undergo an “ownership change” for purposes of Section 382 of the Tax Code. During 2015, the Company’s corporate organizational structure required the filing of two separate consolidated U.S. Federal income tax returns. Taxable income of one group (“Group A”) could not be offset by tax attributes, including net operating losses of the other group (“Group B”). During the year ended December 31, 2015, the Company restructured its legal entities such that there is only one U.S. tax filing group filing a single U.S. consolidated federal income tax return beginning in 2016. The Company considers all available evidence, both positive and negative, to determine whether a valuation allowance is necessary for deferred tax assets. The Company considers cumulative losses in recent years as significant negative evidence. The Company considers recent years to mean the current year plus the two preceding years. No valuation allowance was recorded against the net federal deferred tax assets at December 31, 2017, based on the Company’s determination of its objectively verifiable estimate of future income. In determining this objectively verifiable future income, the Company considered income from the most recent three years adjusted for certain nonrecurring items such as discontinued operations and stock compensation that will be nondeductible under the 2017 Tax Act beginning in 2018. As of December 31, 2017, the Company maintains a valuation allowance of $1.2 million for deferred tax assets in certain state jurisdictions. The Company has not calculated U.S. taxes on unremitted earnings of certain non-U.S. subsidiaries due to the Company’s intent to reinvest the unremitted earnings of the non-U.S. subsidiaries. At December 31, 2017, the Company had approximately $1.5 million in unremitted earnings outside the U.S. which were not included for U.S. tax purposes. Due to the 2017 Tax Act, U.S. federal transition taxes have been recorded for a one-time U.S. tax liability on these earnings which have not previously been repatriated to the U.S. However, certain withholding taxes will need to be paid upon repatriation. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. The Company has performed an evaluation and concluded there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The evaluation was performed for the tax years which remain subject to examination by tax jurisdictions as of December 31, 2017, which are the years ended December 31, 2014 through December 31, 2017 for U.S. federal taxes and the years ended December 31, 2013 through December 31, 2017 for state tax jurisdictions. At December 31, 2017, the Company had no unrecognized tax benefits. In January 2017, the Internal Revenue Service notified the Company that it will examine the Company’s federal tax returns for the year ended December 31, 2014. No adjustments have been asserted and management believes that sustained adjustments, if any, would not have a material effect on the Company’s financial position, results of operations or liquidity.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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