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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes | 8. Income Taxes The (benefit) provision for income taxes consists of the following for the fiscal years indicated:
|  | Fiscal Year |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 150,000 |  |  | $ | 141,000 |  |  | $ | 251,000 |
State |  |  | 242,000 |  |  |  | 231,000 |  |  |  | 468,000 |
Foreign |  |  | 333,000 |  |  |  | (120,000 | ) |  |  | (29,000 | )
Total current provision |  |  | 725,000 |  |  |  | 252,000 |  |  |  | 690,000 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 3,977,000 |  |  |  | 10,253,000 |  |  |  | 6,532,000 |
State |  |  | (30,000 | ) |  |  | 513,000 |  |  |  | 1,414,000 |
Foreign |  |  | (467,000 | ) |  |  | (700,000 | ) |  |  | (100,000 | )
Change in valuation allowance |  |  | (7,746,000 | ) |  |  | (10,066,000 | ) |  |  | (7,846,000 | )
Total deferred provision |  |  | (4,266,000 | ) |  |  | — |  |  |  | — |
Total (benefit) provision for income taxes |  | $ | (3,541,000 | ) |  | $ | 252,000 |  |  | $ | 690,000 |
Net operating losses utilized in 2011, 2010 and 2009 to offset federal and state taxes were $2,698,000, $2,743,000 and $6,923,000, respectively. The actual income tax (benefit) provision reported from operations are different than those which would have been computed by applying the federal statutory tax rate to loss before income tax benefit. A reconciliation of income tax benefit as computed at the U.S. federal statutory income tax rate to the provision for income tax benefit is as follows:
|  | Fiscal Year |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Tax provision at federal statutory rates |  | $ | 355,000 |  |  | $ | 3,212,000 |  |  | $ | 6,817,000 |
State tax liability |  |  | 158,000 |  |  |  | 150,000 |  |  |  | 1,718,000 |
Foreign deferred |  |  | 663,000 |  |  |  | (203,000 | ) |  |  | 10,000 |
Goodwill |  |  | 771,000 |  |  |  | — |  |  |  | — |
Nondeductible expenses |  |  | 415,000 |  |  |  | (35,000 | ) |  |  | (40,000 | )
Utilized/expired net state operating loss carryforwards |  |  | — |  |  |  | (28,000 | ) |  |  | (134,000 | )
Provision to tax return adjustments and state tax rate change |  |  | 1,191,000 |  |  |  | 544,000 |  |  |  | (1,432,000 | )
Tax credits |  |  | (858,000 | ) |  |  | (312,000 | ) |  |  | (636,000 | )
Non-deductible equity compensation |  |  | 1,542,000 |  |  |  | 2,630,000 |  |  |  | 3,882,000 |
Other, net |  |  | (32,000 | ) |  |  | (47,000 | ) |  |  | (1,649,000 | )
Change in valuation allowance |  |  | (7,746,000 | ) |  |  | (5,659,000 | ) |  |  | (7,846,000 | )
|  | $ | (3,541,000 | ) |  | $ | 252,000 |  |  | $ | 690,000 |
Pretax foreign (losses) earnings were approximately $(4,559,000), 237,000 and ($401,000) for fiscal years 2011, 2010 and 2009, respectively. The Company has not received remittance of any earnings from its foreign operations nor does it intend to in the foreseeable future. Accordingly, U.S. income taxes were not provided for approximately $10.2 million of undistributed earnings of the Company’s Korean subsidiary and $6.5 million of undistributed earnings of the Company’s Taiwan subsidiary. Deferred taxes are provided to recognize the effect of temporary differences between tax and financial reporting. Deferred income tax assets and liabilities consist of the following:
|  | Fiscal Year |
|  | 2011 |  |  | 2010 |
Deferred tax liability: |  |  |  |  |  |  |  |
Intangible asset |  | $ | (508,000 | ) |  |  | — |
Deferred tax assets: |  |  |  |  |  |  |  |
Federal net operating loss carryforwards |  |  | 3,398,000 |  |  |  | 6,137,000 |
State net operating loss carryforwards |  |  | 13,000 |  |  |  | — |
Foreign net operating loss carryforwards |  |  | 5,533,000 |  |  |  | 4,080,000 |
Equity awards |  |  | 886,000 |  |  |  | 2,491,000 |
Tax credits |  |  | 5,599,000 |  |  |  | 4,576,000 |
Equipment |  |  | 5,068,000 |  |  |  | 5,300,000 |
Investments |  |  | 3,867,000 |  |  |  | 3,818,000 |
Other |  |  | 3,903,000 |  |  |  | 4,342,000 |
Net deferred tax assets |  |  | 27,759,000 |  |  |  | 30,744,000 |
Valuation allowance |  |  | (23,493,000 | ) |  |  | (30,744,000 | )
|  | $ | 4,266,000 |  |  | $ | — |
As of December 31, 2011, the Company has available for tax purposes federal net operating loss carryforwards (NOLs) of $9.7 million expiring through 2021. The Company has recognized a full valuation allowance on its net deferred tax assets excluding the net deferred tax assets of KTC, as the Company has concluded that such assets are not more likely than not to be realized. Based upon KTC’s 2011 results of operations and 2012 projected results of operations the Company concluded that it was more likely than not that the benefit of the net deferred tax assets would be realized and removed the valuation allowance. The $7.7 million decrease in valuation allowance during fiscal year 2011 was due to the reversal of the $4.9 million KTC valuation allowance partially offset by a net decrease in deferred tax assets of approximately $1.7 million and utilization of net operating losses of $1.1 million. The change in valuation allowance during fiscal year 2010 was due to a net decrease in deferred tax assets of approximately $2.5 million and utilization of net operating losses of $3.1 million. The Company has not historically recorded, nor does it intend to record the tax benefits from stock awards until realized. Unrecorded benefits from stock awards approximated $12.9 million at December 31, 2011. The Company’s income tax returns have not been examined by the Internal Revenue Service and are subject to examination for all years since 2002. State income tax returns are generally subject to examination for a period of 3 to 5 years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. International jurisdictions have statutes of limitations generally ranging from 3 to 7 years after filing of the respective return. Years still open to examination by tax authorities in major jurisdictions include Korea (2006 onward), Japan (2006 onward), Hong Kong (2008 onward) and Taiwan (2010 onward) and UK returns (2011 onwards). The Company is not currently under examination in these jurisdictions.

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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 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
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