XML 58 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Consolidated income before taxes for domestic and foreign operations consisted of the following:
| Year ended December 31,
| 2012 |  | 2011
Domestic | $ | 42,990 |  |  | $ | 10,318 |
Foreign | (435 | ) |  | 278 |
Total | $ | 42,555 |  |  | $ | 10,596 |
The Company's (provision) for income taxes consisted of the following:
| Year ended December 31,
| 2012 |  | 2011
Current: |  |  |
Federal | $ | (16,910 | ) |  | $ | (2,106 | )
State | (381 | ) |  | (99 | )
Foreign | (74 | ) |  | (46 | )
Total current | (17,365 | ) |  | (2,251 | )
Deferred: |  |  |
Federal | 455 |  |  | (1,271 | )
State | 46 |  |  | (23 | )
Foreign | 160 |  |  | — |
| 661 |  |  | (1,294 | )
Change in valuation allowance | 796 |  |  | (122 | )
Total deferred | 1,457 |  |  | (1,416 | )
(Provision) for income taxes | $ | (15,908 | ) |  | $ | (3,667 | )
The income tax (provision) differs from that computed at the federal statutory corporate income tax rate as follows:
| Year ended December 31,
| 2012 |  | 2011
Tax (provision) at Federal statutory rate | $ | (14,894 | ) |  | $ | (3,603 | )
State income tax (provision), net of federal benefit | (1,476 | ) |  | (162 | )
Research and development tax credits | 357 |  |  | 316 |
Foreign earnings or losses taxed at different rates | (136 | ) |  | 48 |
Other | (555 | ) |  | (266 | )
Change in valuation allowance | 796 |  |  | — |
Tax (provision) | $ | (15,908 | ) |  | $ | (3,667 | )
The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following:
| As of December 31, 2012 |  | As of December 31, 2011
| Current |  | Long-term |  | Current |  | Long-term
Deferred revenue | $ | 856 |  |  | $ | — |  |  | $ | 860 |  |  | $ | — |
Basis difference in intangible assets | — |  |  | 159 |  |  | — |  |  | (580 | )
Inventory reserve | 1,871 |  |  | — |  |  | 1,598 |  |  | — |
Net operating loss carryforwards | — |  |  | 667 |  |  | — |  |  | 364 |
Research and development tax credits | — |  |  | 248 |  |  | — |  |  | 1,033 |
Accrued expenses | 140 |  |  | — |  |  | 182 |  |  | — |
Stock-based compensation | — |  |  | 684 |  |  | — |  |  | 742 |
Allowance for sales returns and doubtful accounts | 20 |  |  | — |  |  | 56 |  |  | — |
Difference in property and equipment basis | — |  |  | (475 | ) |  | — |  |  | (646 | )
Other | 462 |  |  | (19 | ) |  | 291 |  |  | 52 |
Total net deferred income tax asset | 3,349 |  |  | 1,264 |  |  | 2,987 |  |  | 965 |
Less: Valuation allowance | (201 | ) |  | (69 | ) |  | — |  |  | (1,066 | )
Net deferred income tax asset (liability) | $ | 3,148 |  |  | $ | 1,195 |  |  | $ | 2,987 |  |  | $ | (101 | )
The Company has not provided for U.S. deferred income taxes or foreign withholding taxes on undistributed earnings of its non-U.S. subsidiaries since these earnings are intended to be reinvested indefinitely, in accordance with guidelines contained in ASC Topic 740, Accounting for Income Taxes. It is not practical to estimate the amount of additional taxes that might be payable on such undistributed earnings In accordance with ASC Topic 740, the Company analyzed its valuation allowance at December 31, 2012 and determined that, based upon available evidence, it is more likely than not that certain of its deferred tax assets may not be realized and, as such, has established a valuation allowance against certain deferred tax assets. These deferred tax assets include capital loss carryovers and state research and development credits. The statute allowing a federal research and development credit (the “R&D Credit”) expired for years beginning after December 31, 2011. Congress renewed the R&D Credit for the years 2012 and 2013 with the American Taxpayer Relief Act of 2012 (the “Act”). Accounting guidance requires that the effects of a change in tax law be recognized in the period that includes the enactment date. For U.S. federal tax purposes, the enactment date of the Act is the date the President signs the bill into law. The President did not sign the Act into law until January 2, 2013. Therefore, the entire benefit of the R&D credit for 2012 will be recognized in the first quarter of 2013, the reporting period that includes the enactment date. The benefit for the 2013 R&D Credit will be recognized for interim reporting as a part of the forecasted annual effective tax rate. In prior years, the benefit from the R&D Credit has ranged from $288 to $316. As of December 31, 2012, the Company had state research credit carryforwards of $304, which will begin to expire in 2024 if not utilized. The Company has federal net operating loss (“NOL”) carryforwards of approximately $1,489 (pre-tax) and Hong Kong NOL carryforwards of approximately $3,464 (pre-tax). The federal NOL carryforwards will begin to expire in 2025. The Hong Kong NOL carryforwards do not expire. Effective July 1, 2007, the Company adopted the accounting standards related to uncertain tax positions. This standard requires that tax positions be assessed using a two-step process. A tax position is recognized if it meets a "more likely than not" threshold, and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized. Uncertain tax positions must be reviewed at each balance sheet date. Liabilities recorded as a result of this analysis must generally be recorded separately from any current or deferred income tax accounts. The total amount of unrecognized tax benefits at December 31, 2012 and 2011, that would favorably impact our effective tax rate if recognized was $802 and $523, respectively. As of December 31, 2012 and 2011, we accrued $56 and $24, respectively, in interest and penalties related to unrecognized tax benefits. We account for interest expense and penalties for unrecognized tax benefits as part of our income tax provision. Although we believe our estimates are reasonable, we can make no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such difference could have a material impact on our income tax provision and operating results in the period in which we make such determination. A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows:
| Year ended December 31,
| 2012 |  | 2011
Balance - beginning of year | $ | 523 |  |  | $ | 404 |
Additions based on tax positions related to the current year | 795 |  |  | 229 |
Additions for tax positions of prior years | 1,082 |  |  | — |
Reductions for tax positions of prior years | — |  |  | (88 | )
Settlements | — |  |  | — |
Lapse in statutes of limitations | (16 | ) |  | (22 | )
Unrecognized tax benefits, ending balance | $ | 2,384 |  |  | $ | 523 |
The Company’s U.S. federal income tax returns for 2007 through 2012 are subject to examination. The Company also files in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2009. The Company completed its audit by the Internal Revenue Service (“IRS”) for its 2006 tax return in 2010. As a result of the audit by the IRS, there were no material adjustments made to the Company’s tax return. The Inland Revenue Department of Hong Kong, a Special Administrative Region (the “IRD”), commenced an examination of the Company's Hong Kong profits tax returns for 2009 through 2011 in the fourth quarter of 2012 that is anticipated to be completed by the end of 2013. The Company does not anticipate the examination will result in a material change to its financial position. During the next twelve months, the Company anticipates that the Act may result in an increase to its unrecognized tax benefits. No significant reduction from the lapse of statutes of limitations is expected to result.

X
- 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 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 2: 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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration