Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of income (loss) before taxes

Components of income (loss) from continuing operations before taxes are as follows for the years ended December 31, (in thousands):



	2011			2012			2013
Income (loss) from continuing operations before taxes:
U.S.	$	(6,229	)	$	(7,211	)	$	9,051
Foreign	(2,106		)	(2,442		)	(3,460		)
Total income (loss) from continuing operations before taxes	$	(8,335	)	$	(9,653	)	$	5,591

Components of income tax provision

Components of the income tax provision (benefit) are as follows for the years ended December 31, (in thousands):



	2011		2012		2013
Current:
Federal	$	—	$	—	$	(28	)
State, local and foreign	129		749		184
	129		749		156
Deferred:
Federal	—		—		—
State, local and foreign	—		—		(105		)
	—		—		(105		)
Total income tax provision	$	129	$	749	$	51

Reconciliation of the income tax provision

The reconciliation of the income tax provision computed using the federal statutory income tax rate to the recognized income tax provision (benefit) is as follows for the years ended December 31, (in thousands):



	2011			2012			2013
Federal statutory rate	$	(2,834	)	$	(3,282	)	$	1,901
State and local income taxes, net of federal benefit	(85		)	(16		)	65
State rate change and other adjustments	160			531			—
Adjustments to state deferred taxes	—			—			(590		)
Increase (decrease) in valuation allowance	1,490			597			(1,672		)
Foreign tax differential	816			915			24
Research and development credits	(49		)	127			(365		)
Share based compensation	402			518			491
Uncertain tax positions	(46		)	767			(43		)
Adjustments to federal deferred taxes	—			525			110
Other	275			67			130
Income tax provision	$	129		$	749		$	51

The tax effect of temporary differences that give rise to deferred income taxes

The tax effect of temporary differences that give rise to deferred income taxes are as follows as of December 31, (in thousands):



	2012			2013
Deferred tax assets:
Net operating loss and tax credit carry forwards	$	93,547		$	93,128
Inventory reserve and uniform capitalization	2,016			1,474
Stock options and warrants	2,330			2,440
In-process research and development	237			—
Allowance for bad debts	232			171
Vacation accrual	386			261
Deferred rent	429			143
Deferred revenue	376			380
Warranty accrual	937			958
Depreciation and amortization	1,012			1,358
Other accruals and reserves	701			362
Accrued Bonus	—			873
Acquired intangibles	1,336			1,195
Total deferred tax assets	103,539			102,743
Deferred tax liabilities:
State taxes	(3,603		)	(3,885		)
Other	(205		)	(548		)
Total deferred income tax liabilities	(3,808		)	(4,433		)
Valuation allowance	(99,731		)	(98,205		)
Net deferred tax assets	$	—		$	105

Summary of the activity related to unrecognized tax benefits

The following table summarizes the activity related to our unrecognized tax benefits (in thousands):



	2011			2012			2013
Balance, January 1	$	5,111		$	5,025		$	5,726
Increase related to prior period positions	—			583			341
Increase related to current year tax positions	124			241			380
Reductions for tax positions of prior years	(210		)	(123		)	(676		)
Settlements	—			—			—
Balance, December 31	$	5,025		$	5,726		$	5,771