Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Components of income (loss) before taxes

Components of income (loss) from continuing operations before taxes are as follows, (in thousands):



	Year Ended December 31,
	2012			2013			2014
Income (loss) from continuing operations before taxes:
United States	$	(7,211	)	$	9,051		$	12,569
Foreign	(2,442		)	(3,460		)	(4,287		)
Total income (loss) from continuing operations before taxes	$	(9,653	)	$	5,591		$	8,282

Components of income tax provision

Components of the income tax provision (benefit) are as follows, (in thousands):



	Year Ended December 31,
	2012		2013			2014
Current:
Federal	$	—	$	(28	)	$	(26	)
State and local	67		99			161
Foreign	682		85			89
	749		156			224
Deferred:
Federal	—		—			—
State, local and foreign	—		(105		)	3
	—		(105		)	3
Total income tax provision	$	749	$	51		$	227

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, (in thousands):



	Year Ended December 31,
	2012			2013			2014
Federal statutory rate	$	(3,282	)	$	1,901		$	2,816
State and local income taxes, net of federal benefit	(16		)	65			106
State rate change and other adjustments	531			—			(49		)
Adjustments to state deferred taxes	—			(590		)	389
Increase (decrease) in valuation allowance	597			(1,672		)	(3,332		)
Foreign tax rate differential	915			24			(59		)
Research and development credits	127			(365		)	(267		)
Share-based compensation	518			491			245
Uncertain tax positions	767			(43		)	57
Adjustments to federal deferred taxes	525			110			208
Other	67			130			113
Income tax provision	$	749		$	51		$	227

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, (in thousands):



	December 31,
	2013			2014
Deferred tax assets:
Net operating loss and tax credit carry forwards	$	93,128		$	88,656
Inventory reserve and uniform capitalization	1,474			1,705
Stock options and warrants	2,440			2,704
Allowance for bad debts and sales returns	171			880
Vacation accrual	261			146
Deferred rent	143			126
Deferred revenue	380			433
Warranty accrual	958			1,173
Depreciation and amortization	1,358			1,137
Other accruals and reserves	362			433
Accrued Bonus	873			418
Intangible assets	1,195			1,037
Total deferred tax assets	102,743			98,848
Deferred tax liabilities:
State taxes	(3,885		)	(3,696		)
Other	(548		)	(187		)
Total deferred income tax liabilities	(4,433		)	(3,883		)
Valuation allowance	(98,205		)	(94,873		)
Net deferred tax assets	$	105		$	92

Summary of the activity related to unrecognized tax benefits

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



	Year Ended December 31,
	2012			2013			2014
Balance, January 1	$	5,025		$	5,726		$	5,771
Increase related to prior period positions	583			341			122
Increase related to current year tax positions	241			380			169
Reductions for tax positions of prior years	(123		)	(676		)	(395		)
Settlements	—			—			—
Balance, December 31	$	5,726		$	5,771		$	5,667