INCOME TAXES

Income tax provisions consisted of the following:



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Income before provision for income taxes	$	2,263		$	261		$	2,168		$	3,208
Provision for income taxes	(668		)	(92		)	(632		)	(1,175		)
Effective tax rate	29.5		%	35.2		%	29.2		%	36.6		%

The provision for income tax for the three months ended June 30, 2015 and 2014 resulted primarily from the Company’s federal and foreign tax recognized at statutory rates, adjusted for the tax impact of nondeductible permanent items including stock-based compensation and foreign withholding taxes. Discrete items recognized for the three months ended June 30, 2015 include the reversal of a deferred tax liability resulting from a reorganization of the Company's international structure.

As of June 30, 2015, the Company had unrecognized tax benefits under ASC 740 “Income Taxes”, of approximately $1.8 million including interest of $78,000. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate, if recognized, was $277,000. There were no material changes in the amount of unrecognized tax benefits during the three months ended June 30, 2015. The Company expects to release reserves and record a tax benefit due to the expiration of applicable statutes of limitations during the next 12 months. The Company’s policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision.

Net deferred income taxes were $30.0 million as of June 30, 2015, consisting primarily of federal net operating loss carryforwards and timing differences between book and tax. Because the Company had net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state, and foreign taxing authorities may examine the Company’s tax returns for all years from 1998 through the current period.

The Company maintains a valuation allowance of $7.6 million against certain of its deferred tax assets, including state and certain foreign deferred tax assets. The Company has determined there is not sufficient evidence to support the release of the valuation allowance against these state and foreign deferred tax assets.