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INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2013
INCOME TAXES [Abstract]  
Loss Before Provision for Income Taxes
The Company files income tax returns in the U.S. federal and various state and local jurisdictions and foreign jurisdictions. The Company’s loss before provision for income taxes consisted of the following (in thousands):
 
  
Year Ended December 31,
 
  
2013
  
2012
  
2011
 
U.S.
 
$
(4,919
)
 
$
(6,767
)
 
$
(10,458
)
Foreign
  
118
 
  
437
   
640
 
Loss before income taxes
 
$
(4,801
)
 
$
(6,330
)
 
$
(9,818
)
Income Tax Provision
The components of the provision for income taxes are as follows (in thousands):

 
 
Year Ended December 31,
 
 
 
2013
  
2012
  
2011
 
Current:
 
  
  
 
Federal
 
$
(329
)
 
$
(13
)
 
$
(52
)
State
  
7
   
(56
)
  
69
 
Foreign
  
159
   
366
   
208
 
 
  
(163
)
  
297
   
225
 
Deferred:
            
Federal
  
33
   
(12
)
  
(13
)
State
  
—
   
—
   
13
 
Foreign
  
76
   
(67
)
  
18
 
 
  
109
   
(79
)
  
18
 
Tax (benefit) provision
 
$
(54
)
 
$
218
  
$
243
 
Deferred Tax Assets
The Company’s deferred tax asset consists of the following (in thousands):

 
 
December 31,
 
 
 
2013
  
2012
 
Net operating loss
 
$
11,014
  
$
9,828
 
Stock-based compensation
  
3,806
   
5,561
 
Other accruals and reserves
  
3,686
   
3,259
 
Credits
  
3,121
   
2,261
 
Capital loss
  
—
   
796
 
Foreign
  
360
   
436
 
Accrued warranty
  
441
   
466
 
Depreciation and amortization
  
224
   
180
 
Other
  
470
   
(450
)
Deferred tax asset before valuation allowance
  
23,122
   
22,337
 
Valuation allowance
  
(22,762
)
  
(21,907
)
Deferred tax asset after valuation allowance
  
360
   
430
 
Deferred tax liability on indefinite-lived tangible asset
  
(39
)
  
—
 
Net deferred tax asset
 
$
321
  
$
430
 

(1) The Company revised its 2012 deferred tax asset balances relating to its net operating loss, stock-based compensation, other assets and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented.
 
Deferred Tax Asset Balance
The Company’s deferred tax asset balance is reported in the following captions in the Consolidated Balance Sheets (in thousands):

 
 
December 31,
 
 
 
2013
  
2012
 
Deferred tax asset (current portion)
 
$
31
  
$
40
 
Deferred tax asset, net of current portion
  
329
   
553
 
Accrued liabilities (current deferred tax liability)
  
—
   
(163
)
Accrued liabilities (non-current deferred tax liability)
  
(39
)
  
—
 
Net deferred tax asset after valuation allowance
 
$
321
  
$
430
 
Reconciliation of Effective Tax Rate
The differences between the U.S. federal statutory income tax rates to the Company’s effective tax rate are as follows:
  
Year Ended December 31,
 
  
2013
  
2012*
  
2011*
 
U.S. federal statutory income tax rate
  
35.00
%
  
35.00
%
  
35.00
%
State tax rate, net of federal benefit
  
1.57
   
3.28
   
2.56
 
Benefit for research and development credit
  
19.91
   
3.40
   
6.02
 
Foreign rate differential
  
(4.53
)
  
(1.49
)
  
—
 
Changes in unrecognized tax benefits
  
2.60
   
1.06
   
(0.02
)
Foreign income inclusion
  
—
   
(0.05
)
  
(2.15
)
Income tax refund
  
0.19
   
1.07
   
2.33
 
Stock-based compensation
  
(34.33
)
  
(21.31
)
  
(15.82
)
Meals and entertainment
  
(2.10
)
  
(1.68
)
  
(0.88
)
Tax effect of other comprehensive income
  
—
   
0.28
   
(2.01
)
Valuation allowance
  
(17.82
)
  
(21.15
)
  
(28.51
)
Other
  
0.63
   
(1.86
)
  
1.00
 
Effective tax rate
  
1.12
%
  
(3.45
)%
  
(2.48
)%


*The Company revised its 2012 stock-based compensation and valuation allowance. These changes had no impact to the balance sheet, statement of operations, earnings per share, statement of cash flows, or statement of equity for any period presented.
Unrecognized Tax Benefits
The following table summarizes the activity related to the Company’s gross unrecognized tax benefits in December 31, 2011 to December 31, 2013 (in thousands):

 
 
Year Ended December 31,
 
 
 
2013
  
2012
  
2011
 
Balance at beginning of year
 
$
536
  
$
583
  
$
555
 
Increases related to prior year tax positions
  
36
   
—
   
—
 
Increases related to current year tax positions
  
116
   
29
   
44
 
Decreases related to lapsing of statute of limitations
  
(153
)
  
(76
)
  
(16
)
Balance at end of year
 
$
535
  
$
536
  
$
583