Note 12 - Income Taxes	9 Months Ended
Sep. 30, 2017
Notes to Financial Statements
Income Tax Disclosure [Text Block]	12 . INCOME TAXES The income tax provision for the three and nine months ended September 30, 2017 was $1.4 million, or 5.8% of pre-tax income, and $3.1 million, or 5.5% of pre-tax income, respectively. The effective tax rate differed from the federal statutory rate primarily because foreign income generated by the Company’s subsidiaries in Bermuda and China was taxed at lower rates. In addition, the effective tax rate was impacted by changes in the valuation allowance primarily related to stock-based compensation. The income tax provision for the three and nine months ended September 30, 2016 was $1.4 million, or 8.9% of pre-tax income, and $2.7 million, or 6.9% of pre-tax income, respectively. The effective tax rate differed from the federal statutory rate primarily because foreign income generated by the Company’s subsidiaries in Bermuda and China was taxed at lower rates. In addition, the effective tax rate was impacted by changes in the valuation allowance primarily related to stock-based compensation . On July 27 , 2015, in Altera Corp. v. Commissioner , the U.S. Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was issued in December 2015, and the Internal Revenue Service (“IRS”) appealed the decision in February 2016. At this time, the U.S. Department of the Treasury has not withdrawn the requirement from its regulations to include stock-based compensation in the cost pool to be shared under a cost-sharing arrangement. Due to the uncertainty surrounding the status of the current regulations, questions related to the scope of potential benefits, and the risk of the Tax Court’s decision being overturned upon appeal, the Company has not recorded any adjustments as of September 30, 2017. The Company will continue to monitor developments related to this opinion and the potential impact on its financial statements. Adoption of ASU No. 2016 - 09 Upon adoption of ASU No. 2016 - 09 on January 1, 2017, excess tax benefits are now recognized in the income tax provision in the Condensed Consolidated Statements of Operations prospectively, rather than in additional paid-in capital in the Condensed Consolidated Balance Sheets. The Company applied the modified retrospective method and there was no net cumulative-effect adjustment to retained earnings on January 1, 2017, as the increase in deferred tax assets for previously unrecognized excess tax benefits was fully offset by a valuation allowance. Unrecognized Tax Benefits As of September 30, 2017, the Company had $ 16.1 million of unrecognized tax benefits, $4.5 million of which would affect its effective tax rate if recognized after considering the valuation allowance. As of December 31, 2016, the Company had $14.4 million of unrecognized tax benefits, $3.5 million of which would affect its effective tax rate if recognized after considering the valuation allowance. Uncertain tax positions relate to the allocation of income and deductions among the Company ’s global entities and to the determination of the research and development tax credit. The Company expects to release approximately $0.6 million of its unrecognized tax benefits in the fourth quarter of 2017 as a result of a lapse of the statute of limitation. It is reasonably possible that over the next twelve -month period the Company may experience other increases or decreases in its unrecognized tax benefits. However, it is not possible to determine either the magnitude or the range of other increases or decreases at this time. The Company recognizes interest and penalties, if any, related to uncertain tax positions in its income tax provision. As of September 30, 2017 and December 31, 2016, the Company has approximately $0.5 million and $0.3 million of accrued interest related to uncertain tax positions, respectively, which were recorded in long-term income tax liabilities in the Condensed Consolidated Balance Sheets.

. INCOME TAXES

The income tax

provision for the

three

and

nine

months ended

September 30, 2017

was

$1.4

million, or

5.8%

of pre-tax income, and

$3.1

million, or

5.5%

of pre-tax income, respectively. The effective tax rate differed from the federal statutory rate primarily because foreign income generated by the Company’s subsidiaries in Bermuda and China was taxed at lower rates. In addition, the effective tax rate was impacted by changes in the valuation allowance primarily related to stock-based compensation.

The income tax provision for the

three

and

nine

months ended

September 30, 2016

was

$1.4

million, or

8.9%

of pre-tax

income, and

$2.7

million, or

6.9%

of pre-tax income, respectively. The effective tax rate differed from the federal statutory rate primarily because foreign income

generated by the Company’s subsidiaries in Bermuda and China was taxed at lower rates. In addition, the effective tax rate was impacted by changes in the valuation allowance primarily related to stock-based compensation

July 27

2015,

Altera Corp. v. Commissioner

, the U.S. Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was issued in

December 2015,

and the Internal Revenue Service (“IRS”) appealed the decision in

February 2016.

At this time, the U.S. Department of the Treasury has

not

withdrawn the requirement from its regulations to include stock-based compensation in the cost pool to be shared under a cost-sharing arrangement. Due to the uncertainty surrounding the status of the current regulations, questions related to the scope of potential benefits, and the risk of the Tax Court’s decision being overturned upon appeal, the Company has

not

recorded any adjustments as of

September 30, 2017.

The Company will continue to monitor developments related to this opinion and the potential impact on its financial statements.

Adoption of ASU

No.

2016

Upon adoption of ASU

No.

2016

January 1, 2017,

excess tax benefits are now recognized in the income tax provision in the Condensed Consolidated Statements of Operations prospectively, rather than in additional paid-in capital in the Condensed Consolidated Balance Sheets. The Company applied the modified retrospective method and there was

net cumulative-effect adjustment to retained earnings on

January 1, 2017,

as the increase in deferred tax assets for previously unrecognized excess tax benefits was fully offset by a valuation allowance.

Unrecognized Tax Benefits

As of

September 30, 2017,

the Company had $

16.1

million of unrecognized tax benefits,

$4.5

million of which would affect its effective tax rate if recognized after considering the valuation allowance. As of

December 31, 2016,

the Company had

$14.4

million of unrecognized tax benefits,

$3.5

million of which would affect its effective tax rate if recognized after considering the valuation allowance.

Uncertain tax positions relate to the allocation of income and deductions among the Company

’s global entities and to the determination of the research and development tax credit. The Company expects to release approximately

$0.6

million of its unrecognized tax benefits in the

fourth

quarter of

2017

as a result of a lapse of the statute of limitation. It is reasonably possible that over the next

twelve

-month period the Company

may

experience other increases or decreases in its unrecognized tax benefits. However, it is

not

possible to determine either the magnitude or the range of other increases or decreases at this time.

The Company recognizes interest and penalties, if any, related to uncertain tax positions in its

income tax provision. As of

September 30, 2017

and

December 31, 2016,

the Company has approximately

$0.5

million and

$0.3

million of accrued interest related to uncertain tax positions, respectively, which were recorded in long-term income tax liabilities in the Condensed Consolidated Balance Sheets.