INCOME TAXES

3 Months Ended

Mar. 31, 2013

INCOME TAXES

INCOME TAXES

NOTE 5—INCOME TAXES

The Company’s effective tax rate for the three months ended March 31, 2013 is 49.9% compared to 11.7% for the three months ended March 31, 2012.  The difference is primarily due to changes in pre-tax income and valuation allowances related to foreign operations recorded for the three months ended March 31, 2013.  The Company’s operations resulted in a pre-tax income of $1.9 million and a tax provision of $0.9 million at the 49.9% effective tax rate for the three months ended March 31, 2013.

As of March 31, 2013, the Company had total unrecognized tax benefits of approximately $2.7 million of which approximately $2.7 million of this benefit would impact the Company’s effective tax rate if recognized.  The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax provision in its consolidated statement of operations.  As of March 31, 2013, the Company’s accrual of interest and penalties were $0.4 million.