Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income tax expense (benefit), net of valuation allowance

For the years ended December 31, 2013, 2012, and 2011, the following table summarizes the components of income before income taxes and the provision for income taxes:

	Year Ended December 31,
	2013			2012			2011
Income (loss) before income tax:
U.S.	$	7,698		$	3,152		$	( 16,309	)
Israel		14,279			20,414			13,980
Other Foreign		768			3,365			-
Income before income taxes	$	22,745		$	26,931		$	( 2,329	)


Income tax expense (benefit):
United States - Federal tax:
Current	$	( 1,253	)	$	2,752		$	246
Deferred		1,795			(1,572	)		(5,495	)

United States - State tax:
Current		180			315			-
Deferred:		850			(2,074	)		(243	)

Israel:
Current		2,781			4,034			3,487
Deferred		(237	)		(50	)		(17	)

Other foreign:
Current		54			1371			-
Deferred:		200			(338	)		-

Income tax expense (benefit)	$	4,370		$	4,438		$	(2,022	)

Reconciliation of the effective tax rate

For the years ended December 31, 2013, 2012 and 2011, the following table reconciles the federal statutory income tax rate to the effective income tax rate:

	Year Ended December 31,
	2013			2012			2011
Federal Tax rate		35	%		35	%		35	%

Federal tax expense (benefit) at 35%	$	7,961		$	9,426		$	( 815	)
State and local income tax		958			286			(320	)
Foreign rate differential		(2,656	)		(4,213	)		(3,654	)
Increase in taxes from permanent differences in stock-based compensation		433			637			2,674
US taxation of foreign earnings – Subpart F		367			403			-
Increase (decrease) in uncertain tax positions		269			(2,325	)		-
Return to provision and other adjustments		(1,964	)		-			-
Impact of tax rate change on deferred taxes		(942	)		-			-
Foreign tax credits		(341	)		-			-
Change in valuation allowance		116			-			-
Other		169			224			93

Income tax expense (benefit)	$	4,370		$	4,438		$	( 2,022	)

Deferred tax assets (liabilities)

The following table summarizes the components of deferred income tax assets and liabilities:

	December 31,
	2013			2012

Loss carryforwards	$	21,092		$	20,122
AMT credits		112			1,495
Foreign tax credits		-			446
Accrued employment expenses		1,256			718
Amortization and write-offs		8,883			10,557
Capitalized R&D costs		2,933			3,670
Deferred revenues		84			301
Depreciation		4,360			5,537
Doubtful accounts		3,499			2,121
Inventory reserves		822			-
Other accruals and reserves		228			617
Return allowances		5,660			4,118
Translation adjustments		61			-
Gross deferred tax asset		48,990			49,702

Less: valuation allowance		(11,910	)		(10,075	)

Net deferred tax asset	$	37,080		$	39,627

Among current assets	$	13,041		$	19,441
Among other non-current assets		24,039			20,186

Reconciliation of the beginning and ending amount of unrecognized tax benefits

Reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


Balance at January 1, 2011	$	2,700
Additions / Settlements during 2011		-
Balance December 31, 2011		2,700
Additions/ Settlements due 2012		(2,325	)
Balance at December 31, 2012		375
Additions / Settlements due 2013		269
Balance at December 31, 2013	$	644