(3) Income Taxes

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

(3) Income Taxes

(3) Income Taxes

The Company’s provision for income taxes consists of state and local, and foreign taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects to achieve for the full year.

For both the three months ended March 31, 2013 and the three months ended March 31, 2012, the Company recorded an income tax provision of $0.2 million on its pre-tax loss of $4.2 million and $2.2 million, respectively, consisting primarily of state and local and foreign taxes. The effective tax rate for the three months ended March 31, 2013 was (4.2%). As of March 31, 2013, the Company’s conclusion did not change with respect to the realizability of its domestic deferred tax assets and, therefore, the Company has not recorded any benefit for its expected net domestic deferred tax assets for the full year 2013 estimated annual effective tax rate. As of March 31, 2013, the valuation allowance totaled approximately $38.3 million.

The Company’s total unrecognized tax benefits, excluding interest and penalties for both March 31, 2013 and December 31, 2012 were approximately $5.1 million. At March 31, 2013, $2.3 million including interest, if recognized, would reduce the Company’s effective tax rate. As of March 31, 2013 and December 31, 2012, the Company recorded an aggregate of approximately $409,000 and $373,000, respectively, of accrued interest and penalties.