Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 10. Income Taxes

Changes in unrecognized income tax benefits follow:

Balance at January 1, 2010	$	5,889
Increases related to prior year tax positions		523
Decreases related to prior year tax positions		(109	)
Balance at December 31, 2010		6,303
Increases related to prior year tax positions		42
Decreases related to prior year tax positions		(48	)
Increases related to current year tax positions		125
Settlements		(139	)
Balance at December 31, 2011	$	6,283

Included in the balance of unrecognized tax benefits at December 31, 2011 are potential benefits of $0.4 million that, if recognized, would impact the Company’s effective tax rate. The Company does not reasonably expect any significant changes in the amount of unrecognized tax benefits to occur within the next twelve months.

Historically, the Company has not accrued or paid significant interest and penalties for underpayments of income taxes due to its net operating loss position. Interest and penalties related to underpayment of income taxes is classified as a component of income tax expense in the consolidated statement of operations. For the year ended December 31, 2011, less than $0.1 million of interest and penalties were recognized in the consolidated statement of operations compared with $0.1 million for the year ended December 31, 2010.

The Company files income tax returns in the United States and several foreign countries and has not extended the statute of limitations to assess additional taxes for any of these jurisdictions. The Company has effectively settled United States Federal tax positions taken through 2002. However, the Company is subject to adjustment in each of these periods, to the extent of its net operating loss carry forwards. The open tax years for foreign jurisdictions are 2003 through 2011 and for United States state and local jurisdictions are 1997 through 2011.

The components of the loss before income taxes follow:

	Years Ended December 31,
	2011			2010			2009
U.S. loss	$	(23,082	)	$	(3,700	)	$	(11,996	)
Foreign income		846			67			830
Loss before income taxes	$	(22,236	)	$	(3,663	)	$	(11,166	)

The provision for income taxes consists exclusively of current foreign income taxes.

A reconciliation of the United States federal statutory rate to the effective income tax rate follows:

	Years Ended December 31,
	2011			2010			2009
U.S. federal statutory tax rate		(35.0	)%		(35.0	)%		(35.0	)%
State taxes		(1.2	)		(33.2	)		—
Deemed repatriation of foreign income		10.1			6.7			—
Excess foreign tax expense		0.5			18.1			—
Goodwill write down		14.0			—			15.3
Tax attributes		20.1			(116.3	)		—
Uncertain tax positions		0.8			9.4			—
Change in valuation allowance		(5.6	)		171.9			17.1
Permanent differences, tax credits and other adjustments		(0.8	)		5.3			5.7
Effective income tax rate		2.9	%		26.9	%		3.1	%

The tax effects of temporary differences that give rise to deferred income taxes follow:

	2011			2010
Deferred income tax assets:
Property and equipment	$	290		$	298
Other nondeductible accruals		1,194			1,051
Restructuring accrual		1,706			4,305
Capitalized research and development for tax purposes		8,368			9,286
Net operating loss carry-forwards		188,147			172,189
Research and development and other credits		20,962			21,073
Inventories		749			14,836
Stock compensation		3,502			3,199
Other		2,452			2,387
Total gross deferred income tax assets		227,370			228,624
Valuation allowance		(226,254	)		(227,498	)
Net deferred income tax assets		1,116			1,126
Deferred income tax liabilities:
Other		(1,116	)		(1,126	)
Net deferred income tax liabilities		(1,116	)		(1,126	)
Net deferred income taxes	$	—		$	—

The Company continually evaluates its deferred income tax assets to determine whether it is more likely than not that such assets will be realized. In assessing the realizability, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. Based on this assessment, management believes that significant uncertainty exists concerning the recoverability of the deferred income tax assets. As such, a valuation allowance has been provided for deferred income tax assets as of December 31, 2011 and 2010. Of the $226.3 million valuation allowance at December 31, 2011, subsequently recognized income tax benefits, if any, in the amount of $4.7 million will be applied directly to additional paid-in capital.

At December 31, 2011, the Company had available, for federal income tax purposes, net operating loss (“NOL”) carry-forwards of approximately $502.6 million and research and development tax credit carry-forwards of approximately $21.0 million expiring in varying amounts from 2011 through 2031. For state income tax purposes, the Company had available NOL carry-forwards of approximately $192.9 million and state tax credit carry-forwards of $7.8 million expiring in varying amounts from 2011 to 2031. Additionally, the Company has generated $27.5 million of NOL’s in foreign jurisdictions which can be carried forward indefinitely.

Certain transactions involving the Company’s beneficial ownership have occurred in prior years, which resulted in a stock ownership change for purposes of Section 382 of the Internal Revenue Code of 1986, as amended. Consequently, approximately $192.3 million of the NOL carry-forwards and $11.2 million of research and development tax credit carry-forwards are subject to these limitations. The Company has not yet determined if any of the NOL and credits generated through 2011 will be subject to limitation under Section 382.