Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of income (loss) before income taxes in 2012, 2011 and 2010 are as follows:

	Years Ended December 31,
	2012			2011			2010
United States	$	(32,231	)	$	(7,976	)	$	(31,282	)
Foreign		7,502			6,110			6,120
	$	(24,729	)	$	(1,866	)	$	(25,162	)

Provision for Income Taxes

The provision for income taxes consists of the following in 2012, 2011 and 2010:

	Years Ended December 31,
	2012		2011			2010
Current:
Federal	$	-	$	(4,191	)	$	(111	)
State		482		(287	)		320
Foreign		28		35			201
Total current		510		(4,443	)		410
Deferred:
Federal		925		5,636			(2	)
State		279		425			-
Foreign		2,377		2,047			(14,054	)
Total deferred		3,581		8,108			(14,056	)
Total provision	$	4,091	$	3,665		$	(13,646	)

Reconciliation of Actual Income Taxes

Actual income taxes varied from the expected income taxes (computed by applying the statutory income tax rate of 35% for the years ended December 31, 2012, 2011 and 2010 to income before income taxes) as a result of the following:

	Years Ended December 31,
	2012			2011			2010

Expected tax benefit	$	(8,655	)	$	(653	)	$	(8,807	)
Total increase (decrease) in income taxes resulting from:
Change in valuation allowance allocated to income tax expense		13,987			10,641			(9,673	)
Research and experimentation credit		-			-			(78	)
Share-based compensation		38			24			83
Acquisition costs		309			(684	)		3,386
State and local income taxes, net of federal income tax benefit		(672	)		(212	)		435
Foreign income tax rate differential		(723	)		(463	)		(212	)
Change in unrecognized tax benefits		167			(4,669	)		241
Other		(360	)		(319	)		979
Actual income tax expense (benefit)	$	4,091		$	3,665		$	(13,646	)

Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 are presented as follows:

	December 31, 2012			December 31, 2011
Deferred tax assets:
Accrued compensation	$	162		$	611
Bad Debt		3,844			854
Depreciation		2,703			2,775
Research and experimentation credit carryforwards		6,951			7,324
Other credit carryforwards		1,566			1,476
Domestic loss carryforwards		115,421			113,459
Foreign loss carryforwards		8,007			9,652
Nonqualified stock options		5,374			3,450
Other		5,576			4,967
Total gross deferred tax assets		149,604			144,568
Less: asset valuation allowance		(121,117	)		(105,743	)
Net deferred tax asset		28,487			38,825
Deferred tax liabilities:
Software development costs and intangible assets		(7,572	)		(8,439	)
Intangibles—customer contracts & tradenames		(8,680	)		(14,223	)
Other		(5,105	)		(5,452	)
Total gross deferred liabilities		(21,357	)		(28,114	)
Net deferred tax asset	$	7,130		$	10,711
Included on balance sheet:
Current assets: deferred income taxes	$	3,135		$	3,393
Non–current asset: deferred income taxes		7,041			9,209
Non–current liabilities: deferred income taxes		(3,046	)		(1,891	)
Net deferred income taxes	$	7,130		$	10,711

Reconciliation of Unrecognized Tax Benefits

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits in 2012, 2011 and 2010:

	December 31, 2012		December 31, 2011			December 31, 2010
Balance at January 1	$	1,862	$	6,703		$	6,506
Gross increases - tax positions in current year		55		-			19
Gross increases - tax positions in prior year		192		-			178
Gross decreases - tax positions in prior year		-		(12	)		-
Decreases due to statute expirations		-		(4,829	)		-
Balance at December 31	$	2,109	$	1,862		$	6,703