Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Earnings (Loss) before Income Taxes, Related to Jurisdictions

Income (loss) before income taxes relate to the following jurisdictions (in thousands):



	Years Ended December 31,
	2013			2012		2011
United States	$	(5,457	)	$	3,158	$	(3,182	)
Foreign	8,026			3,531		7,290
	$	2,569		$	6,689	$	4,108

Provision for Income Taxes

The provision for income taxes consists of the following (in thousands):



	Years Ended December 31,
	2013			2012			2011
Current:
Federal	$	—		$	78		$	—
State	(452		)	(30		)	79
Foreign	3,230			2,048			3,364
	2,778			2,096			3,443
Deferred:
Federal	—			—			(1,603		)
State	—			—			(133		)
Foreign	(23		)	(799		)	(415		)
	(23		)	(799		)	(2,151		)
Total	$	2,755		$	1,297		$	1,292

Significant Differences Between the U.S. Federal Statutory Tax Rate and Company's Effective Income Tax Expense for Earnings

The significant differences between the U.S. federal statutory tax rate of 34% and the Company’s effective income tax expense for earnings (in thousands) are as follows:



	Years Ended December 31,
	2013			2012			2011
Statutory federal income tax rate	$	873		$	2,274		$	1,397
State income taxes, net of federal effect	(657		)	24			(130		)
Change in deferred tax asset valuation allowance	(142		)	(1,883		)	(1,910		)
Foreign taxes in excess of U.S. statutory rate	1,784			486			1,481
Compensation deduction limitation	820			265			360
Other, net	77			131			94
	$	2,755		$	1,297		$	1,292

Tax Effects of Temporary Differences and Carry-Forwards that Give Rise to Deferred Tax Assets and Liabilities

The tax effects of temporary differences and carry-forwards that give rise to deferred tax assets and liabilities consist of the following (in thousands):



	Years Ended December 31,
	2013		2012
Deferred income tax assets:
Accounts payable and accrued expenses	$	1,864	$	2,088
Accrued payroll and related expenses	1,933		3,902
Stock-based compensation expense	9,811		9,221
Depreciation of property and equipment	5,836		3,746
Non-compete agreements	8		27
Operating loss carry-forwards of foreign subsidiary	1,690		1,501
Federal operating loss carry-forwards	31,003		27,494
Intangible assets	865		6,195
State operating loss carry-forwards	2,925		2,648
Other	2,165		3,243
Gross deferred tax assets	58,100		60,065
Less valuation allowance	48,453		48,489
Gross deferred tax assets net of valuation allowance	9,647		11,576
Deferred income tax liabilities:
Intangible assets	3,970		5,790
Unbilled receivables and refund liabilities	1,765		2,538
Capitalized software	984		969
Other	1,220		675
Gross deferred tax liabilities	7,939		9,972
Net deferred tax assets	$	1,708	$	1,604

Schedule of Unrecognized Tax Benefits

A reconciliation of our beginning and ending amount of unrecognized tax benefits and related accrued interest thereon is as follows:



	Unrecognized Tax Benefits			Accrued Interest and Penalties
Balance at January 1, 2011	$	2,055		$	1,765
Additions based on tax positions related to the current year	—			—
Additions based on tax positions related to the prior years	594			453
Balance at December 31, 2011	$	2,649		$	2,218
Additions based on tax positions related to the current year	—			—
Additions based on tax positions related to the prior years	333			456
Decreases based on tax positions related to the prior years	(785		)	(1,214		)
Balance at December 31, 2012	$	2,197		$	1,460
Additions based on tax positions related to the current year	—			—
Additions based on tax positions related to the prior years	—			119
Decreases based on payments made during the year	(932		)	(385		)
Decreases based on tax positions related to the prior years	(541		)	(934		)
Balance at December 31, 2013	$	724		$	260