INCOME TAXES

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

5. INCOME TAXES

As of December 31, 2012, the Company had a domestic net operating loss carryforward ("NOL"), of approximately $113.5 million, a domestic alternative minimum tax credit carryforward of approximately $215 thousand and domestic research and development tax credit carryforward of approximately $526 thousand for federal tax purposes. The Company's federal NOL is expected to expire as follows if unused: $107.6 million in 2018 through 2022, $5.5 million in 2024 and 2025 and $385 thousand in 2027. The NOL and tax credit carryforwards are subject to alternative minimum tax limitations and to examination by the tax authorities. In addition, the Company had a "change of ownership" as defined under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended (an "Ownership Change"). The Company does not believe this Ownership Change will place a significant restriction on its ability to utilize its NOL in the future. During the year ended December 31, 2012, the Company recorded tax windfall benefits of approximately $178 thousand.

The Company is subject to income taxes in the U.S. federal jurisdiction, and various foreign, state and local jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In the United States, the tax years 2008 – 2010 remain open to examination by the federal Internal Revenue Service and the tax years 2007 – 2010 remain open for various state taxing authorities.

The components of income (loss) before income taxes were as follows (in thousands):

	Year Ended December 31,
	2010			2011		2012
Domestic	$	(101	)	$	3,189	$	1,869
Foreign		170			177		154
	$	69		$	3,366	$	2,023

Temporary differences that give rise to the components of deferred tax assets are as follows (in thousands):

			December 31,
			2011			2012
Current deferred tax assets:
	Inventory		$	289		$	323
	Accrued compensation			237			251
	Net operating loss carryforwards – domestic			1,151			45
	Other			862			1,252
				2,539			1,871
	Valuation allowance			(1,369	)		(741	)
		Total current deferred tax assets	$	1,170		$	1,130
Noncurrent deferred tax assets:
	Research and development tax credit		$	553		$	526
	Alternative minimum tax credit			228			233
	Deferred revenue			1,840			1,884
	Property and equipment			1,932			2,059
	Net operating loss carryforwards – domestic			52,456			39,541
				57,009			44,243
	Valuation allowance			(29,875	)		(17,497	)
		Total noncurrent deferred tax assets	$	27,134		$	26,746

The components of the income tax expense (benefit) are as follows (in thousands):

				Year Ended December 31,
				2010			2011		2012
Current income tax expense (benefit):
	Federal			$	7		$	37	$	41
	State				16			90		140
	Foreign				38			38		33
		Total current expense (benefit)			61			165		214
Deferred income tax expense (benefit):
	Federal				(9	)		977		560
	State				(1	)		79		46
	Foreign				—			—		—
		Total deferred expense (benefit)			(10	)		1,056		606
			Total income tax expense (benefit)	$	51		$	1,221	$	820

The Company's income tax expense (benefit) relating to income (loss) for the periods presented differs from the amounts that would result from applying the federal statutory rate to that income (loss) as follows:

	Year Ended December 31,
	2010			2011			2012
Statutory federal tax rate		34	%		34	%		34	%
State income taxes, net of federal benefit		52	%		3	%		4	%
Other permanent differences		121	%		3	%		6	%
Change in tax rate		40	%		(4	)%		(1	)%
Foreign rate difference		(29	)		(1	)%		(1	)%
Change in valuation allowance		(472	)%		(137	)%		(638	)%
Other		328	%		138	%		637	%
Effective income tax rate		74	%		36	%		41	%