NOTE 3:

INCOME TAXES

For the three and six months ended June 30, 2016, the Company’s effective tax rate was (18.3)% and (175.9)% respectively. For the three and six months ended June 30, 2015, the Company’s effective income tax rate was 25.0% and 26.8%, respectively. For the three and six months ended June 30, 2016 and 2015, the Company’s effective tax rate was determined based on the estimated annual effective tax rate.

The overall effective tax rate differs from the federal statutory rate due to the mix of earnings across jurisdictions and certain items that are discrete to the second quarter. Items discrete to the second quarter of 2016 include foreign exchange losses and increased losses in jurisdictions for which no taxable benefit can be recorded. These items were partially offset by the effect of the release of the valuation allowance in Switzerland due to improved earnings there.

The effective tax rates for the three and six months ended June 30, 2015 were lower than what would have been expected if the federal statutory rate were applied to income before taxes. Items decreasing the effective income tax rate include the favorable rate differences from foreign jurisdictions and release of valuation allowances associated with deferred tax assets of net operating loss carryforward.