Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Components of Deferred Income Tax Assets and Liabilities

Significant components of the Company’s deferred income tax assets and liabilities are as follows at December 31:

	2013			2012
Deferred income tax assets:
Net operating loss carryforward	$	513		$	47
Deferred warranty revenue		2,837			1,759
Inventory reserve		389			906
Non-qualified and non-employee stock option expense		3,518			3,682
Capitalized research and development		6,588			8,191
Alternative minimum tax carryforward		1,466			1,406
Research and development tax credit carryforward		3,165			2,936
Deferred legal settlement		1,294			723
IRC section 481(a) adjustment—tangible property		1,316			—
Reserves, accruals, and other		2,066			2,156
Total deferred income tax assets		23,152			21,806
Deferred income tax liabilities:
Depreciation		(2,136	)		(662	)
Amortization		(236	)		(142	)
Total deferred income tax liabilities		(2,372	)		(804	)
Net deferred income tax assets	$	20,780		$	21,002

Net Deferred Tax Assets

The Company’s net deferred tax assets are presented as follows on the accompanying consolidated balance sheets at December 31:

	2013		2012
Current deferred tax assets, net	$	7,101	$	9,396
Long-term deferred tax assets, net		13,679		11,606
Total	$	20,780	$	21,002

Significant Components of the Provision (Benefit) for Income Taxes

Significant components of the provision (benefit) for income taxes are as follows for the years ended December 31:

	2013			2012			2011
Current:
Federal	$	7,963		$	4,605		$	133
State		987			666			59
Total current		8,950			5,271			192
Deferred:
Federal		764			3,168			(3,253	)
State		(143	)		(1,485	)		771
Total deferred		621			1,683			(2,482	)
Tax provision (benefit) recorded as an increase (decrease) in liability for unrecorded tax benefits		219			920			(299	)
Provision (benefit) for income taxes	$	9,790		$	7,874		$	(2,589	)

Reconciliation of the Company's Effective Income Tax Rate to the Federal Statutory Rate

A reconciliation of the Company’s effective income tax rate to the Federal statutory rate for the years ended December 31, 2013, 2012 and 2011 is as follows:

	2013			2012			2011
Federal income tax at the statutory rate	$	9,812		$	7,914		$	(3,370	)
State income taxes, net of federal benefit		1,283			969			(357	)
Permanent differences (i)		(96	)		156			231
Research and development		(386	)		(327	)		(230	)
Return to provision adjustment (ii)		(361	)		(270	)		(458	)
Change in liability for unrecognized tax benefits		219			921			(299	)
Incentive stock option detriment/(benefit)		(538	)		174			449
Change in valuation allowance		—			(1,429	)		1,429
Other		(143	)		(234	)		16
Povision (benefit) for income taxes	$	9,790		$	7,874		$	(2,589	)
Effective tax rate		34.9	%		34.8	%		26.9	%

(i) Permanent differences include certain expenses that are not deductible for tax purposes including lobbying fees as well as favorable items including the domestic production activities deduction

(ii) The 2011 return to provision adjustment was driven by higher than estimated 2010 R&D tax credits, which increased the net tax benefit and therefore, reduced the effective tax rate. The 2012 return to provision adjustment was driven by higher than estimated 2011 R&D tax credits which increased the net tax benefit and therefore, reduced the effective tax rate. The 2013 return to provision adjustment was driven by the domestic production activities deduction which decreased taxable income, and therefore, reduced the effective tax rate.

Roll Forward of Liability for Unrecognized Tax Benefits Exclusive of Accrued Interest

The following table presents a roll forward of our liability for unrecognized tax benefits, exclusive of accrued interest, as of December 31:

	2013		2012		2011
Balance, beginning of period	$	2,903	$	1,982	$	2,282
Increase in previous year tax positions		57		659		—
Increase in current year tax positions		144		151		83
Increase (decrease) related to adjustment of previous estimates of activity		6		111		(383	)
Balance, end of period	$	3,110	$	2,903	$	1,982