Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Significant components of the provision for income taxes are as follows (in thousands):

	Year Ended December 31,
	2014		2013		2012
Current:
Federal	$	10,973	$	7,292	$	8,405
State		1,846		883		1,704
Foreign		876		286		382
Total current		13,695		8,461		10,491

Deferred:
Federal		550		1,455		(581	)
State		112		149		(32	)
Total deferred		662		1,604		(613	)
Total provision for income taxes	$	14,357	$	10,065	$	9,878

Pretax Income

The components of pretax income for the years ended December 31, 2014, 2013 and 2012 are as follows (in thousands):

	Year Ended December 31,
	2014			2013			2012
Domestic		$	33,937		$	29,280		$	23,533
Foreign			3,583			2,217			2,452
Total		$	37,520		$	31,497		$	25,985

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred taxes as of December 31, 2014 and 2013 are as follows (in thousands):

	December 31,
	2014			2013
Deferred tax assets:
Accrued liabilities	$	1,172		$	1,172
Bad debt reserve		352			365
Net operating losses		1,265			1,510
Deferred compensation		3,060			2,728
Intangibles		-			2,101
Acquisition-related costs		380			490
Total deferred tax assets		6,229			8,366
Deferred tax liabilities:
Prepaid expenses		809			829
Equity in undistributed foreign earnings		125			125
Goodwill and Intangibles		12,176			7,594
Fixed assets		1,352			1,372
Total deferred tax liabilities		14,462			9,920

Net deferred tax liability	$	(8,233	)	$	(1,554	)

Federal Corporate Statutory Income Tax Rate Reconciled to Effective Income Tax Rate

The federal corporate statutory tax rate is reconciled to the Company's effective income tax rate as follows:

	Year Ended December 31,
	2014		2013		2012
Federal statutory rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal benefit	4.5		4.3		4.4
Effect of foreign operations	(1.0)		(1.3)		(1.8)
Stock compensation	2.6		1.7		1.8
Non-deductible acquisition costs	0.7		0.2		0.8
Research and development tax credit	(3.3)		(5.7)		(2.7)
U.S. domestic production deduction	(0.9)		(3.1)		-
Other	0.7		0.9		0.5
Effective tax rate	38.3	%	32.0	%	38.0	%

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block]

The following table is a reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits (in thousands):

	December 31,
	2014			2013
Balance at beginning of year	$	519		$	79
Unrecognized tax benefits related to current year		211			440
Reductions for tax positions of prior years		(185	)		-
Balance at end of year	$	545		$	519