Income Taxes

The following table provides details of income taxes:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Income (loss) before income taxes	$	2,835		$	37		$	(9,201	)	$	1,114
Provision (benefit) for income taxes	$	3,833		$	(215	)	$	(3,067	)	$	(290	)
Effective tax rate	135.2		%	(581.1		)%	33.3		%	(26.0		)%

The income tax provision for the three and nine months ended September 30, 2014 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year. The effective tax rates for the three month periods ended September 30, 2014 and 2013 were impacted by changes in the Company’s annual earnings forecast which resulted in cumulative catch up adjustments being recorded in the period. The changes in the Company’s effective tax rate for the nine months ended September 30, 2014 compared to the same period for the prior year are primarily due to the generation of federal R&D credits for both 2012 and 2013 recognized in 2013, which are not available in the 2014 period as a result of legislation, and an increase in foreign tax expense in excess of foreign tax credits generated in 2014.

The Company currently has a partial valuation allowance recorded against certain deferred tax assets. Each quarter, the Company assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers available evidence, both positive and negative, including prudent and feasible tax planning strategies in assessing the need for a valuation allowance. As a result of the Company’s analysis, it concluded that it is more likely than not that a portion of its deferred tax assets will not be realized. Therefore, the Company continues to provide a valuation allowance against certain deferred tax assets. The Company continues to closely monitor available evidence and may reverse some or all of the remaining valuation allowance in future periods, if appropriate. The Company has a valuation allowance of $1,646 as of September 30, 2014 and December 31, 2013.