13.

Income Taxes

The provisions for income taxes were

$1.4

million and

$0.4

million for the

three

- and

six

- month periods ended

June 30, 2018,

based on effective tax rates of

12.5%

and

10.4%,

respectively. Provisions for income taxes were

$6.4

million and

$8.9

million for the

three

- and

six

- month periods ended

June 30, 2017,

based on effective tax rates of

35.9%

and

34.7%,

respectively. The net decrease in the effective tax rate for the

three

- and

six

- month periods ended

June 30, 2018,

as compared to the same periods in

2017,

was primarily due to the reduction of Federal Corporate Income Tax rate as a result of the Tax Cuts and Jobs Act (“Tax Act”) tax reform legislation. This legislation makes significant changes to the U.S. tax law, including a reduction in the corporate tax rate from

35%

21%

starting in

2018.

In addition, during the

second

quarter the Company realized windfall tax benefits related to exercises of employee equity awards resulting in a discrete period income tax benefit of

$1.3

million and a reduction in the effective tax rate of

11.3%.

The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in Italy. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate.

In connection with the preparation of the financial statements, the Company assesses whether it was more likely than

not

that it would be able to utilize, in future periods, the net deferred tax assets associated with its net operating loss carry-forward. The Company has concluded that the positive evidence outweighs the negative evidence and, thus, the deferred tax assets

not

otherwise subject to a valuation allowance are realizable on a “more likely than

not”

basis. As such, the Company did

not

record a valuation allowance as of

June 30, 2018

December 31, 2017.

In accordance with Staff Accounting Bulletin

No.

118,

which provides guidance on accounting for the tax effects of the

2017

Tax Act, the Company has recorded a reasonable estimate of the impact on the consolidated financial statements. We will continue to assess forthcoming guidance and accounting interpretations on the effects of the Tax Act and expect to complete the analysis within the measurement period in accordance with the SEC guidance. The Company does

not

expect a significant adjustment to the recorded amounts.