Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income (Loss) Before Income Taxes

Income before income tax expense consists of the following:

	Years ended December 31,
	2014		2013		2012
Domestic	$	12,877	$	14,842	$	8,310
Foreign		24,645		14,020		22,632
Income before income taxes	$	37,522	$	28,862	$	30,942

Components of Income Tax Expense (Benefit)

The components of the income tax expense (benefit) for income taxes are as follows:

	Years ended December 31,
	2014			2013			2012
Current:
Federal	$	3,780		$	4,859		$	4,418
State		367			472			429
Foreign		4,433			3,751			5,537
Current income tax expense		8,580			9,082			10,384
Deferred:
Federal		306			(1,105	)		(1,871	)
State		30			(108	)		(183	)
Foreign		(5,043	)		(516	)		(386	)
Deferred income tax benefit		(4,707	)		(1,729	)		(2,440	)
Income tax expense	$	3,873		$	7,353		$	7,944

Reconciliation of Income Tax Expense (Benefit)

Income tax expense (benefit) for the years ended December 31, 2014, 2013 and 2012 differ from the amount computed by applying the federal statutory corporate rate to income before income taxes. The differences are recorded as follows:

	Years ended December 31,
	2014			2013			2012
Tax expense (benefit) at statutory rate of 34%	$	12,757		$	9,813		$	10,521
State income taxes, net of federal benefit		425			490			274
Foreign tax rate difference		(2,917	)		(1,345	)		(2,549	)
Research and development credit		(583	)		(957	)		—
Change in valuation allowance		(5,392	)		(187	)		3
Equity based compensation		880			(212	)		(225	)
Manufacturing credit		(721	)		(249	)		(139	)
Other		(576	)		—			59
Total income tax expense	$	3,873		$	7,353		$	7,944

Components of Net Deferred Income Tax Assets and Liabilities

The components of the Company’s net deferred income tax asset and liabilities are as follows:

	As of December 31,
	2014			2013
Net deferred income tax asset - Current
Warranty cost	$	404		$	348
Bad debt reserve		30			73
Inventory reserve		512			253
Unearned service revenue		3,474			2,992
Other, net		1,516			935
Net deferred income tax asset - Current	$	5,936		$	4,601
Net deferred income tax asset - Non-current
Depreciation	$	(3,059	)	$	(1,559	)
Goodwill amortization		(2,007	)		(1,841	)
Product design costs		(136	)		(259	)
Employee stock options		2,756			3,021
Unearned service revenue		1,649			1,654
Loss carryforwards		9,240			10,252
Deferred income tax asset - Non-current		8,443			11,268
Valuation Allowance		(1,819	)		(6,845	)
Net deferred income tax asset - Non-current	$	6,624		$	4,423
Net deferred income tax liability - Non-current
Intangible assets	$	—		$	(1,171	)

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Years ended December 31,
	2014		2013		2012
Balance at January 1,	$	265	$	265	$	265
Additions based on tax positions related to the current year		—		—		—
Additions for tax positions of prior years		—		—		—
Reductions for tax positions of prior years		—		—		—
Settlements		—		—		—
Balance at December 31,	$	265	$	265	$	265

Open Tax Years and Ongoing Tax Examinations in Major Jurisdictions

The table below summarizes the open tax years and ongoing tax examinations in major jurisdictions as of December 31, 2014:

Jurisdiction	Open Years		Examination in Process
United States - Federal Income Tax		2010-2014	N/A
United States - various states		2010-2014	N/A
Germany		2009-2014	2010-2011
Switzerland		2013	N/A
Singapore		2010-2014	N/A