CONTROL4 CORP - 10-K filing on 2014-02-21

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of domestic and foreign components of net income (loss) before income tax expense

The domestic and foreign components of net income (loss) before income tax expense consists of the following for the periods shown below (in thousands):

	Years Ended December 31,

	2011			2012			2013
Income (loss) before income taxes:
Domestic	$	(4,697	)	$	(4,055	)	$	3,633
Foreign		812			473			118


Total income (loss) before income taxes	$	(3,885	)	$	(3,582	)	$	3,751

Schedule of components of provision for income taxes

The provision for income taxes consisted of the following components (in thousands):

	Years Ended December 31,

	2011			2012			2013
Current:
Domestic
Federal	$	—		$	15		$	64
State		—			57			53
Foreign		—			69			147


Total current tax expense		—			141			264


Deferred:
Domestic
Federal		(1,773	)		(710	)		1,572
State		(280	)		(65	)		44
Foreign		251			88			(16	)
Valuation allowance		1,802			687			(1,616	)


Total deferred tax benefit		—			—			(16	)


Total income tax expense	$	—		$	141		$	248

Schedule of reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate

A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows:

	Years Ended December 31,

	2011			2012			2013
Federal income tax rate		(34.0	)%		(34.0	)%		34.0	%
State taxes, net of federal benefit		(4.1	)		1.1			1.1
Stock-based compensation		9.1			15.0			22.7
Stock warrant		—			—			6.4
Research and development credits		(16.0	)		—			(18.3	)
Change in valuation allowance		46.4			17.3			(42.0	)
Other, net		(1.4	)		4.5			2.7


Effective income tax rate		0.0	%		3.9	%		6.6	%

Schedule of deferred tax assets and (liabilities)

Deferred tax assets and (liabilities) are comprised of the following (in thousands):

	December 31,

	2012			2013
Deferred Tax Assets:
Reserves and accruals	$	3,396		$	2,146
Inventories		606			1,059
Net operating loss carryforwards		30,165			27,865
Property, plant and equipment		1,054			1,327
Stock-based compensation		783			1,233
Research and development credit carryforwards		3,254			4,091
Other		204			163


Total deferred tax assets		39,462			37,884
Valuation allowance		(39,462	)		(37,842	)


Total deferred tax assets	$	—		$	42
Deferred Tax Liabilities:
Undistributed earnings of foreign subsidiaries		—		$	(15	)
Property and equipment		—			(11	)


Total deferred tax liabilities	$	—		$	(26	)


Net deferred tax asset	$	—		$	16

Schedule of net operating loss and tax credit carryforwards

Net operating loss and tax credit carryforwards as of December 31, 2013 are as follows (in thousands):

	Amount		Expiration Years

Net operating losses, federal	$	77,435	2023 - 2031
Net operating losses, state		75,640	2018 - 2031
Tax credit carryforwards, federal		3,158	2023 - 2033
Tax credit carryforwards, state		1,413	2018 - 2028
Net operating losses, foreign		21	None

Schedule of reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties

The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties (in thousands):

	Years Ended December 31,

	2011		2012		2013
Balance at the beginning of the period	$	1,862	$	2,318	$	2,318
Current year additions		456		—		625


Balance at the end of the period	$	2,318	$	2,318	$	2,943