Support.com 2011 Annual Report Download - page 64

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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
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Balance at beginning of year $ 3,776 $ 3,706 $ 2,361
Increase related to prior year tax positions — 226 1,331
Decrease related to prior year tax positions (494) (5) —
Increase related to current year tax positions 55 63 211
Settlements with tax authorities — — (90)
Decrease related to lapse of statute of limitations (127) (214) (107)
Balance at end of year $ 3,210 $ 3,776 $ 3,706
The Company’s total amounts of unrecognized tax benefits that, if recognized, that would affect its tax rate are $0.6 million and $0.8 million as
of December 31, 2011 and 2010, respectively.
With the adoption of ASC 740-10, the Company’s policy to include interest and penalties related to unrecognized tax benefits within its
provision for (benefit from) income taxes did not change. The Company had $91,000 accrued for payment of interest and penalties related to
unrecognized tax benefit as of December 31, 2011. The company had $117,000 and $121,000 accrued for payment of interest and penalties related to
unrecognized tax benefit as of December 31, 2010 and 2009, respectively. The Company recognized $28,000 of interest and penalties related to
unrecognized tax benefits during the year ended December 31, 2011.
As of December 31, 2011, the amount of recognized tax benefit where it is reasonably possible that a significant change may occur in the next
12 months is approximately $143,000. The change would result from expiration of a statute of limitations in a foreign jurisdiction.
The Company and its subsidiaries are subject to United States federal income tax, as well as income tax in multiple state and foreign
jurisdictions. The tax returns for the years 1998 to 2011 remain subject to examination.
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Selected quarterly financial information for 2011 and 2010 is as follows:
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Revenue:
Services $ 9,150 $ 8,442 $ 8,532 $ 11,124
Software and other 3,880 5,012 3,818 3,881
Total revenue 13,030 13,454 12,350 15,005
Cost of revenue:
Cost of services 6,817 6,601 7,917 8,584
Cost of software and other 404 433 458 449
Total cost of revenue 7,221 7,034 8,375 9,033
Gross profit 5,809 6,420 3,975 5,972
Operating expenses:
Research and development 1,448 1,433 1,577 1,599
Sales and marketing 4,785 5,543 5,954 5,509
General and administrative 2,786 3,439 3,074 2,706
Amortization of intangible assets 83 122 330 331
Total operating expenses 9,102 10,537 10,935 10,145
Loss from operations (3,293) (4,117) (6,960) (4,173)
Interest income and other, net 150 125 96 84
Loss from continuing operations, before income taxes (3,143) (3,992) (6,864) (4,089)
Income tax provision 2 29 264 106
Loss from continuing operations, after income taxes (3,145) (4,021) (7,128) (4,195)
Income (loss) from discontinued operations, after income taxes 3 (18) 18 (154)
Net loss $ (3,142) $ (4,039) $ (7,110) $ (4,349)
Basic and diluted earnings per share:
Loss from continuing operations $ (0.07) $ (0.08) $ (0.15) $ (0.09)
Income (loss) from discontinued operations 0.00 (0.00) 0.00 (0.00)
Basic and diluted net loss per share $ (0.07) $ (0.08) $ (0.15) $ (0.09)
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