we intend for the following discussion of our financial condition and results of operations to provide information that will assist in understanding our consolidated financial statements , the changes in certain key items in those financial statements from period to period , and the primary factors that accounted for those changes , as well as how certain accounting principles , policies and estimates affect our consolidated financial statements . critical accounting policies and estimates the preparation of financial statements in conformity with accounting principles generally accepted in the united states of america requires us to make estimates and judgments that affect the reported amounts of assets and liabilities , disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . on an on-going basis , we evaluate our estimates and judgments , including those related to revenue recognition , allowances for sales returns and doubtful accounts , inventory valuation , our review for impairment of long-lived assets , intangible assets and goodwill , income taxes and stock-based compensation expense . actual results may differ from these judgments and estimates , and they may be adjusted as more information becomes available . any adjustment may be significant and may have a material impact on our consolidated financial position or results of operations . 25 an accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made , if different estimates reasonably may have been used , or if changes in the estimate that are reasonably likely to occur may materially impact the financial statements . management believes the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements . in addition to the accounting policies mentioned below , see `` item 8. financial statements and supplementary data — notes to consolidated financial statements — note 2 `` for other significant accounting policies . revenue recognition we recognize revenue on the sale of products when title of the goods has transferred , there is persuasive evidence of an arrangement ( such as a purchase order from the customer ) , the sales price is fixed or determinable and collectability is reasonably assured . a provision is recorded for estimated sales returns and allowances and is deducted from gross sales to arrive at net sales in the period the related revenue is recorded . these estimates are based on historical sales returns and allowances , analysis of credit memo data and other known factors . actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates . if actual or expected future returns and claims are significantly greater or lower than the reserves that we have established , we will record a reduction or increase to net revenues in the period in which we make such a determination . we accrue for discounts and rebates based on historical experience and our expectations regarding future sales to our customers . these accruals are recorded as a reduction to sales in the same period as the related revenues . changes in such accruals may be required if future rebates and incentives differ from our estimates . revenue for the sale of tooling is recognized when the related tooling has been provided , customer acceptance documentation has been obtained , the sales price is fixed or determinable and collectability is reasonably assured . we generate service revenue , which is paid monthly , as a result of providing consumer support programs to some of our customers through our call centers . these service revenues are recognized when services are performed , persuasive evidence of an arrangement exists ( such as when a signed agreement is received from the customer ) , the sales price is fixed or determinable , and collectability is reasonably assured . we license our intellectual property including our patented technologies , trademarks , and database of infrared codes . when our license fees are paid on a per unit basis we record license revenue when our customers ship a product incorporating our intellectual property , persuasive evidence of an arrangement exists , the sales price is fixed or determinable , and collectability is reasonably assured . when a fixed upfront license fee is received in exchange for the delivery of a particular database of infrared codes that represents the culmination of the earnings process , we record revenues when delivery has occurred , persuasive evidence of an arrangement exists , the sales price is fixed or determinable and collectability is reasonably assured . revenue for term license fees is recognized on a straight-line basis over the effective term of the license when we can not reliably predict in which periods , within the term of the license , the licensee will benefit from the use of our patented inventions . allowance for doubtful accounts we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make payments for products sold or services rendered . the allowance for doubtful accounts is estimated based on a variety of factors , including credit reviews , historical experience , length of time receivables are past due , current economic trends and changes in customer payment behavior . we also record specific provisions for individual accounts when we become aware of a customer 's inability to meet its financial obligations to us , such as in the case of bankruptcy filings or deterioration in the customer 's operating results or financial position . our historical reserves have been sufficient to cover losses from uncollectible accounts . story_separator_special_tag net sales in our business lines in 2014 increased by 6.6 % to $ 507.1 million from $ 475.7 million in 2013 . the increase was primarily due to an increase in remote control sales to consumer electronics companies in asia , an increase in licensing revenue , growth in sales of our embedded chip solutions to smart device manufacturers , and increased market share in european subscription broadcasting . net sales in our consumer lines ( one for all ® retail and private label ) were 9.8 % of net sales in 2014 compared to 10.1 % in 2013 . net sales in our consumer lines in 2014 increased by 2.8 % to $ 55.2 million from $ 53.7 million in 2013 . international retail sales increased 3.8 % from $ 49.6 million in 2013 to $ 51.5 million in 2014 due primarily to increased distribution in southern european countries and latin america as well as increased demand resulting from the 2014 fifa world cup . gross profit . gross profit in 2014 was $ 166.9 million compared to $ 151.5 million in 2013 . gross profit as a percent of sales increased to 29.7 % in 2014 from 28.6 % in 2013 . the gross margin percentage was favorably impacted by an increase in licensing revenue associated with the smart device channel and , to a lesser extent , the strengthening of the british pound compared to the u.s. dollar . partially offsetting these favorable items was an increase in sales to certain large customers that yield a lower gross margin than our company 's average . research and development ( `` r & d `` ) expenses . r & d expenses increased 3.2 % to $ 17.0 million in 2014 from $ 16.4 million in 2013 . this increase was in line with our strategic initiatives and was primarily driven by additional r & d efforts dedicated to developing new product offerings for new and existing product categories . selling , general and administrative ( `` sg & a `` ) expenses . sg & a expenses increased 5.6 % to $ 108.6 million in 2014 from $ 102.9 million in 2013 . this increase was driven primarily by increased incentive compensation costs as a result of our strong financial performance in the current year as well as an increase in external legal expenses related to patent litigation cases . in addition , in an effort to further support the smart device channel , we increased headcount within our global engineering team which resulted in higher payroll costs in 2014 . 29 interest income ( expense ) , net . net interest income was $ 11 thousand in 2014 compared net interest income of $ 51 thousand in 2013 . other income ( expense ) , net . net other expense was $ 0.8 million in 2014 compared to net other expense of $ 3.2 million in 2013 . this decrease was driven primarily by a decrease in foreign currency losses associated with fluctuations in foreign currency rates related to the chinese yuan renminbi , argentinian peso and brazilian real . income tax expense . income tax expense was $ 7.9 million in 2014 compared to $ 6.1 million in 2013 and our effective tax rate was 19.6 % in 2014 compared to 20.9 % in 2013 . the decrease in our effective tax rate was due primarily to the recording of $ 0.4 million of additional tax reserves in the second quarter of 2013 resulting from a tax audit in hong kong for years preceding our 2010 acquisition of enson assets limited . year ended december 31 , 2013 compared to year ended december 31 , 2012 ( `` 2012 `` ) net sales . net sales for 2013 were $ 529.4 million , an increase of 14.3 % compared to $ 463.1 million in 2012. net sales by our business and consumer lines were as follows : replace_table_token_7_th net sales in our business lines ( subscription broadcasting , oem , and computing companies ) were 89.9 % of net sales in 2013 compared to 88.7 % in 2012. net sales in our business lines in 2013 increased by 15.8 % to $ 475.7 million from $ 410.9 million in 2012. the increase was driven primarily by strong demand and increased market share in north american subscription broadcasting and latin american subscription broadcasting , particularly in brazil , as well as growth in net sales to consumer electronic companies in asia . net sales in our consumer lines ( one for all ® retail and private label ) were 10.1 % of net sales in 2013 compared to 11.3 % in 2012. net sales in our consumer lines in 2013 increased by 2.9 % to $ 53.7 million from $ 52.2 million in 2012. international retail sales increased 3.8 % from $ 47.8 million in 2012 to $ 49.6 million in 2013 due primarily to increased sales in the u.k , australia and latin america . gross profit . gross profit in 2013 was $ 151.5 million compared to $ 133.4 million in 2012. gross profit as a percent of sales remained relatively consistent at 28.6 % in 2013 compared to 28.8 % in 2012. factors that improved our gross margin percentage throughout 2013 include increasing the number of units produced internally versus at third-party manufacturers as well as increased license revenues , primarily in the fourth quarter , relating to the smart device channel . these improvements in our gross margin percentage were offset primarily by the strengthening of the chinese yuan renminbi versus the u.s. dollar . research and development expenses . r & d expenses increased 16.2 % to $ 16.4 million in 2013 from $ 14.2 million in 2012. this increase was in line with our strategic initiatives and was primarily driven by additional r & d efforts dedicated to developing new product offerings for new and existing product categories .

liquidity and capital resources sources and uses of cash replace_table_token_8_th replace_table_token_9_th net cash provided by operating activities increased $ 32.8 million in 2014 when compared to 2013 , primarily due to a $ 20.8 million increase in cash flows associated with operating assets and liabilities and a $ 9.6 million increase in net income . with respect to operating assets and liabilities , improved vendor management helped drive a $ 17.7 million increase in cash flows associated with accounts payable and accrued expenses . additionally , cash flows associated with inventories improved by $ 7.2 million as our inventory turns increased to 4.1 turns for 2014 , compared to 3.9 turns for 2013 , primarily as a result of more tightly managed inventory levels . net cash provided by operating activities decreased $ 12.9 million in 2013 when compared to 2012 , driven largely by an increase of $ 18.3 million in cash outflows associated with inventory as we increased inventory levels in 2013 to support a higher level of expected sales . we also experienced a $ 5.9 million decrease in cash flows associated with accounts payable due to the timing of payments . these cash outflows were partially offset by a $ 6.4 million increase in net income as well as a $ 4.5 million decrease in cash outflows associated with accounts receivable . with respect to accounts receivable , although net sales increased by 14.3 % in 2013 compared to 2012 , accounts receivable increased by only 4.8 % as days sales outstanding improved from 69 days for the quarter ended december 31 , 2012 to 63 days for the quarter ended december 31 , 2013. net cash used for investing activities during 2014 was $ 18.4 million compared to $ 11.7 million and $ 11.6 million of net cash used during 2013 and 2012 , respectively . during 2014 , 2013 and 2012 , cash used for investing activities consisted primarily of our investments in property , plant , and equipment as well as internally developed patents .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources sources and uses of cash replace_table_token_8_th replace_table_token_9_th net cash provided by operating activities increased $ 32.8 million in 2014 when compared to 2013 , primarily due to a $ 20.8 million increase in cash flows associated with operating assets and liabilities and a $ 9.6 million increase in net income . with respect to operating assets and liabilities , improved vendor management helped drive a $ 17.7 million increase in cash flows associated with accounts payable and accrued expenses . additionally , cash flows associated with inventories improved by $ 7.2 million as our inventory turns increased to 4.1 turns for 2014 , compared to 3.9 turns for 2013 , primarily as a result of more tightly managed inventory levels . net cash provided by operating activities decreased $ 12.9 million in 2013 when compared to 2012 , driven largely by an increase of $ 18.3 million in cash outflows associated with inventory as we increased inventory levels in 2013 to support a higher level of expected sales . we also experienced a $ 5.9 million decrease in cash flows associated with accounts payable due to the timing of payments . these cash outflows were partially offset by a $ 6.4 million increase in net income as well as a $ 4.5 million decrease in cash outflows associated with accounts receivable . with respect to accounts receivable , although net sales increased by 14.3 % in 2013 compared to 2012 , accounts receivable increased by only 4.8 % as days sales outstanding improved from 69 days for the quarter ended december 31 , 2012 to 63 days for the quarter ended december 31 , 2013. net cash used for investing activities during 2014 was $ 18.4 million compared to $ 11.7 million and $ 11.6 million of net cash used during 2013 and 2012 , respectively . during 2014 , 2013 and 2012 , cash used for investing activities consisted primarily of our investments in property , plant , and equipment as well as internally developed patents .
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 Suspicious Activity Report : we intend for the following discussion of our financial condition and results of operations to provide information that will assist in understanding our consolidated financial statements , the changes in certain key items in those financial statements from period to period , and the primary factors that accounted for those changes , as well as how certain accounting principles , policies and estimates affect our consolidated financial statements . critical accounting policies and estimates the preparation of financial statements in conformity with accounting principles generally accepted in the united states of america requires us to make estimates and judgments that affect the reported amounts of assets and liabilities , disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . on an on-going basis , we evaluate our estimates and judgments , including those related to revenue recognition , allowances for sales returns and doubtful accounts , inventory valuation , our review for impairment of long-lived assets , intangible assets and goodwill , income taxes and stock-based compensation expense . actual results may differ from these judgments and estimates , and they may be adjusted as more information becomes available . any adjustment may be significant and may have a material impact on our consolidated financial position or results of operations . 25 an accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made , if different estimates reasonably may have been used , or if changes in the estimate that are reasonably likely to occur may materially impact the financial statements . management believes the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements . in addition to the accounting policies mentioned below , see `` item 8. financial statements and supplementary data — notes to consolidated financial statements — note 2 `` for other significant accounting policies . revenue recognition we recognize revenue on the sale of products when title of the goods has transferred , there is persuasive evidence of an arrangement ( such as a purchase order from the customer ) , the sales price is fixed or determinable and collectability is reasonably assured . a provision is recorded for estimated sales returns and allowances and is deducted from gross sales to arrive at net sales in the period the related revenue is recorded . these estimates are based on historical sales returns and allowances , analysis of credit memo data and other known factors . actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates . if actual or expected future returns and claims are significantly greater or lower than the reserves that we have established , we will record a reduction or increase to net revenues in the period in which we make such a determination . we accrue for discounts and rebates based on historical experience and our expectations regarding future sales to our customers . these accruals are recorded as a reduction to sales in the same period as the related revenues . changes in such accruals may be required if future rebates and incentives differ from our estimates . revenue for the sale of tooling is recognized when the related tooling has been provided , customer acceptance documentation has been obtained , the sales price is fixed or determinable and collectability is reasonably assured . we generate service revenue , which is paid monthly , as a result of providing consumer support programs to some of our customers through our call centers . these service revenues are recognized when services are performed , persuasive evidence of an arrangement exists ( such as when a signed agreement is received from the customer ) , the sales price is fixed or determinable , and collectability is reasonably assured . we license our intellectual property including our patented technologies , trademarks , and database of infrared codes . when our license fees are paid on a per unit basis we record license revenue when our customers ship a product incorporating our intellectual property , persuasive evidence of an arrangement exists , the sales price is fixed or determinable , and collectability is reasonably assured . when a fixed upfront license fee is received in exchange for the delivery of a particular database of infrared codes that represents the culmination of the earnings process , we record revenues when delivery has occurred , persuasive evidence of an arrangement exists , the sales price is fixed or determinable and collectability is reasonably assured . revenue for term license fees is recognized on a straight-line basis over the effective term of the license when we can not reliably predict in which periods , within the term of the license , the licensee will benefit from the use of our patented inventions . allowance for doubtful accounts we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make payments for products sold or services rendered . the allowance for doubtful accounts is estimated based on a variety of factors , including credit reviews , historical experience , length of time receivables are past due , current economic trends and changes in customer payment behavior . we also record specific provisions for individual accounts when we become aware of a customer 's inability to meet its financial obligations to us , such as in the case of bankruptcy filings or deterioration in the customer 's operating results or financial position . our historical reserves have been sufficient to cover losses from uncollectible accounts . story_separator_special_tag net sales in our business lines in 2014 increased by 6.6 % to $ 507.1 million from $ 475.7 million in 2013 . the increase was primarily due to an increase in remote control sales to consumer electronics companies in asia , an increase in licensing revenue , growth in sales of our embedded chip solutions to smart device manufacturers , and increased market share in european subscription broadcasting . net sales in our consumer lines ( one for all ® retail and private label ) were 9.8 % of net sales in 2014 compared to 10.1 % in 2013 . net sales in our consumer lines in 2014 increased by 2.8 % to $ 55.2 million from $ 53.7 million in 2013 . international retail sales increased 3.8 % from $ 49.6 million in 2013 to $ 51.5 million in 2014 due primarily to increased distribution in southern european countries and latin america as well as increased demand resulting from the 2014 fifa world cup . gross profit . gross profit in 2014 was $ 166.9 million compared to $ 151.5 million in 2013 . gross profit as a percent of sales increased to 29.7 % in 2014 from 28.6 % in 2013 . the gross margin percentage was favorably impacted by an increase in licensing revenue associated with the smart device channel and , to a lesser extent , the strengthening of the british pound compared to the u.s. dollar . partially offsetting these favorable items was an increase in sales to certain large customers that yield a lower gross margin than our company 's average . research and development ( `` r & d `` ) expenses . r & d expenses increased 3.2 % to $ 17.0 million in 2014 from $ 16.4 million in 2013 . this increase was in line with our strategic initiatives and was primarily driven by additional r & d efforts dedicated to developing new product offerings for new and existing product categories . selling , general and administrative ( `` sg & a `` ) expenses . sg & a expenses increased 5.6 % to $ 108.6 million in 2014 from $ 102.9 million in 2013 . this increase was driven primarily by increased incentive compensation costs as a result of our strong financial performance in the current year as well as an increase in external legal expenses related to patent litigation cases . in addition , in an effort to further support the smart device channel , we increased headcount within our global engineering team which resulted in higher payroll costs in 2014 . 29 interest income ( expense ) , net . net interest income was $ 11 thousand in 2014 compared net interest income of $ 51 thousand in 2013 . other income ( expense ) , net . net other expense was $ 0.8 million in 2014 compared to net other expense of $ 3.2 million in 2013 . this decrease was driven primarily by a decrease in foreign currency losses associated with fluctuations in foreign currency rates related to the chinese yuan renminbi , argentinian peso and brazilian real . income tax expense . income tax expense was $ 7.9 million in 2014 compared to $ 6.1 million in 2013 and our effective tax rate was 19.6 % in 2014 compared to 20.9 % in 2013 . the decrease in our effective tax rate was due primarily to the recording of $ 0.4 million of additional tax reserves in the second quarter of 2013 resulting from a tax audit in hong kong for years preceding our 2010 acquisition of enson assets limited . year ended december 31 , 2013 compared to year ended december 31 , 2012 ( `` 2012 `` ) net sales . net sales for 2013 were $ 529.4 million , an increase of 14.3 % compared to $ 463.1 million in 2012. net sales by our business and consumer lines were as follows : replace_table_token_7_th net sales in our business lines ( subscription broadcasting , oem , and computing companies ) were 89.9 % of net sales in 2013 compared to 88.7 % in 2012. net sales in our business lines in 2013 increased by 15.8 % to $ 475.7 million from $ 410.9 million in 2012. the increase was driven primarily by strong demand and increased market share in north american subscription broadcasting and latin american subscription broadcasting , particularly in brazil , as well as growth in net sales to consumer electronic companies in asia . net sales in our consumer lines ( one for all ® retail and private label ) were 10.1 % of net sales in 2013 compared to 11.3 % in 2012. net sales in our consumer lines in 2013 increased by 2.9 % to $ 53.7 million from $ 52.2 million in 2012. international retail sales increased 3.8 % from $ 47.8 million in 2012 to $ 49.6 million in 2013 due primarily to increased sales in the u.k , australia and latin america . gross profit . gross profit in 2013 was $ 151.5 million compared to $ 133.4 million in 2012. gross profit as a percent of sales remained relatively consistent at 28.6 % in 2013 compared to 28.8 % in 2012. factors that improved our gross margin percentage throughout 2013 include increasing the number of units produced internally versus at third-party manufacturers as well as increased license revenues , primarily in the fourth quarter , relating to the smart device channel . these improvements in our gross margin percentage were offset primarily by the strengthening of the chinese yuan renminbi versus the u.s. dollar . research and development expenses . r & d expenses increased 16.2 % to $ 16.4 million in 2013 from $ 14.2 million in 2012. this increase was in line with our strategic initiatives and was primarily driven by additional r & d efforts dedicated to developing new product offerings for new and existing product categories .

