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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes from operations consisted of the following:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Current |  |  |  |  |
Federal | $ | 89,954 |  |  | $ | 90,703 |  |  | $ | 65,861 |
State | 24,323 |  |  | 25,347 |  |  | 19,515 |
Foreign | 15,824 |  |  | 12,544 |  |  | 7,641 |
Deferred |  |  |  |  |
Federal | (6,466) |  |  | (5,806) |  |  | 802 |
State | (860) |  |  | (801) |  |  | (169) |
Foreign | (215) |  |  | (7,917) |  |  | (1,548) |
| $ | 122,560 |  |  | $ | 114,070 |  |  | $ | 92,102 |
Income and loss from operations before income taxes for the years ended December 31, 2023, 2022, and 2021, respectively, consisted of the following:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Domestic | $ | 427,296 |  |  | $ | 437,506 |  |  | $ | 336,085 |
Foreign | 49,251 |  |  | 10,559 |  |  | 22,464 |
| $ | 476,547 |  |  | $ | 448,065 |  |  | $ | 358,549 |
As of December 31, 2023, the Company had $34.3 million of net operating loss carryforwards in various foreign taxing jurisdictions. Most of the tax losses can be carried forward indefinitely. As of December 31, 2023, and 2022, the Company has valuation allowances of $10.4 million and $11.2 million, respectively. The valuation allowance decreased by $0.8 million for the years ended December 31, 2023, and December 31, 2022, respectively. The decrease in the 2023 valuation allowances was primarily due to expiration of certain U.S. foreign tax credit. The decrease in the 2022 valuation allowances was primarily the result of exchange rate fluctuation. As of December 31, 2023, the Company asserts that its accumulated undistributed earnings generated by our foreign subsidiaries are permanently reinvested and as such, has not recognized a US deferred tax liability on its investment in foreign subsidiaries. The Company will continue to assess its permanent reinvestment assertion on a quarterly basis. Reconciliations between the statutory federal income tax rates and the Company’s effective income tax rates as a percentage of income before income taxes for its operations were as follows:
| Years Ended December 31,
(in thousands) | 2023 |  | 2022 |  | 2021
Federal tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal benefit | 3.8 | % |  | 4.4 | % |  | 4.3 | %
Change in U.S. tax rate applied to deferred taxes | 0.6 | % |  | — | % |  | — | %
True-up of prior year tax returns to tax provision | (0.1) | % |  | — | % |  | (0.1) | %
Difference between U.S. statutory and foreign local tax rates | 0.4 | % |  | 0.2 | % |  | 0.4 | %
Change in uncertain tax position | (0.6) | % |  | — | % |  | — | %
Other | 0.6 | % |  | (0.1) | % |  | 0.1 | %
Effective income tax rate | 25.7 | % |  | 25.5 | % |  | 25.7 | %
The tax effects of the significant temporary differences that constitute the deferred tax assets and liabilities as of December 31, 2023, and 2022, respectively, were as follows:
| As of December 31,
(in thousands) | 2023 |  | 2022
Deferred asset taxes |  |  |
State tax | $ | 1,606 |  |  | $ | 1,857 |
Health claims | 2,845 |  |  | 2,877 |
Inventories | 8,218 |  |  | 7,902 |
Sales incentive and advertising allowances | 1,997 |  |  | 2,191 |
Lease obligations | 17,880 |  |  | 14,827 |
Stock-based compensation | 3,962 |  |  | 2,251 |
Foreign tax credit carryforwards | 3,905 |  |  | 4,961 |
Non-United States tax loss carry forward | 5,882 |  |  | 6,557 |
Acquisition expense | 1,904 |  |  | 2,409 |
Capitalized research & development expenditures | 9,369 |  |  | 6,671 |
Other | 3,689 |  |  | 2,533 |
Total deferred tax assets | $ | 61,257 |  |  | $ | 55,036 |
Less valuation allowances | (10,430) |  |  | (11,180) |
Total deferred asset taxes | $ | 50,827 |  |  | $ | 43,856 |
Deferred tax liabilities |  |  |
Depreciation | $ | (23,484) |  |  | $ | (28,271) |
Goodwill and other intangibles amortization | (106,041) |  |  | (102,998) |
Right of use assets | (17,517) |  |  | (14,635) |
Hedging OCI | (1,386) |  |  | (10,284) |
Total deferred tax liabilities | (148,428) |  |  | (156,188) |
Total Deferred tax asset/(liability) | $ | (97,601) |  |  | $ | (112,332) |
A reconciliation of the beginning and ending amounts of unrecognized tax benefits in 2023, 2022 and 2021, respectively, were as follows, including foreign translation amounts:
Reconciliation of Unrecognized Tax Benefits | 2023 |  | 2022 |  | 2021
Balance as of January 1 | $ | 7,232 |  |  | $ | 944 |  |  | $ | 1,168 |
Additions based on tax positions related to prior years | 39 |  |  | 6,528 |  |  | 9 |
Reductions based on tax positions related to prior years | (103) |  |  | (38) |  |  | (47) |
Additions for tax positions of the current year | 463 |  |  | 73 |  |  | 3 |
Lapse of statute of limitations | (2,990) |  |  | (275) |  |  | (189) |
Balance as of December 31 | $ | 4,641 |  |  | $ | 7,232 |  |  | $ | 944 |
During 2023, the Company’s uncertain tax positions decreased by $3.0 million, primarily due to positions for open years of which were assumed in the Company’s acquisition of ETANCO. Tax positions of $2.0 million, $0.2 million, and $0.3 million are included in the balance of unrecognized tax benefits as of December 31, 2023, 2022, and 2021, respectively, which if recognized, would reduce the effective tax rate. The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense in accordance with the Company’s historical accounting policy. During the years ended December 31, 2023, 2022 and 2021, accrued interest decreased by $0.2 million, and increased by $0.7 million and an insignificant amount, respectively. The Company had accrued $0.7 million, $0.9 million and $0.2 million as of December 31, 2023, 2022 and 2021, respectively for the potential payment of interest and penalties before income tax benefits. The Company does not expect any material changes in unrecognized tax benefits within the next 12 months. As of December 31, 2023, the Company remained subject to federal income tax examinations in the U.S. for the tax years 2020 through 2023. In addition, tax years 2018 through 2023 remain open to examination in states, local and foreign jurisdictions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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