XML 27 R13.htm IDEA: XBRL DOCUMENT v3.22.0.1

INCOME TAXES

12 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

NOTE 5.           INCOME TAXES

The geographic distribution of pretax income from continuing operations was as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020			2019
Domestic	​	$	24,541	​	$	17,526	​	$	(20,597)
Foreign	​		124,170	​		140,621	​		87,791
​	​	$	148,711	​	$	158,147	​	$	67,194

​

The provision for income taxes from continuing operations is summarized as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020			2019
Current:		​			​			​
Federal	​	$	(2,468)	​	$	5,475	​	$	(9,627)
State	​		929	​		1,927	​		882
Foreign	​		14,217	​		16,216	​		18,429
Total current provision	​	​	12,678	​	​	23,618	​	​	9,684
​	​	​	​	​	​	​	​	​	​
Deferred:	​			​			​
Federal	​	​	762	​	​	(312)	​	​	3,822
State	​		(200)	​		1,270	​		(178)
Foreign	​		764	​		(1,580)	​		(2,629)
Total deferred provision (benefit)	​		1,326	​		(622)	​		1,015
Total provision for income taxes	​	$	14,004	​	$	22,996	​	$	10,699

​

Our effective tax rates differ from the U.S. federal statutory rate of 21% for the years ended December 31, 2021, 2020, and 2019 primarily due to the benefit of earnings in foreign jurisdictions which are subject to lower tax rates as well as reductions in uncertain tax positions and tax credits, offset by net U.S. tax on foreign operations, withholding taxes, and audit settlements.

​

The principal causes of the difference between the federal statutory rate and the effective income tax rate for each of the years below are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020			2019
Income taxes per federal statutory rate	​	$	31,229	​	$	33,211	​	$	14,111
State income taxes, net of federal deduction	​	​	534	​	​	2,793	​	​	10
U.S. tax on foreign operations	​	​	5,786	​	​	9,666	​	​	5,805
Foreign derived intangible income deduction	​	​	(3,927)	​	​	(4,070)	​	​	—
Tax effect of foreign operations	​	​	(11,520)	​	​	(20,527)	​	​	(13,086)
Uncertain tax positions	​	​	(6,899)	​	​	(3,215)	​	​	(4,487)
Audit settlements	​	​	7,764	​	​	—	​	​	—
Unremitted earnings	​	​	261	​	​	(567)	​	​	1,624
Tax credits	​	​	(6,149)	​	​	(2,292)	​	​	(2,088)
Change in valuation allowance	​	​	(73)	​	​	(1,175)	​	​	7,222
Withholding taxes	​	​	756	​	​	4,265	​	​	6,500
Executive compensation limitation	​	​	1,926	​	​	1,070	​	​	356
Other permanent items, net	​	​	(5,684)	​	​	3,837	​	​	(5,268)
Total provision for income taxes	​	$	14,004	​	$	22,996	​	$	10,699

​

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to be reversed. Significant deferred tax assets and liabilities consist of the following:

​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020
Deferred tax assets		​			​
Stock-based compensation	​	$	2,528	​	$	2,130
Net operating loss and tax credit carryforwards	​		54,210	​		57,590
Interest expense limitation	​	​	7,344	​	​	7,344
Pension obligation	​		10,778	​		14,297
Excess and obsolete inventory	​		3,325	​		3,722
Accrued restructuring	​	​	2,223	​	​	2,468
Deferred revenue	​		4,195	​		3,048
Employee bonuses and commissions	​		3,861	​		5,388
Amortization	​		26,358	​		28,786
Operating lease liabilities	​	​	19,405	​	​	20,267
Other	​		8,017	​		8,925
Deferred tax assets	​		142,244	​		153,965
Less: Valuation allowance	​		(42,051)	​		(46,702)
Net deferred tax assets	​		100,193	​		107,263
​	​	​	​	​	​	​
Deferred tax liabilities	​		​	​
Depreciation and amortization	​		37,515	​		40,266
Unremitted earnings	​		4,435	​		4,173
Operating lease right-of-use assets	​	​	17,558	​	​	18,731
Other	​		3,364	​		3,380
Deferred tax liabilities	​		62,872	​		66,550
Net deferred tax assets	​	$	37,321	​	$	40,713

​

Of the $37.3 million and $40.7 million net deferred tax asset on December 31, 2021 and 2020, respectively, $47.2 million and $50.8 million is reflected as a net non-current deferred tax asset and $9.9 million and $10.1 million is reflected as a long-term liability on December 31, 2021 and 2020, respectively.

As of December 31, 2021, we have recorded a valuation allowance on $4.0 million of our U.S. domestic deferred tax assets, largely attributable to state carryforward attributes that are expected to expire before sufficient income can be realized in those jurisdictions. The remaining valuation allowance on deferred tax assets approximates $38.0 million and is associated primarily with operations in Germany, Hong Kong, and Switzerland. As of December 31, 2021, there is not sufficient positive evidence to conclude that such deferred tax assets, presently reduced by a valuation allowance, will be recognized. The December 31, 2021 valuation allowance balance reflects a decrease of $4.7 million during the year. The change in the valuation allowance is primarily due to decreases from foreign exchange movements and current year activity.

As of December 31, 2021, we had U.S., foreign and state tax loss carryforwards of $56.9 million, $129.0 million, and $117.1 million, respectively. Additionally, we had $0.8 million and $30.5 million of capital loss and interest expense limitation carryforwards, respectively. Finally, we had U.S. and state tax credit carryforwards of $1.5 million and $1.7 million, respectively. The U.S. and state net operating losses, tax credits, and interest expense limitation are subject to various utilization limitations under Section 382 of the Internal Revenue Code and applicable state laws. These Section 382 limited attributes have various expiration periods through 2036 or, in the case of the interest expense limitation amount, no expiration period. Much of the foreign jurisdiction, and $8.0 million of the federal net operating loss carry forwards, have no expiration period.

We operate under a tax holiday in Singapore and China. These tax holidays are in effect through June 30, 2027 and December 31, 2022, respectively. The tax holiday is conditional upon our meeting certain employment and investment thresholds. The impact of the tax holidays decreased foreign taxes by $13.3 million and $13.0 million for 2021 and 2020, respectively. The benefit of the tax holiday on earnings per diluted share was $0.35 and $0.34 for 2021 and 2020, respectively.

As of December 31, 2021, we have undistributed earnings of certain foreign subsidiaries of approximately $32.4 million that we have indefinitely invested, and on which we have not recognized deferred taxes. Estimating the amount of potential tax is not practicable because of the complexity and variety of assumptions necessary to compute the tax.

We account for uncertain tax positions by applying a minimum recognition threshold to tax positions before recognizing these positions in the financial statements. The reconciliation of our total gross unrecognized tax benefits is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2021			2020			2019
Balance at beginning of period	​	$	9,673	​	$	13,009	​	$	13,162
Additions based on tax positions taken during a prior period	​		963	​		219	​		484
Additions based on tax positions taken during a prior period - acquisitions	​		—	​		—	​		4,479
Additions based on tax positions taken during the current period	​		566	​		—	​		—
Reductions based on tax positions taken during a prior period	​		—	​		—	​		(4,295)
Reductions related to a lapse of applicable statute of limitations	​		(4,575)	​		(3,555)	​		(821)
Reductions related to a settlement with taxing authorities	​		(1,114)	​		—	​		—
Balance at end of period	​	$	5,513	​	$	9,673	​	$	13,009

​

The unrecognized tax benefits of $5.5 million, if recognized, will impact our effective tax rate. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We had $0.4 million and $3.2 million of accrued interest and penalties on December 31, 2021 and 2020, respectively. With few exceptions, we are no longer subject to federal, state, or foreign income tax examinations by tax authorities for years before 2018.

X

- References

No definition available.

+ Details

Name:	us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Name:	us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration