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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 8 Income Taxes The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related deferred tax assets and liabilities. Details of earnings before income taxes are as follows:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In thousands) |
Domestic |  | $ | 120,384 |  |  | $ | 83,680 |  |  | $ | 74,509 |
Foreign |  |  | 1,582 |  |  |  | 4,037 |  |  |  | 4,114 |
Total |  | $ | 121,966 |  |  | $ | 87,717 |  |  | $ | 78,623 |
The provision (benefit) for income taxes is as follows:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In thousands) |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 29,629 |  |  | $ | 20,089 |  |  | $ | 15,299 |
State |  |  | 8,147 |  |  |  | 4,720 |  |  |  | 3,556 |
Foreign |  |  | 1,242 |  |  |  | 2,031 |  |  |  | 1,939 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (7,376 | ) |  |  | (4,289 | ) |  |  | (1,774 | )
State |  |  | (1,332 | ) |  |  | (955 | ) |  |  | (600 | )
Foreign |  |  | (942 | ) |  |  | (375 | ) |  |  | (681 | )
Total |  | $ | 29,368 |  |  | $ | 21,221 |  |  | $ | 17,739 |
The provision for income tax differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate in each year due to the following items:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In thousands) |
Provision at statutory rate |  | $ | 25,613 |  |  | $ | 18,421 |  |  | $ | 16,511 |
State income taxes, net of federal tax benefit |  |  | 5,236 |  |  |  | 2,938 |  |  |  | 2,288 |
Valuation allowance |  |  | (78 | ) |  |  | 571 |  |  |  | 168 |
Foreign - tax rate differential and other |  |  | 340 |  |  |  | 388 |  |  |  | 606 |
Federal tax credits |  |  | (1,548 | ) |  |  | (1,016 | ) |  |  | (770 | )
Compensation subject to section 162(m) |  |  | 930 |  |  |  | 693 |  |  |  | 685 |
Stock based compensation |  |  | (967 | ) |  |  | (523 | ) |  |  | (1,510 | )
Other |  |  | (158 | ) |  |  | (251 | ) |  |  | (239 | )
Actual provision |  | $ | 29,368 |  |  | $ | 21,221 |  |  | $ | 17,739 |
The components of deferred income taxes as of December 31 are as follows:
|  | 2023 |  |  | 2022 |
|  | (In thousands) |
Deferred tax assets: |  |  |  |  |  |
Reserve for receivables and inventory |  | $ | 2,959 |  |  | $ | 2,972 |
Accrued compensation |  |  | 4,069 |  |  |  | 2,209 |
Reserves and payables |  |  | 2,509 |  |  |  | 2,340 |
Accrued post-retirement medical benefits |  |  | 971 |  |  |  | 1,054 |
Net operating loss and credit carryforwards |  |  | 4,948 |  |  |  | 2,827 |
Deferred compensation |  |  | 1,269 |  |  |  | 1,139 |
Accrued qualified plan benefits |  |  | 988 |  |  |  | 1,193 |
Accrued stock-based compensation |  |  | 1,166 |  |  |  | 1,120 |
Deferred revenue |  |  | 8,128 |  |  |  | 4,793 |
Operating lease liabilities |  |  | 1,071 |  |  |  | 1,262 |
Research and development costs |  |  | 5,744 |  |  |  | 2,625 |
Other |  |  | 1,359 |  |  |  | 987 |
Total gross deferred tax assets |  |  | 35,181 |  |  |  | 24,521 |
Less: valuation allowance |  |  | (2,683 | ) |  |  | (2,690 | )
Total net deferred tax assets |  |  | 32,498 |  |  |  | 21,831 |
Deferred tax liabilities: |  |  |  |  |  |
Property, plant and equipment |  |  | 4,323 |  |  |  | 4,454 |
Intangible assets |  |  | 8,361 |  |  |  | 7,247 |
Prepaids |  |  | 394 |  |  |  | 238 |
Operating lease assets |  |  | 1,020 |  |  |  | 1,258 |
Other |  |  | 746 |  |  |  | 525 |
Total deferred tax liabilities |  |  | 14,844 |  |  |  | 13,722 |
Net deferred tax assets |  | $ | 17,654 |  |  | $ | 8,109 |
As of December 31, 2023, the Company had U.S. federal net operating loss carryforwards of approximately $2.8 million, U.S. state net operating loss carryforwards of approximately $2.0 million, and foreign net operating loss carryforwards of approximately $13.7 million, of which $13.5 million have an unlimited carryforward period. The Company's tax credit carryforward of $0.6 million relates to state specific tax credits that the Company expects to fully utilize in future tax periods. The Company has recorded a full valuation allowance against certain deferred tax assets which are not likely to be realized. The valuation allowance relates primarily to foreign net operating loss carryforwards. In 2021, the Organization for Economic Cooperation and Development ("OEDC") released Pillar Two Global Anti-Base Erosion model rules, designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. The OECD continues to release guidance and countries are implementing legislation to adopt these rules, which are expected to be effective for accounting periods beginning on or after December 31, 2023. The United States has not yet enacted legislation implementing Pillar Two. The Company is continuing to evaluate the Pillar Two rules and their potential impact on future periods. Based on existing proposed rules, the Company does not meet the revenue requirements for the Pillar Two rules to apply. As a result, the Company does not expect the rules to have a material impact on its effective tax rate. In general, it is the Company's practice and intention to reinvest earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2023, the Company has not made a provision for incremental U.S. income taxes or additional foreign withholding taxes on approximately $15.8 million of such undistributed earnings, $14.4 million of which was previously subject to U.S. tax that is deemed indefinitely reinvested. Changes in the Company's gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows:
|  | 2023 |  |  | 2022 |
|  | (In thousands) |
Balance at beginning of year |  | $ | 1,039 |  |  | $ | 1,172 |
Increases (reductions) in unrecognized tax benefits as a result of positions taken during the prior year |  |  | 84 |  |  |  | (89 | )
Increases in unrecognized tax benefits as a result of positions taken during the current year |  |  | 485 |  |  |  | 231 |
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations |  |  | (213 | ) |  |  | (275 | )
Balance at end of year |  | $ | 1,395 |  |  | $ | 1,039 |
The Company does not expect a significant increase or decrease to the total amount of unrecognized tax benefits during the next twelve months. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2020, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2019. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. Accrued interest was approximately $0.1 million at both December 31, 2023 and 2022 and there were no penalties accrued in either year.

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