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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

 

(16)Income Taxes

 

The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions.

 

The Company assessed its uncertain tax positions and determined that it has no material uncertain tax position at December 31, 2022.

 

The components of income before income taxes consist of the following:

 

   Year ended December 31, 
   2022   2021   2020 
U.S. operations  $50,250   $34,742   $9,577 
Foreign operations   143,969    116,277    59,772 
                
   $194,219   $151,019   $69,349 

 

The provision for current and deferred income tax expense (benefit) consists of the following:

 

   Year ended December 31, 
   2022   2021   2020 
Current:            
Federal  $6,829   $4,825   $1,685 
State and local   658    518    90 
Foreign   39,458    36,164    17,024 
    46,945    41,507    18,799 
Deferred:               
Federal   (802)   4    (215)
State and local   (49)   11    44 
Foreign   (2,912)   (530)   753 
    (3,763)   (515)   582 
Total income tax expense  $43,182   $40,992   $19,381 

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

 

             
   December 31, 
   2022   2021 
Net deferred tax assets:          
Foreign net operating loss carry-forwards  $554   $1,292 
Inventory and accounts receivable   3,880    4,508 
Profit sharing   2,871    3,787 
Stock option compensation   716    732 
Effect of inventory profit elimination   9,342    5,112 
Other   266    407 
Total gross deferred tax assets, net   17,629    15,838 
Valuation allowance   (554)   (3,582)
Net deferred tax assets   17,075    12,256 
Deferred tax liabilities (long-term):          
Building expenses   (1,356)   (1,082)
Trademarks and licenses   (2,160)   (2,551)
Unrealized gain on marketable equity securities   (1,745)   (436)
Other   (655)   (251)
Total deferred tax liabilities   (5,916)   (4,320)
Net deferred tax assets  $11,159   $7,936 

 

Valuation allowances have been provided for deferred tax assets relating to foreign net operating loss carry-forwards as future profitable operations from certain foreign subsidiaries might not be sufficient to realize the full amount of the deferred tax assets.

 

No other valuation allowances have been provided as management believes that it is more likely than not that the asset will be realized in the reduction of future taxable income.

 

The Company estimated of the effect of global intangible low-taxed income (“GILTI”) and has determined that it has no tax liability related to GILTI as of December 31, 2022, 2021 and 2020. The Company also estimated the effect of foreign derived intangible income (“FDII”) and recorded a tax benefit of approximately $1.5 million, $0.9 million and $0.3 million as of December 31, 2022, 2021 and 2020, respectively.

 

The Company is no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years before 2019.

 

Differences between the United States federal statutory income tax rate and the effective income tax rate were as follows:

 

                       
   Year ended December 31, 
   2022   2021   2020 
Statutory rates   21.0%   21.0%   21.0%
State and local taxes, net of Federal benefit   0.2    0.3    0.2 
Windfall benefit from exercise of stock options   (0.4)   (0.9)   (0.6)
Benefit of Foreign Derived Intangible Income   (0.8)   (0.6)   (0.4)
Effect of foreign taxes greater than U.S. statutory rates   3.1    7.4    7.5 
Other   (0.9)   (0.1)   0.2 
Effective rates   22.2%   27.1%   27.9%