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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Taxes |
Income Taxes | Note 18. Income Taxes ​ Income before income taxes is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, |
​ |  | 2022 |  | 2021 |  | 2020 |
​ | ​ | (in thousands) |
United States | ​ | $ | 198,028 | ​ | $ | 116,380 | ​ | $ | 51,934 | ​
Foreign | ​ |  | 6,857 | ​ |  | 4,048 | ​ |  | 3,952 | ​
Income before income taxes | ​ | $ | 204,885 | ​ | $ | 120,428 | ​ | $ | 55,886 | ​
​ ​ Provision for income taxes is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, |
​ |  | 2022 |  | 2021 |  | 2020 |
​ | ​ | (in thousands) |
Current: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
United States | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | 8,430 | ​ | $ | — | ​ | $ | — | ​
State | ​ |  | 1,716 | ​ |  | 82 | ​ |  | 157 | ​
Foreign | ​ |  | 3,124 | ​ |  | 1,439 | ​ |  | 1,062 | ​
Total current | ​ |  | 13,270 | ​ |  | 1,521 | ​ |  | 1,219 | ​
Deferred: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | ​ | 9,097 | ​ | ​ | 20,521 | ​ | ​ | 4,594 | ​
State | ​ | ​ | (102) | ​ | ​ | 406 | ​ | ​ | 295 | ​
Foreign | ​ |  | (459) | ​ |  | (670) | ​ |  | (204) | ​
Total deferred | ​ |  | 8,536 | ​ |  | 20,257 | ​ |  | 4,685 | ​
Income tax provision | ​ | $ | 21,806 | ​ | $ | 21,778 | ​ | $ | 5,904 | ​
​ Reconciliation of income taxes at the United States Federal statutory rate to the effective income tax rate of 10.6% is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, |
​ |  | 2022 |  | 2021 |  | 2020 |
​ | ​ | (in thousands) |
Income taxes at the United States statutory rate | ​ | $ | 43,026 | ​ | $ | 25,290 | ​ | $ | 11,736 | ​
State income taxes | ​ |  | 1,075 | ​ |  | 387 | ​ |  | 226 | ​
Effect of change in valuation allowance | ​ |  | 680 | ​ |  | (1,443) | ​ |  | 806 | ​
Foreign income tax rate differentials | ​ |  | 289 | ​ |  | 152 | ​ |  | 181 | ​
Stock based compensation | ​ |  | (3,818) | ​ |  | (3,658) | ​ |  | (2,803) | ​
Internal revenue code section 162(m) limitation | ​ | ​ | 2,692 | ​ | ​ | 1,481 | ​ | ​ | 409 | ​
Credit expirations | ​ | ​ | 1,181 | ​ | ​ | 2,342 | ​ | ​ | (14) | ​
Rate change | ​ | ​ | 94 | ​ | ​ | 159 | ​ | ​ | 151 | ​
Credit generation | ​ | ​ | (4,764) | ​ | ​ | (3,096) | ​ | ​ | (2,473) | ​
Discrete items, net | ​ | ​ | 206 | ​ | ​ | 72 | ​ | ​ | (147) | ​
Previously unrecognized tax benefit | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (4,063) | ​
GILTI inclusion | ​ | ​ | 69 | ​ | ​ | 301 | ​ | ​ | 732 | ​
Foreign-derived intangible income | ​ | ​ | (20,526) | ​ | ​ | — | ​ | ​ | — | ​
Other, net | ​ |  | 1,602 | ​ |  | (209) | ​ |  | 1,163 | ​
Income tax provision | ​ | $ | 21,806 | ​ | $ | 21,778 | ​ | $ | 5,904 | ​
​ Significant components of long-term deferred income taxes are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, |
​ | ​ | 2022 | ​ | 2021 |
​ |  | (in thousands) |
Deferred tax assets: | ​ | ​ |
Federal net operating loss carryforwards | ​ | $ | — | ​ | $ | 5,635 | ​
State net operating loss carryforwards | ​ |  | 291 | ​ |  | 727 | ​
Foreign net operating loss carryforwards | ​ |  | 276 | ​ |  | 371 | ​
Federal tax credit carryforwards | ​ |  | — | ​ |  | 18,840 | ​
State tax credit carryforwards | ​ |  | 8,683 | ​ |  | 8,138 | ​
Property, plant and equipment | ​ |  | 8,755 | ​ |  | 8,967 | ​
Operating lease liability | ​ | ​ | 1,564 | ​ | ​ | 792 | ​
Accrued compensation | ​ | ​ | 276 | ​ | ​ | 280 | ​
Inventories | ​ | ​ | 1,613 | ​ | ​ | 1,729 | ​
Stock compensation | ​ |  | 1,620 | ​ |  | 1,401 | ​
Warranty | ​ |  | 1,993 | ​ |  | 1,471 | ​
Deferred revenue | ​ | ​ | 4,501 | ​ | ​ | 836 | ​
Capitalized research and development costs | ​ | ​ | 18,067 | ​ | ​ | — | ​
Gross deferred tax assets | ​ | ​ | 47,639 | ​ | ​ | 49,187 | ​
Valuation allowance | ​ |  | (8,370) | ​ |  | (7,689) | ​
Net deferred tax assets | ​ | ​ | 39,269 | ​ | ​ | 41,498 | ​
Deferred tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Intangible assets | ​ |  | (176) | ​ |  | (72) | ​
Right-of-use asset | ​ | ​ | (5,400) | ​ | ​ | (4,918) | ​
Other | ​ |  | (1,992) | ​ |  | (1,054) | ​
Gross deferred tax liabilities | ​ |  | (7,568) | ​ |  | (6,044) | ​
Deferred taxes, net | ​ | $ | 31,701 | ​ | $ | 35,454 | ​
​ Changes in tax rates and tax laws are accounted for in the period of enactment. Our deferred tax assets and liabilities are measured at the enacted tax rate expected to apply when these temporary differences are expected to be realized or settled. At December 31, 2022, we had $31.7 million of net deferred tax assets worldwide relating to capitalized R&D costs and other temporary differences, which are available to reduce income taxes in future years. The decrease in our deferred tax assets from the prior year was primarily due to the utilization of our net operating losses, resulting in a decrease in deferred tax assets of $24.5 million, partially offset by a $18.1 million increase relating to capitalized R&D costs. At December 31, 2022, we maintained a $8.4 million valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these attributes. This represents an increase of $0.7 million from the prior year. At December 31, 2022, we had state net operating loss carryforwards of $0.3 million. State net operating losses will expire between 2023 and 2034. At December 31, 2022, we have foreign net operating loss carryforwards of $1.1 million. The majority of our foreign net operating losses have an unlimited carryforward period. ​ At December 31, 2022, we had research and development and other tax credit carryforwards of $12.4 million. These carry forwards are subject to an uncertain tax position reserve of $2.9 million. These credits can be used to reduce future federal and state income tax liabilities and expire principally between 2023 and 2035. ​ A provision of the Tax Cuts and Jobs Act (“TCJA”) took effect in 2022, creating a significant change to our treatment of research and experimental expenditures. Historically, businesses had the option of deducting R&D expenses in the year incurred or capitalizing and amortizing the costs over five years. The new TCJA provision eliminates this option and requires R&D expenses associated with research conducted in the U.S. to be capitalized and amortized over a five-year period. For expenses associated with research outside of the United States, R&D expenses are capitalized and amortized over a 15-year period. The Company has included the tax impact of capitalizing and amortizing these costs over the required periods in their tax provision for the year ended December 31, 2022. ​ ​ We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2022 to be indefinitely reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2022, the amount of cash associated with indefinitely reinvested foreign earnings was approximately $15.3 million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. We and most foreign subsidiaries are subject to income tax examinations by tax authorities for all years dating back to 2009. Our policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. We believe that we have appropriate support for the income tax positions taken and to be taken on our tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. At December 31, 2022, we had unrecognized tax benefits related to uncertain tax positions of $10.4 million, $7.2 million of which is recorded as a long-term liability, and the remainder of which reduced the Company’s state deferred tax assets and the offsetting valuation allowance. We recognized $1.8 million in interest and penalty expenses for the year ended December 31, 2022 relating to these uncertain tax positions. These unrecognized tax benefits, if recognized, would reduce the effective tax rate and also reverse associated accrued interest and penalty expenses. A reconciliation of the beginning and ending balance of unrecognized tax benefits are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | Year ended December 31, |
​ | ​ | 2022 | ​ | 2021 |  | 2020 |
​ | ​ | (in thousands) | ​
Balance at beginning of year | ​ | $ | 9,961 | ​ | $ | 10,044 | ​ | $ | 9,799 | ​
Decrease in unrecognized tax benefits as a result of tax positions taken during a prior period | ​ |  | (122) | ​ |  | (546) | ​ |  | (502) | ​
Decreases in unrecognized tax benefits related to settlements with tax authorities | ​ |  | (708) | ​ |  | — | ​ |  | — | ​
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitation | ​ | ​ | — | ​ | ​ | (472) | ​ | ​ | — | ​
Increases in unrecognized tax benefits as a result of tax positions taken during the current period | ​ |  | 1,312 | ​ |  | 935 | ​ |  | 747 | ​
Balance at end of year | ​ | $ | 10,443 | ​ | $ | 9,961 | ​ | $ | 10,044 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Recorded as other long-term liability | ​ | $ | 7,190 | ​ | $ | — | ​ | $ | 472 | ​
Recorded as a decrease in deferred tax assets | ​ |  | 3,253 | ​ |  | 9,961 | ​ |  | 9,572 | ​
Balance at end of year | ​ | $ | 10,443 | ​ | $ | 9,961 | ​ | $ | 10,044 | ​
​

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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