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Income Taxes: | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income from continuing operations before taxes consisted of the following (in thousands):
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
United States |  | $ | 59,872 |  |  | $ | 80,714 |  |  | $ | 74,288 |
Foreign |  | (8,589 | ) |  | 4,450 |  |  | (4,589 | )
|  | $ | 51,283 |  |  | $ | 85,164 |  |  | $ | 69,699 |
The (benefit) provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,774 |  |  | $ | 21,123 |  |  | $ | 18,601 |
State |  | 2,263 |  |  | 2,347 |  |  | 745 |
Foreign |  | 3,170 |  |  | 1,118 |  |  | 1,426 |
|  | 8,207 |  |  | 24,588 |  |  | 20,772 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  | $ | (20,878 | ) |  | $ | (2,045 | ) |  | $ | 4,524 |
State |  | (4,619 | ) |  | (767 | ) |  | (960 | )
Foreign |  | (71 | ) |  | 304 |  |  | 378 |
|  | (25,568 | ) |  | (2,508 | ) |  | 3,942 |
|  | $ | (17,361 | ) |  | $ | 22,080 |  |  | $ | 24,714 |
Current income taxes payable were reduced from the amounts in the above table by $9.3 million in 2015, equal to the direct tax benefit that we receive upon exercise of stock options and the vesting of restricted stock units by employees and directors. We have accrued for tax contingencies for potential tax assessments, and in 2017 we recognized a $3.0 million net increase, most of which related to various federal and state tax reserves. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into legislation, which includes a broad range of provisions affecting businesses. The Tax Act significantly revises how companies compute their U.S. corporate tax liability by, among other provisions, reducing the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, implementing a territorial tax system, and requiring a mandatory one-time tax on U.S. owned undistributed foreign earnings and profits known as the toll charge or transition tax. Pursuant to the SEC Staff Accounting Bulletin ("SAB") No. 118, "Income Tax Accounting Implications of the Tax Cuts and Jobs Act" ("SAB 118"), a company selects between one of three scenarios to reflect the impact of the Tax Act in its financial statements within a measurement period. Those scenarios are (i) a final estimate which effectively closes the measurement period; (ii) a reasonable estimate leaving the measurement period open for future revisions; and (iii) no estimate as the law is still being analyzed in which case a company continues to apply its accounting on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. SAB 118 allows for the reporting provisional amounts for certain income tax effects in scenario (ii) and (iii). The measurement period begins in the reporting period that includes the Act’s enactment date and ends when an entity has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. We were able to provide a reasonable estimate for the revaluation of deferred taxes and the effects of the toll charge on undistributed foreign earnings and profits, with our measurement period open for future revisions. As such, we recorded a provisional tax expense in the amount of $1.1 million and a provisional tax expense in the amount of $2.0 million related to the revaluation of deferred taxes and the toll charge, respectively. We are still evaluating various international provisions included in the Tax Act and have therefore not completed our assessment. These provisions include, but are not limited to, the anti-base-erosion and anti-abuse tax regime (BEAT), the global intangible low-taxed income (GILTI) provisions, the foreign derived intangible income (FDII) provisions, and the changes to the deductibility of interest. These provisions will be effective for us beginning on January 1, 2018, and may materially impact our effective tax rate in future years. A reconciliation of the provision for income taxes at the statutory rate to our effective tax rate is as follows (dollars in thousands):
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
|  | Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Federal tax at the expected statutory rate |  | $ | 17,950 |  |  | 35.0 | % |  | $ | 29,807 |  |  | 35.0 | % |  | $ | 24,395 |  |  | 35.0 | %
State income tax, net of federal effect |  | (403 | ) |  | (0.8 | )% |  | 1,795 |  |  | 2.1 | % |  | 2,661 |  |  | 3.9 | %
Tax credits |  | (2,783 | ) |  | (5.4 | )% |  | (1,014 | ) |  | (1.2 | )% |  | (5,861 | ) |  | (8.4 | )%
Foreign income tax differential |  | 3,481 |  |  | 6.8 | % |  | (135 | ) |  | (0.1 | )% |  | 3,412 |  |  | 4.9 | %
Stock based compensation |  | (18,958 | ) |  | (37.0 | )% |  | (7,720 | ) |  | (9.1 | )% |  | — |  |  | — | %
Impact of the Tax Act |  | 3,076 |  |  | 6.0 | % |  | — |  |  | — | % |  | — |  |  | — | %
IP installment sale |  | 3,367 |  |  | 6.6 | % |  | — |  |  | — | % |  | — |  |  | — | %
Bargain purchase gain |  | (24,811 | ) |  | (48.4 | )% |  | — |  |  | — | % |  | — |  |  | — | %
Other |  | 1,720 |  |  | 3.4 | % |  | (653 | ) |  | (0.8 | )% |  | 107 |  |  | 0.1 | %
|  | $ | (17,361 | ) |  | (33.8 | )% |  | $ | 22,080 |  |  | 25.9 | % |  | $ | 24,714 |  |  | 35.5 | %
Tax credits in 2017, 2016 and 2015 consist principally of research and developmental tax credits. The components of our deferred income tax assets (liabilities) are as follows (in thousands):
|  | December 31,
|  | 2017 |  | 2016
Deferred tax asset: |  |  |  |  |  |
Foreign |  | $ | — |  |  | $ | 1,223 |
Accruals/other |  | 8,368 |  |  | 857 |
Acquired future tax deductions |  | 10,580 |  |  | 6,473 |
Stock-based compensation |  | 8,633 |  |  | 11,089 |
Foreign currency translation adjustments |  | 3,425 |  |  | 5,175 |
Tax credits state |  | 8,471 |  |  | 6,764 |
Foreign tax credits |  | 2,749 |  |  | — |
Inventory reserves |  | 10,658 |  |  | 1,938 |
Allowance for doubtful accounts |  | 636 |  |  | 151 |
Valuation allowance |  | (7,385 | ) |  | — |
|  | $ | 46,135 |  |  | $ | 33,670 |
Deferred tax liability: |  |  |  |  |  |
State income taxes |  | $ | 1,640 |  |  | $ | 1,708 |
Foreign |  | 202 |  |  | 1,370 |
Depreciation and amortization |  | 21,005 |  |  | 10,027 |
|  | $ | 22,847 |  |  | $ | 13,105 |
Deferred tax asset, net |  | $ | 23,288 |  |  | $ | 20,565 |
Tax Holidays and Carryforwards Acquired future tax deductions consist of: (a) the net tax benefit of items expensed for financial statement purposes but capitalized and amortized for tax purposes, (b) the total tax benefited portion of the federal net operating loss ("NOL") carry-forwards of $4.9 million which will expire at various dates from 2020 to 2035 and (c) the net tax benefited portion of the foreign NOLs of $1.1 million, consisting of a NOL of $6.6 million with a valuation allowance of $5.5 million. Under Section 382 of the Internal Revenue Code, certain ownership changes limit the utilization of the NOL carry-forwards, and the amount of federal NOL carry-forwards recorded is the net federal benefit available. Other carryforwards include research and development (“R&D”) state tax credit carryforwards of $9.5 million and $0.3 million for California and Utah, respectively, and a foreign tax credit carryforward of $2.7 million. A substantial portion of our manufacturing operations in Costa Rica operate under various tax holidays and tax incentive programs which will expire in whole or in part in 2027. Certain of the holidays and may be extended if specific conditions are met. The net impact of these tax holidays and tax incentives was an increase to our net earnings by $5.7 million or $0.27 per diluted share in 2017. Foreign currency translation adjustments, and related tax effects, are an element of “other comprehensive income” and are not included in net income other than the revaluation of the associated deferred tax asset due to the Tax Act. As of December 31, 2017, we had estimated $24 million of undistributed foreign earnings and profits. Pursuant to the Tax Act, our undistributed foreign earnings and profits were deemed repatriated as of December 31, 2017. We have not provided deferred tax liabilities for foreign withholding taxes and certain state income taxes on the undistributed earnings and profits from certain non-U.S. subsidiaries that will be permanently reinvested outside the United States. Upon the distribution of foreign earnings and profits, certain foreign countries impose withholding taxes, subject to certain limitations, for use as credits against our U.S. tax liability, if any. If the foreign earnings and profits were distributed, we would need to accrue an additional income tax liability. However, we may also be allowed a credit against substantially all our U.S. tax liability for the taxes paid in foreign jurisdictions. We are subject to taxation in the United States and various states and foreign jurisdictions. Our United States federal income tax returns for tax years 2014 and forward are subject to examination by the Internal Revenue Service. Our principal state income tax returns for tax years 2012 and forward are subject to examination by the state tax authorities. The total gross amount of unrecognized tax benefits as of December 31, 2017 was $6.5 million which, if recognized, would impact the effective tax rate. We believe that adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. As of December 31, 2017, it is not possible to estimate the amount of change, if any, in the unrecognized tax benefits that is reasonably possible within the next twelve months. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. We have not accrued any penalties or interest as of December 31, 2017 or December 31, 2016 The following table summarizes our cumulative gross unrecognized tax benefits (in thousands):
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
Beginning balance |  | $ | 2,000 |  |  | $ | 1,772 |  |  | $ | 4,115 |
Increases to prior year tax positions |  | 77 |  |  | 77 |  |  | 25 |
Increases due to acquisitions |  | 640 |  |  | — |  |  | — |
Increases to current year tax positions |  | 3,992 |  |  | 345 |  |  | 345 |
Decreases to prior year tax positions |  | (12 | ) |  | (46 | ) |  | (2,399 | )
Decrease related to settlements |  | — |  |  | — |  |  | (314 | )
Decrease related to lapse of statute of limitations |  | (170 | ) |  | (148 | ) |  | — |
Ending balance |  | $ | 6,527 |  |  | $ | 2,000 |  |  | $ | 1,772 |

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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