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Income Taxes | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The jurisdictional components of income before taxes consist of the following:
|  | December 31,
(in thousands) |  | 2015 |  | 2014 |  | 2013
Income before income taxes: |  |  |  |  |  |
Domestic |  | $ | 52,313 |  |  | $ | 43,345 |  |  | $ | 35,146 |
Foreign |  | 14,554 |  |  | 17,260 |  |  | 16,242 |
|  | $ | 66,867 |  |  | $ | 60,605 |  |  | $ | 51,388 |
The components of income tax expense (benefit) consist of the following:
|  | December 31,
(in thousands) |  | 2015 |  | 2014 |  | 2013
Current: |  |  |  |  |  |
Domestic |  | $ | 13,293 |  |  | $ | 13,495 |  |  | $ | 10,605 |
Foreign |  | 4,614 |  |  | 3,382 |  |  | 3,200 |
State |  | 2,947 |  |  | 2,685 |  |  | 2,366 |
|  | 20,854 |  |  | 19,562 |  |  | 16,171 |
Deferred: |  |  |  |  |  |  |  |  |
Domestic |  | 3,481 |  |  | (600 | ) |  | (1,074 | )
Foreign |  | (718 | ) |  | 540 |  |  | 249 |
State |  | 41 |  |  | (48 | ) |  | (52 | )
|  | 2,804 |  |  | (108 | ) |  | (877 | )
Total income taxes |  | $ | 23,658 |  |  | $ | 19,454 |  |  | $ | 15,294 |
The difference between income tax expense (benefit) for financial statement purposes and the amount of income tax expense computed by applying the domestic statutory income tax rate of 35% to income before income taxes consist of the following:
|  | December 31,
(in thousands) |  | 2015 |  | 2014 |  | 2013
Domestic statutory rate at 35% |  | $ | 23,403 |  |  | $ | 21,212 |  |  | $ | 17,985 |
Increase (reduction) from: |  |  |  |  |  |  |  |  |
Jurisdictional rate differences |  | (2,192 | ) |  | (2,119 | ) |  | (1,959 | )
Valuation allowance |  | 797 |  |  | 353 |  |  | (114 | )
Stock based compensation |  | 257 |  |  | 199 |  |  | 136 |
U.S. state taxes |  | 1,942 |  |  | 1,649 |  |  | 1,496 |
Domestic production deduction |  | (518 | ) |  | (1,321 | ) |  | (1,162 | )
R&D credit |  | (475 | ) |  | (614 | ) |  | (856 | )
Other, net |  | 444 |  |  | 95 |  |  | (232 | )
Provision for income taxes |  | $ | 23,658 |  |  | $ | 19,454 |  |  | $ | 15,294 |
Effective tax rate |  | 35 | % |  | 32 | % |  | 30 | %
Deferred income taxes arise from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. The components of the Company’s deferred income tax assets and liabilities consist of the following:
|  | December 31,
(in thousands) |  | 2015 |  | 2014
Deferred income tax assets: |  |  |  |
Inventory basis difference |  | $ | 2,241 |  |  | $ | 1,051 |
Accounts receivable reserve |  | 529 |  |  | 394 |
Depreciation |  | 110 |  |  | — |
Stock based compensation |  | 968 |  |  | 1,284 |
Pension liability |  | 2,481 |  |  | 3,018 |
Employee benefit accrual |  | 2,038 |  |  | 1,448 |
Product liability and warranty reserves |  | 1,517 |  |  | 1,480 |
Expenses not currently deductible for tax purposes |  | 60 |  |  | 410 |
Foreign net operating loss |  | 2,726 |  |  | 1,379 |
State net operating loss |  | 49 |  |  | 10 |
Other |  | 194 |  |  | — |
Total deferred income tax assets |  | $ | 12,913 |  |  | $ | 10,474 |
Less: Valuation allowance |  | (1,651 | ) |  | (1,064 | )
Net deferred income tax assets |  | $ | 11,262 |  |  | $ | 9,410 |
Deferred income tax liabilities: |  |  |  |  |  |
Inventory basis differences |  | $ | (310 | ) |  | $ | — |
Depreciation |  | (4,624 | ) |  | (2,786 | )
Intangible assets |  | (7,934 | ) |  | (2,144 | )
Deferred revenue |  | — |  |  | 38 |
Expenses not currently deductible for tax purposes |  | (642 | ) |  | (356 | )
Total deferred income tax liabilities |  | $ | (13,510 | ) |  | $ | (5,248 | )
Net deferred income tax liabilities and assets |  | $ | (2,248 | ) |  | $ | 4,162 |
As of December 31, 2015, the Company had foreign deferred tax assets consisting of foreign net operating losses and other tax benefits available to reduce future taxable income in a foreign jurisdiction. These foreign jurisdictions’ net operating loss carryforwards are in the approximate amount of $7,400,000 with an unlimited carryforward period, and $1,700,000 with a carry forward expiring in 2035. The Company also has U.S. state net operating loss carryforwards in the amount of $100,000 which will expire between 2015 to 2028. The company recorded a valuation allowance as of December 31, 2015 and 2014 due to uncertainties related to the ability to utilize some of the deferred income tax assets, primarily consisting of certain U.S. state NOLs and income tax credits, and international NOLs, before they expire. The valuation allowance is based on estimates of taxable income in the various jurisdictions in which we operate and the period over which deferred income tax assets will be recoverable. The realization of net deferred income tax assets recorded as of December 31, 2015 is primarily dependent upon the ability to generate future taxable income in certain U.S. states and international jurisdictions. Deferred income taxes have not been provided on the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and the respective tax bases of the Company’s foreign subsidiaries, based on the determination that such differences are essentially permanent in duration in that the earnings of the subsidiaries are expected to be indefinitely reinvested in foreign operations. As of December 31, 2015, the cumulative undistributed earnings of these subsidiaries approximated $162,526,000. If these earnings were not considered indefinitely reinvested, deferred income taxes would have been recorded after the consideration of foreign tax credits. At this time, it is not practicable to estimate the amount of additional income taxes that might be payable on those earnings, if distributed. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that the net of deferred tax assets and liabilities be classified as non-current on the balance sheet by jurisdiction rather than being separately presented as current and non-current portions. We are required to adopt the new standard beginning with our first quarterly filing in 2017; however, early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred tax assets and liabilities. On December 31, 2015, we elected to early adopt ASU No. 2015-17 prospectively, thus reclassifying $6,500,000 of current deferred tax assets and $300,000 of current deferred tax liabilities to non-current on the accompanying consolidated balance sheet. The prior reporting period was not retrospectively adjusted. The Company adopted the provisions of FASB ASC Section 740-10-25 (formerly FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”) on January 1, 2007. Unrecognized tax benefits in the amount of $301,000 and $388,000 for 2015 and 2014, respectively, are included in other non-current liabilities on the balance sheet. The unrecognized tax benefits, if recognized, would favorably impact our effective tax rate in a future period. We do not expect our unrecognized tax benefits disclosed above to change significantly over the next 12 months.
|  | December 31,
|  | 2015 |  | 2014
Balance as of beginning of year |  | $ | 388,000 |  |  | $ | 146,000 |
Additions for tax positions related to the current year |  | 63,000 |  |  | 63,000 |
Additions for tax positions related to prior years |  | — |  |  | 262,000 |
Reduction due to lapse of statute of limitations |  | (150,000 | ) |  | (83,000 | )
Balance as of end of year |  | $ | 301,000 |  |  | $ | 388,000 |
The Company adopted the policy to include interest and penalty expense related to income taxes as interest and other expense, respectively. As of December 31, 2015, $36,000 of interest and penalties have been accrued. We operate in multiple tax jurisdictions, both inside and outside the United States and are currently under audit by certain state and foreign tax authorities. In general, the tax years 2012 through 2015 remain open in the major taxing jurisdictions, with some state and foreign jurisdictions remaining open longer, as the result of net operating losses and longer statutes of limitation periods.

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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