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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The components of income before taxes from continuing operations consisted of the following for the years ended December 31 (in thousands):
| 2023 |  | 2022 |  | 2021
Domestic | $ | 149,348 |  |  | $ | 112,635 |  |  | $ | 93,155 |
Foreign | (356) |  |  | (1,145) |  |  | 6,407 |
Income before taxes from continuing operations | $ | 148,992 |  |  | $ | 111,490 |  |  | $ | 99,562 |
The provision for income taxes from continuing operations for the years ended December 31 consisted of the following (in thousands):
| 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
U.S. Federal | $ | 21,579 |  |  | $ | 17,014 |  |  | $ | 16,137 |
State | 6,048 |  |  | 5,647 |  |  | 5,009 |
Foreign | 32 |  |  | 86 |  |  | 932 |
Total current | 27,659 |  |  | 22,747 |  |  | 22,078 |
Deferred: |  |  |  |  |
U.S. Federal | 8,617 |  |  | 5,259 |  |  | 1,766 |
State | 2,112 |  |  | 1,381 |  |  | 134 |
Foreign | 71 |  |  | (303) |  |  | 1,068 |
Total deferred | 10,800 |  |  | 6,337 |  |  | 2,968 |
Provision for income taxes | $ | 38,459 |  |  | $ | 29,084 |  |  | $ | 25,046 |
The provision for income taxes from continuing operations differs from the federal statutory rate of 21% due to the following for the years ended December 31 (in thousands, except for percentages) :
| 2023 |  | 2022 |  | 2021
Statutory rate | $ | 31,288 |  |  | 21.0 | % |  | $ | 23,413 |  |  | 21.0 | % |  | $ | 20,908 |  |  | 21.0 | %
State taxes, less federal effect | 6,446 |  |  | 4.3 | % |  | 5,541 |  |  | 5.0 | % |  | 4,068 |  |  | 4.1 | %
Federal tax credits | (787) |  |  | (0.5) | % |  | (549) |  |  | (0.5) | % |  | (587) |  |  | (0.6) | %
Excess tax benefit on stock based compensation | (203) |  |  | (0.1) | % |  | (214) |  |  | (0.2) | % |  | (2,039) |  |  | (2.0) | %
Executive compensation | 1,369 |  |  | 0.9 | % |  | 960 |  |  | 0.9 | % |  | 1,781 |  |  | 1.8 | %
Other | 346 |  |  | 0.2 | % |  | (67) |  |  | (0.1) | % |  | 915 |  |  | 0.9 | %
| $ | 38,459 |  |  | 25.8 | % |  | $ | 29,084 |  |  | 26.1 | % |  | $ | 25,046 |  |  | 25.2 | %
Deferred tax liabilities at December 31 consisted of the following (in thousands):
| 2023 |  | 2022
Depreciation | $ | 13,838 |  |  | $ | 14,570 |
Goodwill | 65,967 |  |  | 62,132 |
Operating leases | 11,325 |  |  | 6,775 |
Intangible assets | 1,919 |  |  | 3,706 |
Other | 1,264 |  |  | 1,358 |
Gross deferred tax liabilities | 94,313 |  |  | 88,541 |
Capitalized research and development costs | (6,286) |  |  | (4,503) |
Equity compensation | (6,907) |  |  | (5,993) |
Operating leases | (11,678) |  |  | (7,076) |
Assets held for sale | — |  |  | (13,669) |
Capital loss carryforward | (26,527) |  |  | (26,490) |
Other | (12,422) |  |  | (10,417) |
Gross deferred tax assets | (63,820) |  |  | (68,148) |
Valuation allowances | 26,593 |  |  | 26,488 |
Deferred tax assets, net of valuation allowances | (37,227) |  |  | (41,660) |
Net deferred tax liabilities | $ | 57,086 |  |  | $ | 46,881 |
At December 31, 2023, the Company had total net operating loss carry forwards of $17.5 million, which included $0.3 million for federal, $16.5 million for state, and $0.7 million for foreign income tax purposes. The federal and state net operating loss carry forwards expire between 2024 and 2043. The foreign net operating loss carry forwards expire between 2024 and 2043. The Company recognized a total of $1.1 million of deferred tax assets, net of the federal tax benefit, related to these net operating losses prior to any valuation allowances, which included $0.1 million of federal and $0.8 million of state deferred tax assets and $0.2 million of foreign deferred tax assets. As a result of the sale of the Industrial business during 2021, the Company generated a capital loss of $113.7 million for federal and state purposes to the extent allowable under state tax regulations. Amended Federal returns were filed to carry back $3.7 million of capital loss. As of December 31, 2023, the remaining capital loss carry forward is $110.0 million. The capital loss carryforward will expire in 2026. The Company recognized a total of $26.5 million of deferred tax assets, net of the federal benefit, related to this carryforward prior to any valuation allowances, which included $22.2 million of federal and $4.3 million of state deferred tax assets. The Company has a full valuation allowance on the capital loss carry forward and as a result there is no deferred tax asset related to the capital loss. Deferred taxes include net deferred tax assets relating to certain state and foreign tax jurisdictions. A reduction of the carrying amount of deferred tax assets by a valuation allowance is required if it is more likely than not that such assets will not be realized. The following sets forth a reconciliation of the beginning and ending amount of the Company’s valuation allowance (in thousands):
| 2023 |  | 2022 |  | 2021
Balance as of January 1 | $ | 26,488 |  |  | $ | 26,581 |  |  | $ | 111 |
Cost charged to the tax provision | 105 |  |  | 10 |  |  | 13 |
Reductions | — |  |  | (103) |  |  | (41) |
Reclassification from discontinued operations upon sale of industrial group | — |  |  | — |  |  | 26,498 |
Balance as of December 31 | $ | 26,593 |  |  | $ | 26,488 |  |  | $ | 26,581 |
The Company made net payments for income taxes for the following amounts for the years ended December 31 (in thousands):
| 2023 |  | 2022 |  | 2021
Payments made for income taxes, net | $ | 23,447 |  |  | $ | 27,017 |  |  | $ | 22,076 |
At December 31, 2023, the Company had approximately $1.4 million of undistributed earnings of foreign subsidiaries. The Company continues to maintain its assertion that all remaining foreign earnings will be indefinitely reinvested. Any excess earnings could be used to grow the Company's foreign operations through launches of new capital projects or additional acquisitions. Determination of the amount of unrecognized deferred U.S. income tax liability related to the Company's remaining unremitted foreign earnings is not practicable due to the complexities associated with its hypothetical calculation. The Company did not have any unrecognized tax benefits or activity related to such benefits in any of the years presented in the consolidated financial statements. The Company classifies accrued interest and penalties related to unrecognized tax benefits in income tax expense. No interest or penalties have been recognized during the years presented. The Company and its U.S. subsidiaries file a U.S. federal consolidated income tax return. Foreign and U.S. state jurisdictions have statute of limitations generally ranging from four to ten years. The Company is currently in appeals for an audit of tax years 2016 through 2019 in Massachusetts and believes the technical merits of the position will be sustained.

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