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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
13. | Income Taxes
Income (loss) before income taxes was generated in the United States and globally as follows:
(table only in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Domestic |  | $ | 3,495 |  |  | $ | 11,565 |  |  | $ | 6,230 |
Foreign |  |  | 8,349 |  |  |  | 1,779 |  |  |  | (3,733 | )
|  | $ | 11,844 |  |  | $ | 13,344 |  |  | $ | 2,497 |
Certain of the Company’s undistributed earnings of its foreign subsidiaries are not permanently reinvested, as management intends to repatriate foreign-held cash as needed to meet domestic cash needs for operating, investing, and financing activities. A liability of $0.9 million has been recorded for the deferred taxes on such undistributed foreign earnings as of December 31, 2020. The deferred taxes are attributable primarily to the foreign withholding taxes that would become payable should the Company repatriate cash held in its foreign operations. Income tax expense (benefit) consisted of the following for the years ended December 31:
(table only in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (239 | ) |  | $ | (4,526 | ) |  | $ | 5,166 |
State |  |  | 241 |  |  |  | (616 | ) |  |  | 1,660 |
Foreign |  |  | 2,632 |  |  |  | 1,719 |  |  |  | 2,834 |
|  |  | 2,634 |  |  |  | (3,423 | ) |  |  | 9,660 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 1,638 |  |  |  | (604 | ) |  |  | 1,144 |
State |  |  | 313 |  |  |  | (220 | ) |  |  | 56 |
Foreign |  |  | (913 | ) |  |  | (116 | ) |  |  | (1,242 | )
|  |  | 1,038 |  |  |  | (940 | ) |  |  | (42 | )
|  | $ | 3,672 |  |  | $ | (4,363 | ) |  | $ | 9,618 |
The income tax expense (benefit) differs from the statutory rate due to the following:
(table only in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Tax expense at statutory rate |  | $ | 2,487 |  |  | $ | 2,802 |  |  | $ | 524 |
Increase (decrease) in tax resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State income tax, net of federal benefit |  |  | 503 |  |  |  | (707 | ) |  |  | 1,337 |
Change in uncertain tax position reserves |  |  | (115 | ) |  |  | (236 | ) |  |  | 73 |
Permanent differences related to divestitures |  |  | — |  |  |  | (4,201 | ) |  |  | 7,048 |
Other permanent differences |  |  | 601 |  |  |  | (842 | ) |  |  | 693 |
Impact of rate differences and adjustments |  |  | 101 |  |  |  | 884 |  |  |  | 57 |
United States tax credits and incentives |  |  | 153 |  |  |  | (2,124 | ) |  |  | (354 | )
Foreign tax credits and incentives |  |  | (794 | ) |  |  | (1,386 | ) |  |  | (1,088 | )
Change in valuation allowance |  |  | (218 | ) |  |  | 198 |  |  |  | 1,521 |
Net deemed distribution on repatriation of foreign earnings |  |  | — |  |  |  | — |  |  |  | (1,713 | )
Foreign withholding taxes on repatriation of foreign earnings |  |  | 242 |  |  |  | 646 |  |  |  | 666 |
Earnout expense (income) |  |  | 293 |  |  |  | — |  |  |  | (69 | )
Investment in joint venture |  |  | (1,341 | ) |  |  | — |  |  |  | — |
Net effect GILTI and FDII |  |  | 1,598 |  |  |  | 399 |  |  |  | (172 | )
Other |  |  | 162 |  |  |  | 204 |  |  |  | 1,095 |
|  | $ | 3,672 |  |  | $ | (4,363 | ) |  | $ | 9,618 |
Deferred income taxes reflect the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and tax credit carry forwards. The net deferred tax liabilities consisted of the following at December 31:
(table only in thousands) |  | 2020 |  |  | 2019 |
Gross deferred tax assets: |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 731 |  |  | $ | 1,167 |
Reserves on assets |  |  | 1,777 |  |  |  | 1,566 |
Share-based compensation awards |  |  | 334 |  |  |  | 410 |
Minimum pension |  |  | 2,188 |  |  |  | 1,946 |
Net operating loss carry-forwards |  |  | 3,531 |  |  |  | 3,141 |
Tax credit carry-forwards |  |  | 2,518 |  |  |  | 2,940 |
Investment in joint venture |  |  | 1,505 |  |  |  | — |
Other |  |  | 645 |  |  |  | 371 |
Depreciation |  |  | — |  |  |  | 140 |
Leases |  |  | 2,556 |  |  |  | 2,999 |
Valuation allowances |  |  | (5,965 | ) |  |  | (5,810 | )
|  | $ | 9,820 |  |  | $ | 8,870 |
Gross deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | (1,159 | ) |  |  | — |
Goodwill and intangibles |  |  | (11,565 | ) |  |  | (9,855 | )
Prepaid expenses and inventory |  |  | (438 | ) |  |  | (554 | )
Withholding tax on unremitted foreign earnings |  |  | (871 | ) |  |  | (646 | )
Leases |  |  | (2,602 | ) |  |  | (3,010 | )
Revenue recognition |  |  | (155 | ) |  |  | (748 | )
|  |  | (16,790 | ) |  |  | (14,813 | )
Net deferred tax liabilities |  | $ | (6,970 | ) |  | $ | (5,943 | )
As of December 31, 2020, the Company has federal net operating loss carry forwards of $0.6 million. Federal net operating losses of $0.1 million will expire in 2037. The remaining net operating losses can be carried forward indefinitely until the loss is fully recovered. State and local net operating loss carry forwards total $49.4 million, which expire from 2021 to 2040. The Company has recorded a valuation allowance on certain of these net operating loss carry forwards to reflect expected realization. The Company also has net operating loss carry forwards in foreign jurisdictions totaling $10.3 million. A full valuation allowance has been established against substantially all of these losses in foreign jurisdictions. As of December 31, 2020 and 2019, the Company has recorded a valuation reserve in the amount of $6.0 million and $5.8 million, respectively. The changes in the valuation allowance resulted in additional income tax expense (benefit) of $(0.2) million, $0.2 million, and $1.5 million in 2020, 2019, and 2018, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry forward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based on this assessment, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2020. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The Company accounts for uncertain tax positions pursuant to FASB ASC Topic 740. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. A reconciliation of the beginning and ending amount of uncertain tax position reserves included in other liabilities on the Consolidated Balance Sheets is as follows:
(table only in thousands) |  | 2020 |  |  | 2019 |
Balance as of January 1, |  | $ | 254 |  |  | $ | 939 |
Additions for tax positions taken in prior years |  |  | 2 |  |  |  | 4 |
Reductions of tax positions taken in prior years |  |  | (117 | ) |  |  | (240 | )
Reductions for settlements on tax positions of prior years |  |  | — |  |  |  | (449 | )
Balance as of December 31, |  | $ | 139 |  |  | $ | 254 |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The reserve for uncertain tax positions includes zero and $0.1 million of interest and penalties as of December 31, 2020 and 2019, respectively. The favorable settlement of all uncertain tax positions would impact the Company’s effective income tax rate. Tax years going back to 2015 remain open for all significant state and foreign authorities.

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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