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Note 10 - Income Taxes | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
10. | INCOME TAXES
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2021 and for state examinations before 2018. Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before 2014 in Asia and generally 2016 in Europe. The components of income from operations before income taxes and the provision for income taxes are as follows: Domestic and foreign income before taxes is as follows:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Domestic |  | $ | 29,224 |  |  | $ | 51,550 |  |  | $ | 14,215 |
Foreign |  |  | 32,584 |  |  |  | 31,750 |  |  |  | 44,844 |
|  | $ | 61,808 |  |  | $ | 83,300 |  |  | $ | 59,059 |
Federal, state and foreign income tax expense (benefit) consists of the following:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 11,473 |  |  | $ | 11,403 |  |  | $ | 9,175 |
State |  |  | 895 |  |  |  | 975 |  |  |  | 787 |
Foreign |  |  | 6,515 |  |  |  | 963 |  |  |  | 1,002 |
|  |  | 18,883 |  |  |  | 13,341 |  |  |  | 10,964 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (5,200 | ) |  |  | (3,128 | ) |  |  | (4,064 | )
State |  |  | (442 | ) |  |  | (139 | ) |  |  | (255 | )
Foreign |  |  | (625 | ) |  |  | (605 | ) |  |  | (275 | )
|  |  | (6,267 | ) |  |  | (3,872 | ) |  |  | (4,594 | )
|  | $ | 12,616 |  |  | $ | 9,469 |  |  | $ | 6,370 |
A reconciliation of taxes on income computed at the U.S. federal statutory rate to amounts provided is as follows:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  | % |  |  |  | $ |  |  | % |  |  |  | $ |  |  | % |
Tax provision computed at the federal statutory rate |  | $ | 12,980 |  |  |  | 21 | % |  | $ | 17,493 |  |  |  | 21 | % |  | $ | 12,402 |  |  |  | 21 | %
Increase (decrease) in taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Different tax rates applicable to foreign operations |  |  | 1,736 |  |  |  | 3 | % |  |  | (1,697 | ) |  |  | (2 | %) |  |  | (1,677 | ) |  |  | (3 | %)
Reversal of liability for uncertain tax positions - net |  |  | (1,696 | ) |  |  | (3 | %) |  |  | (4,726 | ) |  |  | (6 | %) |  |  | (2,515 | ) |  |  | (4 | %)
State taxes, net of federal benefit |  |  | (767 | ) |  |  | (1 | %) |  |  | (433 | ) |  |  | (1 | %) |  |  | 292 |  |  |  | 0 | %
SERP/COLI and restricted stock income |  |  | (1,302 | ) |  |  | (2 | %) |  |  | (756 | ) |  |  | (1 | %) |  |  | 733 |  |  |  | 1 | %
Other, net |  |  | 1,665 |  |  |  | 3 | % |  |  | (412 | ) |  |  | (0 | %) |  |  | (2,865 | ) |  |  | (5 | %)
Tax provision computed at the Company's effective tax rate |  | $ | 12,616 |  |  |  | 20 | % |  | $ | 9,469 |  |  |  | 11 | % |  | $ | 6,370 |  |  |  | 11 | %
As of December 31, 2024 and 2023. the Company has gross foreign net operating losses (“NOLs”) of $14.4 million and $15.1 million which amount to $3.9 million and $4.0 million of deferred tax assets, respectively. The Company has no federal or state NOLs during these periods. In addition, the Company has $0.3 million of credit carryforwards. The Company believes that it is more likely than not that the benefit arising from certain NOL, credit carryforwards and acquisition assets will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $1.8 million on these deferred tax assets. The federal and certain foreign NOLs can be carried forward indefinitely, the state and certain foreign NOLs expire at various times during 2028 – 2043 and the tax credit carryforwards expire at various times during 2031 - 2043. As of December 31, 2024, we are not indefinitely reinvested with respect to undistributed earnings from some of our Asian subsidiaries. There was no material deferred tax expense recorded for foreign tax costs associated with the future remittance of these undistributed earnings. The Company remains permanently reinvested with respect to undistributed earnings from our other foreign subsidiaries. It is not practicable to estimate the amount of deferred tax liability, if any, with respect to these permanently reinvested undistributed earnings. Components of deferred income tax assets and liabilities are as follows:
|  | December 31, |
|  | 2024 |  |  | 2023 |
|  | Tax Effect |  |  | Tax Effect |
Deferred tax assets: |  |  |  |  |  |  |  |
State tax credits |  | $ | 90 |  |  | $ | 424 |
Reserves and accruals |  |  | 6,970 |  |  |  | 4,504 |
Federal, state and foreign net operating loss and credit carryforwards |  |  | 4,247 |  |  |  | 4,303 |
Depreciation |  |  | 384 |  |  |  | 435 |
Amortization |  |  | 9,845 |  |  |  | 6,004 |
Lease accounting |  |  | 6,157 |  |  |  | 4,605 |
Other accruals |  |  | 6,054 |  |  |  | 5,997 |
Total deferred tax assets |  |  | 33,747 |  |  |  | 26,272 |
Valuation allowance |  |  | 1,844 |  |  |  | 2,009 |
Net deferred tax assets |  |  | 31,903 |  |  |  | 24,263 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Unfunded pension liability |  |  | 260 |  |  |  | 255 |
Depreciation |  |  | 2,685 |  |  |  | 2,331 |
Amortization |  |  | 34,903 |  |  |  | 6,359 |
Lease accounting |  |  | 5,960 |  |  |  | 4,659 |
Other accruals |  |  | 581 |  |  |  | 562 |
Total deferred tax liabilities |  |  | 44,389 |  |  |  | 14,166 |
Net deferred tax (liabilities) assets |  | $ | (12,486 | ) |  | $ | 10,097 |
At December 31, 2024, 2023 and 2022, the Company has approximately $18.1 million, $19.8 million and $24.8 million, respectively, of liabilities for uncertain tax positions. These amounts, if recognized, would reduce the Company’s effective tax rate. As of December 31, 2024, approximately $1.2 million of the Company’s liabilities for uncertain tax positions are expected to be resolved during the next twelve months by way of expiration of the related statutes of limitations. A reconciliation of the beginning and ending amount of the liability for uncertain tax positions, including the portion included in income taxes payable, is as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Liability for uncertain tax positions - January 1 |  | $ | 19,823 |  |  | $ | 24,798 |
Additions based on tax positions related to the current year |  |  | 1,053 |  |  |  | 973 |
Translation adjustment |  |  | - |  |  |  | (249 | )
Settlement/expiration of statutes of limitations |  |  | (2,749 | ) |  |  | (5,699 | )
Liability for uncertain tax positions - December 31 |  | $ | 18,127 |  |  | $ | 19,823 |
The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes. During the years ended December 31, 2024, 2023 and 2022, the Company recognized $0.3 million, $0.4 million and $0.6 million, respectively, in interest and penalties in the consolidated statements of operations. During the years ended December 31, 2024, 2023 and 2022, the Company recognized a benefit of $1.1 million, $2.3 million and $1.6 million, respectively, for the reversal of such interest and penalties, relating to the expiration of statues of limitations and settlement of the acquired liability for uncertain tax positions. The Company has approximately $1.2 million, $2.0 million and $4.0 million accrued for the payment of interest and penalties at December 31, 2024, 2023 and 2022, respectively, which is included in both income taxes payable and liability for uncertain tax positions in the consolidated balance sheets.

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