XML 36 R20.htm IDEA: XBRL DOCUMENT
v3.20.1

Income Taxes | 3 Months Ended
--- | ---
Mar. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Note 13. Income Taxes The Company calculates its interim income tax provision in accordance with ASC Topic 270, “Interim Reporting,” and ASC Topic 740 “Accounting for Income Taxes.” At the end of each interim period, the Company estimates its annual effective tax rate and applies that rate to its ordinary quarterly earnings to calculate the tax related to ordinary income. The tax effects for other items that are excluded from ordinary income are discretely calculated and recognized in the period in which they occur. In January 2019, the Company acquired Jack Wolfskin for approximately $521,201,000 (including cash acquired of $58,096,000). The Company recorded a deferred tax liability of $88,392,000 related to the intangibles upon acquisition in addition to $11,384,000 deferred tax assets acquired (see Note 5). The realization of deferred tax assets, including loss and credit carryforwards, is subject to the Company generating sufficient taxable income during the periods in which the deferred tax assets become realizable. Due to the Company’s historical profitability, combined with future projections of profitability, the Company has determined that the majority of its U.S. deferred tax assets are more likely than not to be realized. The valuation allowance on the Company’s U.S. deferred tax assets as of March 31, 2020 primarily relates to state net operating loss carryforwards and credits that the Company estimates it may not be able to utilize in future periods. With respect to Jack Wolfskin and previously existing non-U.S. entities, there continues to be sufficient positive evidence to conclude that realization of its deferred tax assets is more likely than not under applicable accounting rules, and therefore no significant valuation allowances have been established. The Company has considered the business disruption impacts from the COVID-19 pandemic and determined that this hasn’t impacted the realization of its deferred tax assets. As this is a dynamically evolving business disruption, the Company will continue to evaluate the COVID-19-related impacts on the realization of its deferred tax assets as new information becomes available. The Company's income tax provision was $9,151,000 and $9,556,000 for the three months ended March 31, 2020 and 2019, respectively. The decrease in the provision was primarily due to a decrease in pre-tax income compared to 2019. As a percentage of pre-tax income, the Company's effective tax rate increased to 24.1% in the first quarter of 2020 compared to 16.5% in the first quarter of 2019, primarily due to a shift in the mix of foreign earnings relative to the prior year combined with a decrease in earnings resulting from the business disruptions caused by the COVID-19 pandemic. At March 31, 2020, the gross liability for income taxes associated with uncertain tax positions was $26,380,000. Of this amount, $11,129,000 would benefit the Company’s consolidated condensed financial statements and effective income tax rate if favorably settled. The unrecognized tax liabilities are expected to decrease by approximately $449,000 during the next 12 months. The gross liability for uncertain tax positions increased by $387,000 for the three months ended March 31, 2020. The increase was primarily due to increases in tax positions taken during the current quarter. The Company recognizes interest and penalties related to income tax matters in income tax expense. For the three months ended March 31, 2020 and 2019, the Company's provision for income taxes includes an expense of $29,000 and $32,000, respectively, related to the recognition of interest and/or penalties. As of March 31, 2020 and December 31, 2019, the gross amount of accrued interest and penalties included in income taxes payable in the accompanying consolidated condensed balance sheets was $1,698,000 and $1,669,000, respectively. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in the following major jurisdictions:
Tax Jurisdiction |  | Years No Longer Subject to Audit
U.S. federal |  | 2010 and prior
California (U.S.) |  | 2008 and prior
Germany |  | 2014 and prior
Japan |  | 2013 and prior
South Korea |  | 2014 and prior
United Kingdom |  | 2015 and prior
Pursuant to Section 382 of the Internal Revenue Code, use of the Company's net operating losses and credit carry-forwards may be limited significantly if the Company were to experience a cumulative change in ownership of the Company's stock by “5-percent shareholders” that exceeds 50% over a rolling three-year period. The Company does not believe there has been a cumulative change in ownership in excess of 50% during any rolling three-year period, and the Company continues to monitor changes in its ownership. If such a cumulative change did occur in any three-year period and the Company were limited in the amount of losses and credits it could use to offset its tax liabilities, the Company's results of operations and cash flows could be adversely impacted.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration