v3.24.0.1

Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Loss from continuing operations before income taxes and Income tax expense (benefit) consisted of the following:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Income (loss) from continuing operations before income taxes: |  |  |  |  |
Domestic operations | $ | (114,700) |  |  | $ | 8,826 |  |  | $ | (129,903) |
Foreign operations | 47,572 |  |  | (10,895) |  |  | 8,122 |
| $ | (67,128) |  |  | $ | (2,069) |  |  | $ | (121,781) |
Income tax expense (benefit): |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 949 |  |  | $ | 3,780 |  |  | $ | — |
State | 4,177 |  |  | 4,957 |  |  | 829 |
Foreign | 8,997 |  |  | 3,405 |  |  | 9,862 |
| 14,123 |  |  | 12,142 |  |  | 10,691 |
Deferred: |  |  |  |  |
Domestic operations | (22,866) |  |  | 73,370 |  |  | (29,801) |
Foreign operations | (4,546) |  |  | (49,392) |  |  | (418) |
| (27,412) |  |  | 23,978 |  |  | (30,219) |
| $ | (13,289) |  |  | $ | 36,120 |  |  | $ | (19,528) |
See Note 4, “Discontinued Operations” for the loss from discontinued operations and related income taxes. The Company’s Income tax expense (benefit) from continuing operations differs from the amount that would be computed by applying the U.S. federal statutory rate as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Taxes calculated at the U.S. federal statutory rate | $ | (14,097) |  |  | $ | (435) |  |  | $ | (25,574) |
State taxes | (1,835) |  |  | 10,878 |  |  | (4,473) |
Effect of tax rates on international operations | (3,053) |  |  | (5,106) |  |  | 681 |
Changes in valuation allowance | 4,646 |  |  | (12,126) |  |  | (4,496) |
Changes in tax reserves | (2,182) |  |  | 1,724 |  |  | (2,332) |
Research and development tax credits | (4,499) |  |  | (2,599) |  |  | (2,392) |
Net items not deductible (taxable) | (1,478) |  |  | 1,859 |  |  | 772 |
U.S. tax on international operations | 2,789 |  |  | 4,565 |  |  | 14,865 |
Transaction related costs | 840 |  |  | 27,699 |  |  | — |
Non-deductible employee compensation | 5,232 |  |  | 9,013 |  |  | 2,562 |
Other | 348 |  |  | 648 |  |  | 859 |
Income tax expense (benefit) | $ | (13,289) |  |  | $ | 36,120 |  |  | $ | (19,528) |
Deferred income taxes, net reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 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 significant components of deferred tax assets and liabilities included in continuing operations are as follows:
| December 31,
| 2023 |  | 2022
| (In thousands)
Deferred tax assets: |  |  |
Expenses currently not deductible | $ | 30,787 |  |  | $ | 30,428 |
Net operating loss and interest expense limitation carryforward | 119,247 |  |  | 162,713 |
Tax credit carryforward | 37,358 |  |  | 37,883 |
Depreciation and amortization | 57,901 |  |  | 28,659 |
Inventory reserves and capitalization | 18,585 |  |  | 6,731 |
Capitalized R&D expenditures | 41,343 |  |  | 29,579 |
Non-current lease liability | 17,798 |  |  | 17,815 |
Other | 6,069 |  |  | 2,171 |
Valuation allowance | (101,650) |  |  | (93,542) |
Deferred tax assets, net | 227,438 |  |  | 222,437 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (226,802) |  |  | (237,374) |
Lease asset - right of use | (16,463) |  |  | (17,380) |
Total deferred tax liabilities | (243,265) |  |  | (254,754) |
Total deferred tax liabilities, net | $ | (15,827) |  |  | $ | (32,317) |
The Company evaluates the recoverability of its deferred tax assets on a jurisdictional basis by considering whether deferred tax assets will be realized on a more lik ely than not basis. To the extent a portion or all of the applicable deferred tax assets do not meet the more likely than not threshold, a valuation allowance is recorded. During the year ended December 31, 2023, the valuation allowance increased from $93.5 million to $101.7 million with a net increase of $4.6 million recognized in Income tax benefit and a $3.5 million increase related to changes in foreign currency rates. Consideration was given to tax planning strategies and, when applicable, future taxable income as to how much of the relevant deferred tax asset could be realized on a more likely than not basis. The Company has U.S. net operating loss carryforwards of $14.2 million expiring in years 2024 through 2043, $11.7 million of net operating losses that may be carried forward indefinitely and U.S. interest limitation carryforward of $44.1 million that may be carried forward indefinitely. The Company’s ability to use these various carryforwards to offset any taxable income generated in future taxable periods may be limited under Section 382 and other federal tax provisions. As of December 31, 2023, the Company had $17.9 million foreign net operating loss carryforwards primarily in Germany, Switzerland, France, and the United Kingdom that may be subject to local tax limitations including changes in ownership. The foreign net operating losses can be carried forward indefinitely, except $3.1 million of net operating losses in Switzerland expiring in 2030. The company has $31.5 million of foreign interest limitation carryforward primarily in Germany, that may be carried forward indefinitely. The Company has U.S. foreign tax and R&D tax credits that may be used to offset U.S. tax in previous or future tax periods subject to Section 382 and other federal provisions. The Company’s $21.9 million foreign tax credit can be carried back one year and carried forward to tax years 2024 through 2031. The Company’s $10.5 million R&D credit can be carried back one year and carried forward to tax years 2024 through 2043. The Company has non-refundable R&D tax offsets of $3.4 million carrying forward indefinitely that that may be used to reduce Australian income tax in future periods. For the year ended December 31, 2023, undistributed earnings of the Company’s foreign subsidiaries are estimated to be $78.1 million, all of which is permanently reinvested; accordingly, the Company has assessed no deferred tax liability as of December 31, 2023 on such earnings. The Company records a liability for unrecognized income tax benefits for the amount of benefit included in its previously filed income tax returns and in its financial results expected to be included in income tax returns to be filed for periods through the date of its Consolidated Financial Statements for income tax positions for which it is not more likely than not to be sustained upon examination by the respective taxing authority. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
| (In thousands)
Balance, January 1, 2021 | $ | 58,014 |
Acquisitions and divestitures | 4,450 |
Addition for tax positions taken in prior periods | 228 |
Addition for tax positions taken in the current period | 3,653 |
Reductions related to settlements with taxing authorities | (425) |
Reductions resulting from a lapse of applicable statute of limitations | (3,239) |
Other, including the impact of foreign currency translation | (734) |
Balance, December 31, 2021 | 61,947 |
Acquisitions and divestitures | (23,250) |
Addition for tax positions taken in the current period | 462 |
Reductions resulting from a lapse of applicable statute of limitations | (244) |
Other, including the impact of foreign currency translation | (616) |
Balance, December 31, 2022 | 38,299 |
Acquisitions and divestitures | 2,052 |
Addition for tax positions taken in prior periods | 3,659 |
Addition for tax positions taken in the current period | 2,251 |
Reductions related to settlements with taxing authorities | (125) |
Reductions resulting from a lapse of applicable statute of limitations | (14,240) |
Other, including the impact of foreign currency translation | 230 |
Balance, December 31, 2023 | $ | 32,126 |
The Company is routinely examined by tax authorities around the world. Tax examinations remain in process in multiple countries, including but not limited to Germany, China, the United States and various U.S. states. The Company files numerous group and separate tax returns in U.S. federal and state jurisdictions, as well as international jurisdictions. In the U.S., tax years dating back to 2009 remain subject to examination, due to tax attributes available to be carried forward to open or future tax years. With some exceptions, other major tax jurisdictions generally are not subject to tax examinations for years beginning before 2017. The Company records interest and penalties on uncertain tax positions as a component of Income tax expense (benefit), which was $(2.0) million, $1.1 million, and $0.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, we had accrued $3.1 million and $4.2 million, respectively, of interest and penalties related to unrecognized tax benefits. Due to the difficulty in predicting with reasonable certainty when tax audits will be fully resolved and closed, the range of reasonably possible significant increases or decreases in the liability for unrecognized tax benefits that may occur within the next 12 months is difficult to ascertain. Currently, the Company estimates that it is reasonably possible that the expiration of various statutes of limitations, resolution of tax audits and court decisions may reduce its tax expense in the next 12 months up to $1.2 million. The gross amount of the unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate was $20.0 million as of December 31, 2023.

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