XML 27 R14.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision (benefit) for income taxes for the years ended December 31, 2018, 2017 and 2016 consists of the following:
| 2018 |  | 2017 |  | 2016
Current tax expense: |  |  |  |  |
Federal | $ | (1,077 | ) |  | $ | 1,744 |  |  | $ | 312 |
State | 777 |  |  | 2,101 |  |  | 159 |
Foreign | 8,036 |  |  | 9,421 |  |  | 7,111 |
| 7,736 |  |  | 13,266 |  |  | 7,582 |
Deferred income tax expense (benefit) | 2,063 |  |  | (40,021 | ) |  | (2,871 | )
Provision (benefit) for income taxes | $ | 9,799 |  |  | $ | (26,755 | ) |  | $ | 4,711 |
A reconciliation between income taxes computed at the statutory federal rate and the provision (benefit) for income taxes for the years ended December 31, 2018, 2017 and 2016 follows:
| 2018 |  | 2017 |  | 2016
Tax provision at statutory rate based on income before income taxes | 21.0 | % |  | 35.0 | % |  | 35.0 | %
US tax reform | 1.8 |  |  | (111.0 | ) |  | — |
International tax reform | (3.6 | ) |  | — |  |  | — |
Consolidated group restructuring | — |  |  | (7.4 | ) |  | — |
Foreign income taxes | 3.6 |  |  | (5.3 | ) |  | (6.8 | )
Federal research credit | (2.8 | ) |  | (2.8 | ) |  | (5.6 | )
Settlement of taxing authority examinations | (0.7 | ) |  | (2.1 | ) |  | (3.5 | )
Stock-based compensation | (1.6 | ) |  | (2.1 | ) |  | — |
European permanent deduction | (0.2 | ) |  | (0.5 | ) |  | (3.4 | )
Non deductible/non-taxable items | (1.2 | ) |  | (0.5 | ) |  | 7.2 |
State income taxes, net of federal tax benefit | 1.6 |  |  | 2.8 |  |  | 1.7 |
US tax on worldwide earnings at different rates | 2.9 |  |  | — |  |  | — |
Other, net | (1.5 | ) |  | 0.8 |  |  | (0.3 | )
| 19.3 | % |  | (93.1 | )% |  | 24.3 | %
The 2017 Tax Cuts and Jobs Act ("Tax Reform") was enacted on December 22, 2017. The Tax Reform included a number of changes in existing tax law impacting businesses, including a one-time deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory rate from 35% to 21%, effective on January 1, 2018. Under U.S. GAAP, changes in tax rates and tax law were accounted for in 2017, the period of enactment, and deferred tax assets and liabilities were measured at the enacted tax rate. The 2017 rate reconciliation included the Company’s assessment of the accounting under the Tax Reform which was preliminary based on information that was available to management at the time the consolidated financial statements were prepared. Estimated provisional amounts were recorded for the deemed repatriation toll charge implemented by the Tax Reform, related foreign tax credits, deferred tax revaluation amounts and deferred tax liabilities on unremitted earnings. Accordingly, the Company had determined a preliminary $31.9 million of tax benefit related to Tax Reform. Staff Accounting Bulletin No. 118 provided for a one-year measurement period to finalize these estimated provisional amounts. During 2018, the Company finalized its accounting and recorded $1.3 million of tax expense related to the revaluation of certain deferred tax items. This expense was offset in part by $0.4 million of tax benefit primarily resulting from finalization of the deemed repatriation toll charge, related foreign tax credits and adjustments to foreign withholding amounts. The final tax benefit related to Tax Reform was $31.0 million. FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, ("GILTI") allows for an election to account for GILTI under the deferred method, which requires recognizing deferred taxes for basis differences which will impact the GILTI inclusion upon reversal, or as a period cost. The Company has completed its evaluation of this election to account for GILTI and has adopted the period cost method. The net impact of GILTI including the allowable GILTI deduction is presented in the rate reconciliation as a component of “US tax on worldwide earnings at different rates” and is offset in part by the Foreign Derived Intangible Income deduction (“FDII”). The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2018 and 2017 are as follows:
| 2018 |  | 2017
Assets: |  |  |
Inventory | $ | 4,096 |  |  | $ | 2,420 |
Net operating losses | 7,358 |  |  | 11,091 |
Capitalized research and development | 7,214 |  |  | 8,557 |
Deferred compensation | 2,085 |  |  | 1,749 |
Accounts receivable | 2,296 |  |  | 1,855 |
Compensation and benefits | 5,434 |  |  | 4,138 |
Accrued pension | 3,205 |  |  | 2,695 |
Research and development credit | 8,585 |  |  | 8,957 |
Other | 2,235 |  |  | 9,342 |
Less: valuation allowances | (1,159 | ) |  | (570 | )
| 41,349 |  |  | 50,234 |
Liabilities: |  |  |  |
Goodwill and intangible assets | 100,108 |  |  | 102,099 |
Depreciation | 1,345 |  |  | 3,333 |
State taxes | 12,212 |  |  | 11,709 |
Unremitted foreign earnings | 3,583 |  |  | 6,000 |
Contingent interest | — |  |  | 40 |
| 117,248 |  |  | 123,181 |
Net liability | $ | (75,899 | ) |  | $ | (72,947 | )
Income before income taxes consists of the following U.S. and foreign income:
| 2018 |  | 2017 |  | 2016
U.S. income (loss) | $ | 24,320 |  |  | $ | 1,492 |  |  | $ | (6,128 | )
Foreign income | 26,333 |  |  | 27,240 |  |  | 25,503 |
Total income | $ | 50,653 |  |  | $ | 28,732 |  |  | $ | 19,375 |
As of December 31, 2018, the amount of federal net operating loss carryforward was $29.5 million and begins to expire in 2026. As of December 31, 2018, the amount of federal research credit carryforward available was $8.6 million. These credits begin to expire in 2027. In accordance with Tax Reform and SAB 118 measurement period adjustments, the Company has finalized the federal and state tax liabilities accrued on cumulative foreign subsidiary earnings at December 31, 2017. In addition, we have accrued a liability for foreign withholding taxes related to the amount of unremitted earnings at December 31, 2017 as they are not considered permanently reinvested. However, it is our intention to indefinitely reinvest all future foreign earnings for all periods occurring after December 31, 2017. The amount of such untaxed foreign earnings for the periods occurring after December 2017 totaled $18.4 million. If we were to repatriate these funds, we would be required to accrue and pay taxes on such amounts. The Company has estimated foreign withholding taxes of $0.6 million would be due if these earnings were repatriated. The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2016. We recognize tax liabilities in accordance with the provisions for accounting for uncertainty in income taxes. Such guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:
| 2018 |  | 2017 |  | 2016
Balance as of January 1, | $ | 2,943 |  |  | $ | 1,839 |  |  | $ | 616 |
Increases (decreases) for positions taken in prior periods | (250 | ) |  | (246 | ) |  | — |
Increases for positions taken in current periods | 1,017 |  |  | 1,957 |  |  | 1,584 |
Decreases in unrecorded tax positions related to settlement with the taxing authorities | (370 | ) |  | (607 | ) |  | (361 | )
Decreases in unrecorded tax positions related to lapse of statute of limitations | (267 | ) |  | — |  |  | — |
Balance as of December 31, | $ | 3,073 |  |  | $ | 2,943 |  |  | $ | 1,839 |
If the total unrecognized tax benefits of $3.1 million at December 31, 2018 were recognized, it would reduce our annual effective tax rate. The amount of interest accrued in 2016, 2017 and 2018 related to these unrecognized tax benefits was not material and is included in the provision (benefit) for income taxes in the consolidated statements of comprehensive income.

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