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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Note 9 – Income Taxes Income tax expense consists of the following:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(in thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Income before income taxes |  | $ | 20,590 |  |  | $ | 20,395 |  |  | $ | 45,591 |  |  | $ | 60,017 |
Income tax expense |  | $ | 6,327 |  |  | $ | 5,021 |  |  | $ | 26,712 |  |  | $ | 15,113 |
Effective tax rate |  |  | 30.7 | % |  |  | 24.6 | % |  |  | 58.6 | % |  |  | 25.2 | %
The Company’s effective income tax rate was 30.7% for the three months ended September 30, 2025, and differed from the U.S. federal statutory income tax rate of 21% primarily due to a discrete tax expense of $0.8 million related to the exit of a business in the Americas, losses generated in a jurisdiction where no tax benefit can be recognized and the U.S. tax under the global intangible low-tax income (GILTI) provisions. The Company's effective income tax rate was 58.6% for the nine months ended September 30, 2025 and differed from the U.S. federal statutory income tax rate of 21% primarily due to the discrete tax expense of $10.4 million recorded in the second quarter for foreign withholding taxes on the repatriated dividends and recognition of deferred tax liabilities on China unremitted earnings, losses generated in a jurisdiction where no tax benefit can be realized and the U.S. tax under the GILTI provisions. The Company’s effective income tax rate was 24.6% and 25.2% for the three and nine months ended September 30, 2024, respectively, and differed from the U.S. federal statutory income tax rate of 21% primarily due to losses generated in a jurisdiction where no tax benefit can be recognized, the U.S. tax under the GILTI provisions, and the Global Minimum Tax (GMT) as defined under the Pillar Two directives of the Organization of Economic Co-operation and Development, partially offset by the benefit of tax incentives and tax holidays in foreign locations. The Company has been granted certain tax incentives, including tax holidays, for its subsidiaries in Thailand and China that expire at various dates, unless extended or otherwise renegotiated and are subject to certain conditions with which the Company expects to comply. The tax incentives in Thailand will expire at various dates through December 31, 2030. In the fourth quarter of 2024, the Company was awarded a China tax holiday retroactive to January 1, 2024 through December 31, 2026. The tax holiday reduces the statutory tax rate from 25% to 15%. The net impact of these tax incentives was to lower foreign income tax expense for the nine months ended September 30, 2025 and 2024 by approximately $4.1 million (approximately $0.11 per diluted share) and $3.3 million (approximately $0.09 per diluted share), respectively. A summary of the Company’s tax incentives follows:
|  | Nine Months Ended September 30, |
(in thousands) |  | 2025 |  |  | 2024 |
Thailand |  | $ | 2,847 |  |  | $ | 3,321 |
China |  |  | 1,247 |  |  |  | — |
Total tax incentives |  | $ | 4,094 |  |  | $ | 3,321 |
On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act (the “OBBBA”) which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company does not expect the OBBBA to have a material impact on its estimated annual effective tax rate in 2025. Determining the consolidated income tax expense, income tax liabilities and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which the Company operates, which involves estimating current tax exposures as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from act ual results, which may have a significant impact on operating results in future periods.

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