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Note 9 - Income Taxes Concept
 12 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 9 – Income Taxes

 

The components of Income before income taxes are:

 

   

2022

    

2021

    

2020

  

United States

   $ 6,270     $ 30,973     $ 28,493  

Foreign countries

     7,602       6,275       2,753  

Total

   $ 13,872     $ 37,248     $ 31,246  

 

 

The components of income tax expense are:

 

   

2022

    

2021

    

2020

  
Current expense:                        

Federal

   $ 1,581     $ 5,174     $ 4,058  

Foreign

     1,264       1,087       353  

State and local

     918       1,086       1,103  
    $ 3,763     $ 7,347     $ 5,514  
Deferred expense (benefit):                        

Federal

   $ (565 )   $ 60     $ 728  

Foreign

     147       48       (349 )

State and local

     (668 )     (58 )     165  
      (1,086 )     50       544  

Income tax expense

   $ 2,677     $ 7,397     $ 6,058  

 

The reconciliation between income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes is:

 

   

2022

    

2021

    

2020

  

Income taxes at statutory rate

   $ 2,913     $ 7,822     $ 6,562  

State and local income taxes, net of federal tax benefit

     282       898       711  

Tax credits

     (627 )     (1,052 )     (808 )

Uncertain tax positions

     (99 )     (26 )     42  

Valuation allowance

     (85 )     (86 )     -  

GILTI/FDII

     608       238       (286 )

Foreign rate differential

     (186 )     (183 )     (574 )

Other

     (129 )     (214 )     411  

Income tax expense

   $ 2,677     $ 7,397     $ 6,058  

 

The Company made income tax payments of $4.5 million, $7.9 million, and $6.2 million in 2022, 2021, and 2020, respectively.

 

Deferred income tax assets and liabilities consist of:

 

   

2022

    

2021

  
Deferred tax assets:                

Inventories

   $ 524     $ -  

Accrued liabilities

     3,208       1,900  

Postretirement health benefits obligation

     5,584       6,724  

Pension

     1,868       1,745  

Lease liabilities

     520       272  

Capitalized R&D

     1,103       -  

Interest

     3,168       -  

Other

     1,399       1,531  

Total deferred tax assets

     17,374       12,172  

Valuation allowance

     (462 )     (481 )

Net deferred tax assets

     16,912       11,691  

Deferred tax liabilities:

                

Depreciation and amortization

     (16,987 )     (9,817 )

Leases – right of use assets

     (536 )     (269 )

Inventories

     -       (628 )

Total deferred tax liabilities

     (17,523 )     (10,714 )

Net deferred tax assets (liabilities)

   $ (611 )   $ 977  

 

The Company had state tax credit carryforwards of $0.4 million and $0.6 million as of December 31, 2022 and 2021, respectively, which will expire incrementally between 2023 and 2036.

 

The Company had valuation allowances of $0.5 million at both December 31, 2022 and 2021, against certain of its deferred tax assets. ASC 740, “Income Taxes,” requires that a valuation allowance be recorded against deferred tax assets when it is more likely than not that some or all of a Company’s deferred tax assets will not be realized based on available positive and negative evidence.

 

 

Total unrecognized tax benefits were $0.8 million at both December 31, 2022 and 2021. The total amount of unrecognized tax benefits that, if ultimately recognized, would reduce the Company’s annual effective tax rate were $0.6 million and $0.7 million at December 31, 2022 and 2021, respectively.

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

   

2022

    

2021

    

2020

  

Balance at beginning of year

   $ 808     $ 878     $ 1,130  

Additions based on tax positions related to the current year

     117       153       177  

Reductions due to lapse of applicable statute of limitations

     (171 )     (96 )     (139 )

Settlements

     -       (127 )     (290 )

Balance at end of year

   $ 754     $ 808     $ 878  

 

The Company is subject to income taxes in the U.S. federal and various state, local and foreign jurisdictions. Income tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2017.

 

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense for all periods presented. The Company accrued approximately $0.2 million for the payment of interest and penalties at each of December 31, 2022, 2021 and 2020.