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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Note G - Income Taxes The Company recorded net tax provisions of $8.1 million, $6.0 million, and $13.2 million for the years ended December 31, 2019, 2018, and 2017, respectively. Cash taxes paid net of refunds were $7.8 million, $5.6 million, and $3.4 million for the years ending December 31, 2019, 2018, and 2017, respectively. As described in Note A, effective January 1, 2019, the Company adopted ASU 2018-02 and has elected not to reclassify the income tax effects of the U.S. Tax Act from Accumulated other comprehensive income to retained earnings. Income before income taxes was derived from the following sources:
|  | 2019 |  |  | 2018 |  |  | 2017 |
United States |  | $ | 11,353 |  |  | $ | 10,268 |  |  | $ | 4,774 |
Foreign |  |  | 20,105 |  |  |  | 22,320 |  |  |  | 21,032 |
|  | $ | 31,458 |  |  | $ | 32,588 |  |  | $ | 25,806 |
The components of income taxes for the years ended December 31 are as follows:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,835 |  |  | $ | (904 | ) |  | $ | 4,592 |
Foreign |  |  | 6,170 |  |  |  | 6,247 |  |  |  | 5,998 |
State and local |  |  | 391 |  |  |  | 350 |  |  |  | 126 |
|  |  | 9,396 |  |  |  | 5,693 |  |  |  | 10,716 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (10 | ) |  |  | 801 |  |  |  | 2,316 |
Foreign |  |  | (1,347 | ) |  |  | (608 | ) |  |  | 12 |
State and local |  |  | 83 |  |  |  | 121 |  |  |  | 108 |
|  |  | (1,274 | ) |  |  | 314 |  |  |  | 2,436 |
Income taxes |  | $ | 8,122 |  |  | $ | 6,007 |  |  | $ | 13,152 |
The differences between the provision for income taxes at the U.S. federal statutory rate and the tax shown in the Statements of Consolidated Income for the years ended December 31 are summarized as follows:
|  | 2019 |  |  | 2018 |  |  | 2017 |
U. S. federal statutory tax rate |  | 21% |  |  | 21% |  |  | 35% |
Federal tax at statutory rate |  | $ | 6,606 |  |  | $ | 6,843 |  |  | $ | 9,033 |
State and local taxes, net of federal benefit |  |  | 308 |  |  |  | 273 |  |  |  | 82 |
U.S. federal permanent items |  |  | 621 |  |  |  | 240 |  |  |  | (60 | )
Global intangible low-taxed income |  |  | 1,738 |  |  |  | 1,721 |  |  |  | (116 | )
Foreign tax credits |  |  | (1,422 | ) |  |  | (1,707 | ) |  |  | 0 |
Transition tax |  |  | 0 |  |  |  | (1,780 | ) |  |  | 2,592 |
Non-U.S. tax rate variances |  |  | 929 |  |  |  | 1,011 |  |  |  | (1,491 | )
Valuation allowance |  |  | (346 | ) |  |  | (57 | ) |  |  | 88 |
Tax credits |  |  | (464 | ) |  |  | (295 | ) |  |  | (255 | )
Tax act impact, deferred rate |  |  | 0 |  |  |  | (680 | ) |  |  | 3,161 |
Other, net |  |  | 152 |  |  |  | 438 |  |  |  | 118 |
|  | $ | 8,122 |  |  | $ | 6,007 |  |  | $ | 13,152 |
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax basis of assets and liabilities and their carrying value for financial statement purposes. The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities at December 31 are as follows:
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Accrued compensation and benefits |  | $ | 1,180 |  |  | $ | 1,387 |
Inventory valuation reserves |  |  | 2,384 |  |  |  | 2,256 |
Allowance for doubtful accounts |  |  | 473 |  |  |  | 346 |
Benefit plan reserves |  |  | 7,586 |  |  |  | 7,153 |
Net operating loss carryforwards |  |  | 3,003 |  |  |  | 2,651 |
Other accrued expenses |  |  | 3,012 |  |  |  | 2,830 |
Unrealized foreign exchange |  |  | 718 |  |  |  | 1,217 |
Gross deferred tax assets |  |  | 18,356 |  |  |  | 17,840 |
Valuation allowance |  |  | (3,137 | ) |  |  | (3,495 | )
Net deferred tax assets |  |  | 15,219 |  |  |  | 14,345 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and other basis differences |  |  | (6,867 | ) |  |  | (6,855 | )
Intangibles |  |  | (3,742 | ) |  |  | (2,057 | )
Undistributed foreign earnings |  |  | 0 |  |  |  | (172 | )
Other |  |  | (162 | ) |  |  | (72 | )
Deferred tax liabilities |  |  | (10,771 | ) |  |  | (9,156 | )
Net deferred tax assets |  | $ | 4,448 |  |  | $ | 5,189 |
|  | 2019 |  |  | 2018 |
Change in net deferred tax assets: |  |  |  |  |  |  |  |
Deferred income tax expense |  |  |  |  |  |  |  |
Ordinary movement |  | $ | 1,275 |  |  | $ | (993 | )
Deferred tax balances from business acquisition |  |  | (1,883 | ) |  |  | 0 |
Tax impact deferred rate |  |  | 0 |  |  |  | 680 |
Items of other comprehensive income (loss) |  |  | (62 | ) |  |  | (62 | )
Currency translation |  |  | (71 | ) |  |  | (120 | )
Total change in net deferred tax assets |  | $ | (741 | ) |  | $ | (495 | )
Deferred taxes are recorded at a rate at which such items are expected to reverse based on currently enacted tax rates for temporary differences between the financial reporting and income tax basis of assets and liabilities and operating loss and tax credit carryforwards. At December 31, 2019, the Company had $10.6 million of foreign net operating loss carryforwards of which $8.7 million have an indefinite carryforward and $1.9 million will expire between the years 2024 and 2029. The Company assesses the available positive and negative evidence to determine if it is more likely than not sufficient future taxable income will be generated to utilize the existing deferred tax assets by jurisdiction. Based on this evaluation, the Company has established a valuation allowance of $3.1 million at December 31, 2019 in order to measure only the portion of the deferred tax asset that is more likely than not to be realized. The net decrease in the valuation allowance during the year was $.4 million, of which $.3 million impacts the income tax provision and the remainder relates to currency translation. The Company considers the majority of the earnings in our non-U.S. subsidiaries to be permanently reinvested and accordingly did not record any associated deferred income taxes on such earnings. Accordingly, the Company intends to continue to invest approximately $110.6 million of the approximate $112.2 million of such earnings, as well as our capital in these subsidiaries, indefinitely outside of the U.S. The Company has recorded a tax liability of $.1 million related to the cost to remit such earnings not permanently reinvested, which is primarily related to local country withholding. The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. As of December 31, 2019, with few exceptions, the Company is no longer subject to U.S. federal examinations by tax authorities for years before 2015 and state, local or foreign examinations by tax authorities for years before 2013. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits related to uncertain tax positions, excluding interest and penalties, for the year ended December 31:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Balance at January 1 |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Additions for tax positions of current year |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Additions for tax positions of prior years |  |  | 118 |  |  |  | 0 |  |  |  | 0 |
Reductions for tax positions of prior years |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Expiration of statutes of limitations |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Balance at December 31 |  | $ | 118 |  |  | $ | 0 |  |  | $ | 0 |
The Company records accrued interest as well as penalties related to unrecognized tax benefits as part of the provision for income taxes. During the years ended December 31, 2019, 2018 and 2017, the Company had no significant activity with regard to unrecognized tax benefits. The Company had less than $.1 million of accrued interest and penalties as of December 31, 2019 and no accrued interest as of December 31, 2018 and 2017. The Company does not anticipate a change in the unrecognized tax benefits within the next twelve months.

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- 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
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