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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income (loss) before income taxes was generated in the following jurisdictions:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
(In thousands) |  |  |  |  |
U.S. | $ | (9,569) |  |  | $ | (15,056) |  |  | $ | 1,046 |
Non-U.S. | (2,124) |  |  | (11,087) |  |  | (4,466) |
Total | $ | (11,693) |  |  | $ | (26,143) |  |  | $ | (3,420) |
For the years ended December 31, 2022, 2021, and 2020, domestic income excludes intercompany dividend income of $0 million, $0 million, and $38.0 million, respectively. The provision (benefit) for income taxes consists of the following:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
(In thousands) |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 122 |  |  | $ | (11) |  |  | $ | 1,715 |
State | 32 |  |  | (23) |  |  | 49 |
Foreign | 1,665 |  |  | 2,478 |  |  | 1,758 |
Total current | 1,819 |  |  | 2,444 |  |  | 3,522 |
Deferred: |  |  |  |  |
Federal | (349) |  |  | 3,774 |  |  | 1,385 |
State | 35 |  |  | (3) |  |  | (24) |
Foreign | 1,236 |  |  | (1,774) |  |  | (2,848) |
Total deferred | 922 |  |  | 1,997 |  |  | (1,487) |
Total | $ | 2,741 |  |  | $ | 4,441 |  |  | $ | 2,035 |
For 2022, 2021, and 2020, the Company's U.S. federal statutory rate was 21%. The differences between the income tax provisions computed using the statutory federal income tax rate and the provisions for income taxes reported in the consolidated statements of operations are as follows:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
(In thousands) |  |  |  |  |
Expected tax at statutory rate | $ | (2,456) |  |  | $ | (5,490) |  |  | $ | (718) |
Foreign taxes at other rates | 3,373 |  |  | 307 |  |  | (309) |
Valuation allowance changes | 4,370 |  |  | 15,019 |  |  | 2,617 |
Global intangible low-taxed income inclusion | — |  |  | — |  |  | 339 |
State income taxes, net of federal benefit | (322) |  |  | (811) |  |  | 32 |
Uncertain tax positions | (515) |  |  | 12 |  |  | 235 |
Research credits | (2,568) |  |  | (3,466) |  |  | (1,029) |
Disallowed expenses and other | 859 |  |  | (1,130) |  |  | 868 |
Total | $ | 2,741 |  |  | $ | 4,441 |  |  | $ | 2,035 |
Significant components of the Company's deferred tax assets and liabilities as of December 31, 2022 and 2021, are as follows:
| December 31,
| 2022 |  | 2021
(In thousands) |  |  |
Deferred tax assets: |  |  |
Stock and long-term compensation plans | $ | 923 |  |  | $ | 1,337 |
Foreign NOL & other carryforwards | 41,154 |  |  | 38,153 |
US and state NOL carryforwards | 5,654 |  |  | 5,539 |
Deferred revenue | 863 |  |  | 2,068 |
Pension liability | 498 |  |  | 1,547 |
Amortization and depreciation | 526 |  |  | 257 |
Lease liability | 2,641 |  |  | 3,171 |
Capitalized research and development | 487 |  |  | — |
Accrued expenses and other | 1,427 |  |  | 1,157 |
Total gross deferred tax assets | 54,173 |  |  | 53,229 |
Less: Valuation allowance | (39,177) |  |  | (34,979) |
Net deferred income tax assets | $ | 14,996 |  |  | $ | 18,250 |
Deferred tax liabilities: |  |  |
Accruals | $ | 319 |  |  | $ | 231 |
Tax on unremitted foreign earnings | 1,249 |  |  | 1,357 |
Right of use asset | 2,531 |  |  | 2,872 |
Intangible assets | 3,009 |  |  | 5,225 |
Tax on credits | 3,736 |  |  | 3,439 |
Contract acquisition costs | 3,448 |  |  | 2,626 |
Deferred tax liabilities | $ | 14,292 |  |  | $ | 15,750 |
Net deferred tax assets | $ | 704 |  |  | $ | 2,500 |
Deferred tax assets and liabilities are netted by tax jurisdiction. At December 31, 2022, the Company had foreign and state net operating loss (NOL) carryforwards and other foreign deductible carryforwards as shown in the following table:
| Carryforward |  | Expiration
(In thousands) |  |  |
NOL Carryforward |  |  |
Canada | $ | 24,804 |  |  | 2034-2039
United States | 17,989 |  |  | None
United Kingdom | 9,569 |  |  | None
Switzerland | 14,319 |  |  | 2028-2029
Other foreign | 5,886 |  |  | None
Canada province | 25,502 |  |  | 2034-2039
U.S. states | 27,680 |  |  | 2023-2042
| $ | 125,749 |  |  |
Other Carryforwards |  |  |
United States credit | $ | 828 |  |  | 2032
Canada | 47,526 |  |  | None
Canada province | 61,657 |  |  | None
Capital loss | 383 |  |  | None
Canada credits | 9,809 |  |  | 2025-2042
Canada province credits | 3,980 |  |  | 2036-2042
| $ | 124,183 |  |  |
| $ | 249,932 |  |  |
The valuation allowance against the net deferred tax assets as of December 31, 2022 and 2021 was $39.2 million and $35.0 million, respectively. The Company recorded changes in valuation allowance of $4.4 million and $15.0 million, during the years ended December 31, 2022 and 2021, respectively, against deferred tax assets that, based on the Company's assessment are considered not to be more likely than not to be realized. The increase in the valuation allowance in 2022 reflects Net Operating Losses (“NOLs”), other deduction carryforwards, and credits for which the realization is not more likely than not. The change in valuation allowance also reflects other factors including, but not limited to, changes in the Company's assessment of the ability to use existing deferred tax assets, including NOLs and other deduction carryforwards. The Company assesses the need for a valuation allowance on a regular basis, weighing all positive and negative evidence to determine whether a deferred tax asset will be fully or partially realized. In evaluating the realizability of deferred tax assets, significant pieces of negative evidence such as 3-year cumulative losses are considered. The Company also reviewed reversal patterns of temporary differences to determine if the Company would have sufficient taxable income due to the reversal of temporary differences to support the realization of deferred tax assets. In 2022 and 2021, the Company made the decision to establish a valuation allowance against certain deferred tax assets in jurisdictions that were not previously valued as the deferred tax assets were no longer more likely than not to be realized. The Company continues to maintain a valuation allowance against certain deferred tax assets in other jurisdictions where assets had been previously valued. For all other remaining deferred tax assets, the Company believes it is still more likely than not that the results of future operations or tax planning strategies will generate sufficient taxable income to realize the deferred tax assets. The Company's policy is to record interest and penalties on income taxes as income tax expense, It recorded expense of less than $0.1 million in 2022 and 2021, and $0.1 million during 2020. ASC 740, Income Taxes sets a “more-likely-than-not” criterion for recognizing the tax benefit of uncertain tax positions. As of December 31, 2022, 2021, and 2020, the Company had reserves of $0 million, $0.5 million, and $0.5 million, respectively.
| December 31,
| 2022 |  | 2021 |  | 2020
(In thousands) |  |  |  |  |
Reserve at beginning of year | $ | 512 |  |  | $ | 500 |  |  | $ | 2,923 |
Increases related to prior year tax positions | — |  |  | 12 |  |  | 277 |
Decreases related to prior year tax positions | (512) |  |  | — |  |  | (37) |
Settlement | — |  |  | — |  |  | (2,663) |
Total | $ | — |  |  | $ | 512 |  |  | $ | 500 |
The Company files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions, and is subject to examination of its income tax returns by the IRS and other tax authorities. The Company reduced an uncertain tax position in the U.S. upon filing of an accounting method change and receiving audit protection. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with the Company's expectations, there could be a requirement to adjust the provision for income taxes in the period such resolution occurs. Included in the balance of unrecognized tax benefits as of December 31, 2022 is $0, of tax benefits that, if recognized, would affect the effective tax rate. The Company's primary tax jurisdictions and the earliest tax year subject to audit are presented in the following table.
Australia | 2014
Austria | 2016
Belgium | 2018
Canada | 2018
Netherlands | 2017
Singapore | 2017
Switzerland | 2020
United Kingdom | 2020
United States | 2017

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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