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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax, Domestic and Foreign | Components of the Company's income (loss) before taxes are as follows:
|  | Year ended December 31,
(in thousands) |  | 2023 |  | 2022 |  | 2021
Domestic (including U.S. exports) |  | $ | (54,649) |  |  | $ | 3,966 |  |  | $ | 11,266 |
Foreign subsidiaries |  | 37,244 |  |  | 36,785 |  |  | 15,397 |
|  | $ | (17,405) |  |  | $ | 40,751 |  |  | $ | 26,663 |
Components of the Company's Income Tax Provision (Benefit) | Components of the Company’s income tax provision are as follows:
|  | Year ended December 31,
(in thousands) |  | 2023 |  | 2022 |  | 2021
Current taxes |  |  |  |  |  |
Federal |  | $ | 25,727 |  |  | $ | 22,189 |  |  | $ | 17,760 |
State |  | 5,458 |  |  | 5,526 |  |  | 3,835 |
Foreign |  | 11,853 |  |  | 11,889 |  |  | 5,234 |
Total current taxes |  | 43,038 |  |  | 39,604 |  |  | 26,829 |
Deferred taxes: |  |  |  |  |  |
Federal |  | (20,974) |  |  | (3,079) |  |  | (11,277) |
State |  | (798) |  |  | 2,834 |  |  | (1,823) |
Foreign |  | 65 |  |  | (2,266) |  |  | 1,538 |
Total deferred taxes |  | (21,707) |  |  | (2,511) |  |  | (11,562) |
Total tax provision |  | $ | 21,331 |  |  | $ | 37,093 |  |  | $ | 15,267 |
Summary of Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that have resulted in the creation of deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022 are as follows:
| December 31,
(in thousands) | 2023 |  | 2022
Deferred tax assets: |  |  |
Tax credits | $ | 8,552 |  |  | $ | 9,958 |
Accounts receivable and allowances | 1,181 |  |  | 1,658 |
Net operating loss carryforwards | 10,574 |  |  | 27,095 |
Accrued expenses | 6,685 |  |  | 7,722 |
Interest expense limitation carryforwards | 19,386 |  |  | 7,419 |
Lease liabilities | 46,226 |  |  | 39,026 |
Inventory | 9,226 |  |  | 9,406 |
Stock based compensation | 5,976 |  |  | 6,048 |
Capitalized research & development expenses | 5,695 |  |  | 3,232 |
Other | 4,039 |  |  | 3,763 |
Total deferred tax assets | $ | 117,540 |  |  | $ | 115,327 |
Valuation allowance (1) | (10,510) |  |  | (21,104) |
Net deferred tax assets | $ | 107,030 |  |  | $ | 94,223 |
Deferred tax liabilities: |  |  |
Intangible assets | $ | (162,771) |  |  | $ | (178,224) |
Property and equipment | (23,273) |  |  | (23,551) |
Repatriation of foreign earnings | (38) |  |  | (38) |
Prepaid and other expenses | (842) |  |  | (863) |
Right of use assets | (40,237) |  |  | (34,174) |
Total deferred tax liabilities | $ | (227,161) |  |  | $ | (236,850) |
Total net deferred tax liability | $ | (120,131) |  |  | $ | (142,627) |
(1)Primarily relates to the Trust and 5.11, Arnold, Ergo and Velocity operating segments.
Reconciliation Between Federal Statutory Rate and Effective Income Tax Rate | The reconciliation between the Federal Statutory Rate and the effective income tax rate for 2023, 2022 and 2021 are as follows:
| Year ended December 31,
| 2023 |  | 2022 |  | 2021
United States Federal Statutory Rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes (net of Federal benefits) | (17.8) |  |  | 8.5 |  |  | 6.5 |
Foreign income taxes | (25.9) |  |  | 5.8 |  |  | 13.3 |
Expenses of Compass Group Diversified Holdings LLC representing a pass through to shareholders (1) | — |  |  | — |  |  | 56.6 |
Impact of subsidiary employee stock options | 20.4 |  |  | 1.4 |  |  | (0.4) |
Non-deductible acquisition costs | 0.2 |  |  | 1.3 |  |  | 1.0 |
Impairment expense | (90.1) |  |  | 2.2 |  |  | — |
Non-recognition of various carryforwards at subsidiaries | 2.0 |  |  | 35.9 |  |  | (3.7) |
United States tax on foreign income | (8.3) |  |  | 1.1 |  |  | (3.9) |
Dividend (net of dividend received deduction) | (51.0) |  |  | 7.7 |  |  | — |
Utilization of tax credits | 29.7 |  |  | (19.0) |  |  | (8.4) |
Effect of classification of assets held for sale | — |  |  | 21.1 |  |  | (27.3) |
Other | (2.8) |  |  | 4.0 |  |  | 2.8 |
Effective income tax rate | (122.6) | % |  | 91.0 | % |  | 57.5 | %
(1)The effective income tax rate for the year 2021 includes a loss at the Company’s parent, which was taxed as a partnership through August 31, 2021. Beginning September 1, 2021, the Company's parent is taxed as a corporation.
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the amount of unrecognized tax benefits for 2023, 2022 and 2021 are as follows (in thousands):
Balance at January 1, 2021 | $ | 1,334 |
Additions for current years’ tax positions | 31 |
Additions for prior years’ tax positions | 15 |
Reductions for prior years’ tax positions | (63) |
Reductions for expiration of statute of limitations | $ | (63) |
Balance at December 31, 2021 | $ | 1,254 |
Additions for current years’ tax positions | 91 |
Additions for prior years’ tax positions | 15 |
Reductions for prior years' tax positions | (71) |
Reductions for expiration of statute of limitations | (73) |
Balance at December 31, 2022 | $ | 1,216 |
Additions for current years’ tax positions | 28,325 |
Additions for prior years’ tax positions | 33 |
Reductions for prior years' tax positions | (184) |
Reductions for expiration of statute of limitations | (68) |
Balance at December 31, 2023 | $ | 29,322 |
The unrecognized tax benefits are recorded in the consolidated balance sheet in other noncurrent liabilities.

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