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Income Taxes (Tables)

12 Months Ended

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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