XML 35 R16.htm IDEA: XBRL DOCUMENT
v3.25.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income (loss) from continuing operations before provision for income taxes are taxed under the following jurisdictions (dollar amounts in thousands):
Year Ended December 31, |  | 2024 |  | 2023
Domestic |  | $ | (29,434) |  |  | $ | (15,962) |
Foreign |  | 47,860 |  |  | 36,164 |
Total |  | $ | 18,426 |  |  | $ | 20,202 |
Components of the provision for income taxes for each of the two years in the period ended December 31, 2024 are as follows (dollar amounts in thousands):
Year Ended December 31, |  | 2024 |  | 2023
Current: |  |  |  |
Federal |  | $ | 1,061 |  |  | $ | 1,875 |
State |  | 824 |  |  | 361 |
Foreign |  | 10,311 |  |  | 9,605 |
Subtotal |  | 12,196 |  |  | 11,841 |
Deferred: |  |  |  |
Federal |  | (1,705) |  |  | (8,277) |
State |  | (1,109) |  |  | (490) |
Foreign |  | 1,152 |  |  | 712 |
Subtotal |  | (1,662) |  |  | (8,055) |
Total provision for income taxes |  | $ | 10,534 |  |  | $ | 3,786 |
The provision for income taxes, as a percentage of income from continuing operations before provision for income taxes, differs from the statutory U.S. federal income tax rate due to the following:
Year Ended December 31, |  | 2024 |  | 2023
Statutory U.S. federal income tax rate |  | 21.0 | % |  | 21.0 | %
State income taxes, net of U.S. federal income tax benefit |  | (1.2) |  |  | (0.4) |
U.S. tax impact of foreign operations |  | (9.2) |  |  | (25.3) |
Valuation allowance change |  | 6.0 |  |  | 5.4 |
Unrecognized tax benefits |  | 1.8 |  |  | 1.8 |
Permanent foreign items |  | 5.2 |  |  | 4.8 |
Withholding tax on royalties |  | 29.3 |  |  | 5.1 |
Executive compensation |  | 3.3 |  |  | 1.2 |
Stock compensation |  | (0.2) |  |  | (0.1) |
Tax return to provision differences |  | (1.0) |  |  | (7.9) |
Income eliminated in consolidation |  | 1.9 |  |  | 13.8 |
Other |  | 0.3 |  |  | (0.7) |
Effective income tax rate |  | 57.2 | % |  | 18.7 | %
Adjustments relating to the U.S. impact of foreign operations decreased the effective tax rate by 9.2 percentage points and 25.3 percentage points in 2024 and 2023, respectively. The components of this calculation were:
Components of U.S. tax impact of foreign operations |  | 2024 |  | 2023
Foreign tax credits |  | 1.0 | % |  | (26.7) | %
Foreign tax rate differentials |  | 0.1 |  |  | 0.4 |
Foreign withholding taxes |  | 3.9 |  |  | 4.5 |
Transfer pricing adjustment |  | 0.8 |  |  | 1.4 |
Impact of Subpart F |  | — |  |  | 0.7 |
Impact of GILTI |  | (0.8) |  |  | (2.4) |
Impact of FDII |  | (14.2) |  |  | (3.2) |
Total |  | (9.2) | % |  | (25.3) | %
The significant components of the deferred tax assets (liabilities) are as follows (dollar amounts in thousand s):
As of December 31, |  | 2024 |  | 2023
Inventory |  | $ | 2,159 |  |  | $ | 1,881 |
Accrued liabilities |  | 2,256 |  |  | 2,263 |
Operating lease liabilities |  | 2,136 |  |  | 2,363 |
Deferred compensation |  | 215 |  |  | 166 |
Share-based compensation |  | 1,260 |  |  | 1,059 |
Intangible assets |  | 112 |  |  | 101 |
Bad debts |  | 12 |  |  | 23 |
Net operating losses |  | 5,407 |  |  | 4,358 |
Foreign tax and withholding credits |  | 12,393 |  |  | 16,707 |
Accrued compensation |  | 1,096 |  |  | 2,178 |
Fixed assets |  | 8,824 |  |  | 2,606 |
Other deferred tax assets |  | 2,770 |  |  | 2,135 |
Valuation allowance |  | (18,864) |  |  | (18,534) |
Total deferred tax assets |  | 19,776 |  |  | 17,306 |
Right of use assets |  | (1,867) |  |  | (2,082) |
Tax on unremitted earnings |  | (1,233) |  |  | (1,508) |
Other deferred tax liabilities |  | (39) |  |  | (53) |
Total deferred tax liabilities |  | (3,139) |  |  | (3,643) |
Total deferred taxes, net |  | $ | 16,637 |  |  | $ | 13,663 |
The components of deferred tax assets (liabilities), net are as follows (dollar amounts in thousands):
As of December 31, |  | 2024 |  | 2023
Net deferred tax assets |  | $ | 17,644 |  |  | $ | 15,064 |
Net deferred tax liabilities |  | (1,007) |  |  | (1,401) |
Total deferred taxes, net |  | $ | 16,637 |  |  | $ | 13,663 |
We have elected the period cost method (costs are treated as a current period expense when incurred) under U.S. GAAP as it relates to GILTI income inclusions in U.S. taxable income. Each reporting period we analyze our indefinite reinvestment assertions with respect to undistributed foreign earnings. As of December 31, 2024, we continue to assert that we do not intend to reinvest undistributed foreign earnings indefinitely in our foreign subsidiaries. We have provided a valuation allowance of $18.9 million and $18.5 million as of December 31, 2024 and 2023, respectively, for certain deferred tax assets, including foreign net operating losses, for which we cannot conclude it is more likely than not that they will be realized. We reviewed our tax positions and removed the deferred tax asset and associated valuation allowance for tax credits which expired at the end of the period. We increased the valuation allowance for other deferred tax assets which we do not expect to use before expiration. For financial reporting purposes, the increase in valuation allowances increases income tax expense in the year recorded. At December 31, 2024, we had approximately $12.4 million of foreign tax and withholding credits. Of the $12.4 million credits, $12.1 million are foreign tax credits, many of which we do not expect to use before expiration and are offset by a valuation allowance. At December 31, 2024, foreign subsidiaries had unused operating loss carryovers for tax purposes of approximately $5.4 million, tax effected. The net operating losses will expire at various dates from 2025 through 2035, with the exception of those in some foreign jurisdictions where there is no expiration. The foreign net operating losses have a valuation allowance recorded against the portion expected to expire before utilization. We are subject to regular audits by federal, state and foreign tax authorities. These audits may result in additional tax liabilities. We believe we have appropriately provided for income taxes for all years. Several factors drive the calculation of our tax reserves. Some of these factors include: (i) the expiration of various statutes of limitations; (ii) changes in tax law and regulations; (iii) the issuance of tax rulings and (iv) settlements with tax authorities. Changes in any of these factors may result in adjustments to our reserves, which would impact our reported financial results. Our U.S. federal income tax returns for 2021 through 2023 are open to examination for federal tax purposes. We have several foreign tax jurisdictions that have open tax years from 2019 through 2023. The total outstanding balance for liabilities related to unrecognized tax benefits at December 31, 2024 and 2023 was $0.9 million and $0.6 million, respectively, all of which would favorably impact the rate if recognized. Included in these amounts is approximately $0.1 million and $0.1 million, respectively, of combined interest and penalties. We increased interest and penalties approximately $8,000 and $13,000 for the years ended December 31, 2024 and 2023, respectively. We account for interest expense and penalties for unrecognized tax benefits as part of our income tax provision. During the years ended December 31, 2024 and 2023, we added approximately $0.3 million and $0.4 million, respectively, to our liability for unrecognized tax benefits. A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax benefits, excluding interest and penalties, is as follows for the years (dollar amounts in thousands):
Year Ended December 31, |  | 2024 |  | 2023
Unrecognized tax benefits, opening balance |  | $ | 471 |  |  | $ | 110 |
Settlement of liability reclassified as income tax payable |  | — |  |  | — |
Payments on liability |  | — |  |  | — |
Tax positions taken in a prior period |  |  |  |
Gross increases |  | 318 |  |  | 360 |
Gross decreases |  | — |  |  | — |
Tax positions taken in the current period |  |  |  |
Gross increases |  | — |  |  | — |
Gross decreases |  | — |  |  | — |
Lapse of applicable statute of limitations |  | — |  |  | — |
Currency translation adjustments |  | (10) |  |  | 1 |
Unrecognized tax benefits, ending balance |  | $ | 779 |  |  | $ | 471 |
We do not anticipate a significant change to liabilities related to unrecognized tax benefits within the next twelve months. Although we believe our estimates are reasonable, we can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in our historical income tax provisions and accruals. Such differences could have a material impact on our income tax provision and operating results in the period in which we make such determination.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration