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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Income Taxes

6. Income Taxes

The income tax expense (benefit) included in the accompanying consolidated statement of operations represents federal, state and foreign income taxes. The components of income (loss) before income taxes and the (benefit) provision for income taxes consist of the following:

​

​	​	​	​	​	​	​	​	​	​
Year ended December 31,		2021			2020			2019
Income before income taxes:	​	​	​	​	​	​	​	​	​
Domestic	​	$	11,596	​	$	(25,403)	​	$	30,464
Foreign	​	​	840	​	​	14,679	​	​	37,929
Total income before income taxes	​	$	12,436	​	$	(10,724)	​	$	68,393
​	​	​	​	​	​	​	​	​	​
Provision for income taxes:	​	​	​	​	​	​	​	​	​
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	-	​	$	(3)	​	$	(4,384)
State and foreign	​	​	9,542	​	​	5,182	​	​	6,900
Total current expense	​	$	9,542	​	$	5,179	​	$	2,516
​	​	​	​	​	​	​	​	​	​
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​	$	714	​	$	(8,512)	​	$	6,780
State and foreign	​	​	(1,226)	​	​	559	​	​	(1,194)
Total deferred benefit	​	​	(512)	​	​	(7,953)	​	​	5,586
Total income tax expense	​	$	9,030	​	$	(2,774)	​	$	8,102
​	​	​	​	​	​	​	​	​	​

​

A summary of the differences between the statutory federal income tax rate of 21.0% and the consolidated provision for income taxes is shown below.

​

​	​	​	​	​	​	​	​	​	​	​
Year ended December 31,		​	2021		​	2020		​	2019	​
Statutory U.S. federal income tax provision (benefit)	​	$	2,612	​	$	(2,252)	​	$	14,363	​
State income taxes, net of federal tax benefit	​	​	942	​	​	(647)	​	​	152	​
Tax credits and incentives	​	​	(3,316)	​	​	(2,791)	​	​	(6,297)	​
Foreign tax rate differential	​	​	730	​	​	90	​	​	1,347	​
Impact of change in enacted tax law	​	​	227	​	​	1,108	​	​	993	​
Change in valuation allowance	​	​	5,070	​	​	2,174	​	​	(138)	​
U.S. tax on foreign earnings	​	​	(347)	​	​	(519)	​	​	(3,373)	​
Tax impact of unconsolidated subsidiaries	​	​	1,828	​	​	(323)	​	​	(331)	​
Unremitted earnings on foreign subsidiaries	​	​	835	​	​	86	​	​	-	​
Compensation and benefits	​	​	358	​	​	362	​	​	(469)	​
Other	​	​	91	​	​	(62)	​	​	1,855	​
Provision (benefit) for income taxes	​	$	9,030	​	$	(2,774)	​	$	8,102	​
​	​	​	​	​	​	​	​	​	​	​

​

Significant components of the Company’s deferred tax assets and liabilities were as follows:

​

​	​	​	​	​	​	​
As of December 31,		2021			2020
Deferred tax assets:	​	​	​	​	​	​
Inventories	​	$	1,692		$	1,858
Employee compensation and benefits	​		2,420			2,306
Accrued liabilities and reserves	​		4,486			3,649
Property, plant and equipment	​		751			943
Tax loss carryforwards	​		13,479			12,307
Tax credit carryforwards	​		24,173			22,949
Lease liability	​	​	3,712	​	​	4,199
Other	​		647			897
Gross deferred tax assets	​		51,360			49,108
Less: Valuation allowance	​		(14,516)			(10,237)
Deferred tax assets less valuation allowance	​		36,844			38,871
​	​	​	​	​	​	​
Deferred tax liabilities:	​	​	​	​	​	​
Property, plant and equipment	​		(1,235)			(2,400)
Intangible assets	​		(11,767)			(13,630)
Right-of-use-assets	​		(3,493)			(4,076)
Other	​		(5,021)			(4,793)
Gross deferred tax liabilities	​		(21,516)			(24,899)
Net deferred tax assets	​	$	15,328		$	13,972

​

The balance sheet classification of our net deferred tax asset is shown below:

​

​	​	​	​	​	​	​
Year ended December 31,		2021			2020
Long-term deferred tax assets	​	$	26,034	​	$	26,907
Long-term deferred tax liabilities	​	​	(10,706)	​	​	(12,935)
Net deferred tax assets	​	$	15,328	​	$	13,972

​

The Company has recognized deferred taxes related to foreign withholding taxes and the expected foreign currency impact upon repatriation from foreign subsidiaries not considered indefinitely reinvested. At December 31, 2021, the aggregate undistributed earnings of our foreign subsidiaries amounted to $43,530.

Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at December 31, 2021, a valuation allowance is recorded against certain deferred tax assets based upon the conclusion that it was more likely than not they would not be realized.

The Company has net operating loss carry forwards of $76,986 and $53,761 for state and foreign tax jurisdictions, respectively. The state net operating losses expire from 2030-2041 or have indefinite lives and the foreign net operating losses expire from 2022-2026 or have indefinite lives. The Company has general business and foreign tax credit carry forwards of $22,087, $963 and $1,122 for U.S. federal, state and foreign jurisdictions, respectively. The U.S. federal general business credits, if unused, begin to expire in 2025, and the state and foreign tax credits expire at various times.

The following is a reconciliation of the Company’s total gross unrecognized tax benefits:

​

​	​	​	​	​	​	​	​	​	​
​		2021			2020			2019
Balance as of January 1	​	$	3,449	​	$	3,449	​	$	3,481
Tax positions related to the current year:	​	​	​	​	​	​	​	​	​
Additions	​	​	-	​	​	-	​	​	-
Tax positions related to the prior years:	​	​	​	​	​	​	​	​	​
Reductions	​	​	-	​	​	-	​	​	(32)
Expirations of statutes of limitation	​	​	(558)	​	​	-	​	​	-
Balance as of December 31	​	$	2,891	​	$	3,449	​	$	3,449

​

At December 31, 2021, the Company has classified $2,891 as a reduction to non-current deferred income tax assets. If the Company’s tax positions are sustained by the taxing authorities in favor of the Company, the amount that would affect the Company’s effective tax rate is approximately $2,891 and $3,449 at December 31, 2021 and 2020, respectively.

The Company classifies interest expense and, if applicable, penalties which could be assessed related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2021, 2020 and 2019, the Company recognized approximately $0, $0 and $(5) of gross interest and penalties, respectively.

The Company conducts business globally and, as a result, files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The following table summarizes the open tax years for each jurisdiction:

​

​	​	​	​
Jurisdiction		Open Tax Years
U.S. Federal	​	​	2017-2021
Argentina	​	​	2016-2021
Brazil	​	​	2014-2021
China	​	​	2018-2021
France	​	​	2018-2021
Germany	​	​	2017-2021
Italy	​	​	2016-2021
Mexico	​	​	2016-2022
Netherlands	​	​	2017-2021
Spain	​	​	2017-2021
Sweden	​	​	2016-2021
United Kingdom	​	​	2020-2021

​

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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

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