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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 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 (loss) income before income taxes and the provision (benefit) for income taxes consist of the following:
Year ended December 31, |  | 2022 |  | 2021 |  | 2020
(Loss) income before income taxes: |  |  |  |  |  |
Domestic |  | $ | (11,944) |  |  | $ | 11,596 |  |  | $ | (25,403) |
Foreign |  | 1,248 |  |  | 840 |  |  | 14,679 |
Total (loss) income before income taxes |  | $ | (10,696) |  |  | $ | 12,436 |  |  | $ | (10,724) |
Provision (benefit) for income taxes: |  |  |  |  |  |
Current: |  |  |  |  |  |
Federal |  | $ | 435 |  |  | $ | — |  |  | $ | (3) |
State and foreign |  | 8,035 |  |  | 9,542 |  |  | 5,182 |
Total current expense |  | $ | 8,470 |  |  | $ | 9,542 |  |  | $ | 5,179 |
Deferred: |  |  |  |  |  |
Federal |  | $ | (3,282) |  |  | $ | 714 |  |  | $ | (8,512) |
State and foreign |  | (1,828) |  |  | (1,226) |  |  | 559 |
Total deferred benefit |  | (5,110) |  |  | (512) |  |  | (7,953) |
Total income tax expense (benefit) |  | $ | 3,360 |  |  | $ | 9,030 |  |  | $ | (2,774) |
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, |  | 2022 |  | 2021 |  | 2020
Statutory U.S. federal income tax (benefit) provision |  | $ | (2,246) |  |  | $ | 2,612 |  |  | $ | (2,252) |
State income taxes, net of federal tax benefit |  | 495 |  |  | 942 |  |  | (647) |
Tax credits and incentives |  | (4,060) |  |  | (3,316) |  |  | (2,791) |
Foreign tax rate differential |  | 910 |  |  | 730 |  |  | 90 |
Impact of change in enacted tax law |  | 300 |  |  | 227 |  |  | 1,108 |
Change in valuation allowance |  | 5,248 |  |  | 5,070 |  |  | 2,174 |
U.S. tax on foreign earnings |  | 1,376 |  |  | (347) |  |  | (519) |
Tax impact of unconsolidated subsidiaries |  | 395 |  |  | 1,828 |  |  | (323) |
Unremitted earnings on foreign subsidiaries |  | (898) |  |  | 835 |  |  | 86 |
Non-deductible expenses |  | 657 |  |  | 740 |  |  | 498 |
Compensation and benefits |  | 774 |  |  | 358 |  |  | 362 |
Other |  | 409 |  |  | (649) |  |  | (560) |
Provision (benefit) for income taxes |  | $ | 3,360 |  |  | $ | 9,030 |  |  | $ | (2,774) |
Significant components of the Company’s deferred tax assets and liabilities were as follows:
As of December 31, |  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Inventories |  | $ | 1,479 |  |  | $ | 1,692 |
Employee compensation and benefits |  | 2,078 |  |  | 2,420 |
Accrued liabilities and reserves |  | 5,862 |  |  | 4,486 |
Property, plant and equipment |  | 2,794 |  |  | 751 |
Tax loss carryforwards |  | 16,997 |  |  | 13,479 |
Tax credit carryforwards |  | 20,802 |  |  | 24,173 |
Capitalized research and development |  | 4,785 |  |  | — |
Lease liability |  | 2,817 |  |  | 3,712 |
Other |  | 1,213 |  |  | 647 |
Gross deferred tax assets |  | 58,827 |  |  | 51,360 |
Less: Valuation allowance |  | (18,496) |  |  | (14,516) |
Deferred tax assets less valuation allowance |  | 40,331 |  |  | 36,844 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | (2,038) |  |  | (1,235) |
Intangible assets |  | (10,056) |  |  | (11,767) |
Right-of-use-assets |  | (2,595) |  |  | (3,493) |
Other |  | (4,991) |  |  | (5,021) |
Gross deferred tax liabilities |  | (19,680) |  |  | (21,516) |
Net deferred tax assets |  | $ | 20,651 |  |  | $ | 15,328 |
The balance sheet classification of our net deferred tax asset is shown below:
Year ended December 31, |  | 2022 |  | 2021
Long-term deferred tax assets |  | $ | 29,149 |  |  | $ | 26,034 |
Long-term deferred tax liabilities |  | (8,498) |  |  | (10,706) |
Net deferred tax assets |  | $ | 20,651 |  |  | $ | 15,328 |
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, 2022, the aggregate undistributed earnings of our foreign subsidiaries amounted to $36,155. Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at December 31, 2022, 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. Certain deferred tax assets are dependent on future taxable income to be realized. The Company has net operating loss carry forwards of $48,430 and $73,553 for state and foreign tax jurisdictions, respectively. The state net operating losses expire from 2023-2041 and the foreign net operating losses expire from 2023-2027 or have indefinite lives. The Company has general business and foreign tax credit carry forwards of $19,055, $1,083 and $664 for U.S. federal, state and foreign jurisdictions, respectively. The U.S. federal general business credits, if unused, begin to expire in 2026, 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:
| 2022 |  | 2021 |  | 2020
Balance as of January 1 | $ | 2,891 |  |  | $ | 3,449 |  |  | $ | 3,449 |
Tax positions related to the current year: |  |  |  |  |
Additions | — |  |  | — |  |  | — |
Tax positions related to the prior years: |  |  |  |  |
Reductions | — |  |  | — |  |  | — |
Expirations of statutes of limitation | (346) |  |  | (558) |  |  | — |
Balance as of December 31 | $ | 2,545 |  |  | $ | 2,891 |  |  | $ | 3,449 |
The Company has classified its uncertain tax positions 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 $2,545 and $2,891 at December 31, 2022 and 2021, 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, 2022, 2021 and 2020, the Company recognized no expense related to interest and penalties. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which, among other things, implemented a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on its current analysis of the provisions, the Company does not believe this legislation will have a material impact on our results of operations, but the Company is continuing to evaluate the implications. 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 |  | 2017-2022
Argentina |  | 2017-2022
Brazil |  | 2015-2022
China |  | 2018-2022
France |  | 2019-2022
Germany |  | 2019-2022
Italy |  | 2017-2022
Mauritius |  | 2019-2022
Mexico |  | 2017-2022
Netherlands |  | 2018-2022
Sweden |  | 2017-2022
United Kingdom |  | 2021-2022

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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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