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Income Taxes
 12 Months Ended
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 31,202220212020
(Loss) income before income taxes:
Domestic$(11,944)$11,596 $(25,403)
Foreign1,248 840 14,679 
Total (loss) income before income taxes$(10,696)$12,436 $(10,724)
Provision (benefit) for income taxes:
Current:
Federal$435 $— $(3)
State and foreign8,035 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 $(2,774)
A summary of the differences between the statutory federal income tax rate of 21.0% and the consolidated provision for income taxes is shown below.
Year ended December 31,202220212020
Statutory U.S. federal income tax (benefit) provision$(2,246)$2,612 $(2,252)
State income taxes, net of federal tax benefit495 942 (647)
Tax credits and incentives(4,060)(3,316)(2,791)
Foreign tax rate differential910 730 90 
Impact of change in enacted tax law300 227 1,108 
Change in valuation allowance5,248 5,070 2,174 
U.S. tax on foreign earnings1,376 (347)(519)
Tax impact of unconsolidated subsidiaries395 1,828 (323)
Unremitted earnings on foreign subsidiaries(898)835 86 
Non-deductible expenses657 740 498 
Compensation and benefits774 358 362 
Other409 (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 31,20222021
Deferred tax assets:
Inventories$1,479 $1,692 
Employee compensation and benefits2,078 2,420 
Accrued liabilities and reserves5,862 4,486 
Property, plant and equipment2,794 751 
Tax loss carryforwards16,997 13,479 
Tax credit carryforwards20,802 24,173 
Capitalized research and development4,785 — 
Lease liability2,817 3,712 
Other1,213 647 
Gross deferred tax assets58,827 51,360 
Less: Valuation allowance(18,496)(14,516)
Deferred tax assets less valuation allowance40,331 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 31,20222021
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:
202220212020
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:
JurisdictionOpen 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