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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax expense 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, |  | 2023 |  | 2022 |  | 2021
(Loss) income before income taxes: |  |  |  |  |  |
Domestic |  | $ | (29,658) |  |  | $ | (11,944) |  |  | $ | 11,596 |
Foreign |  | 27,736 |  |  | 1,248 |  |  | 840 |
Total (loss) income before income taxes |  | $ | (1,922) |  |  | $ | (10,696) |  |  | $ | 12,436 |
Provision (benefit) for income taxes: |  |  |  |  |  |
Current: |  |  |  |  |  |
Federal |  | $ | 219 |  |  | $ | 435 |  |  | $ | — |
State and local |  | (101) |  |  | 747 |  |  | 294 |
Foreign |  | 7,181 |  |  | 7,288 |  |  | 9,248 |
Total current provision |  | $ | 7,299 |  |  | $ | 8,470 |  |  | $ | 9,542 |
Deferred: |  |  |  |  |  |
Federal |  | $ | (2,265) |  |  | $ | (3,282) |  |  | $ | 714 |
State and local |  | 2 |  |  | (25) |  |  | (55) |
Foreign |  | (1,775) |  |  | (1,803) |  |  | (1,171) |
Total deferred benefit |  | (4,038) |  |  | (5,110) |  |  | (512) |
Total income tax provision |  | $ | 3,261 |  |  | $ | 3,360 |  |  | $ | 9,030 |
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, |  | 2023 |  | 2022 |  | 2021
Statutory U.S. federal income tax (benefit) provision |  | $ | (403) |  |  | $ | (2,246) |  |  | $ | 2,612 |
State income taxes, net of federal tax benefit |  | (136) |  |  | 495 |  |  | 942 |
Tax credits and incentives |  | (4,886) |  |  | (3,906) |  |  | (2,865) |
Foreign tax rate differential |  | 706 |  |  | 910 |  |  | 730 |
Impact of change in enacted tax law |  | 5 |  |  | 300 |  |  | 227 |
Change in valuation allowance |  | 1,817 |  |  | 5,248 |  |  | 5,070 |
U.S. tax on foreign earnings |  | 4,815 |  |  | 1,376 |  |  | (347) |
Tax impact of unconsolidated subsidiaries |  | — |  |  | 395 |  |  | 1,828 |
Unremitted earnings on foreign subsidiaries |  | — |  |  | (898) |  |  | 835 |
Non-deductible expenses |  | 1,338 |  |  | 657 |  |  | 740 |
Compensation and benefits |  | 306 |  |  | 774 |  |  | 358 |
Other |  | (301) |  |  | 255 |  |  | (1,100) |
Provision for income taxes |  | $ | 3,261 |  |  | $ | 3,360 |  |  | $ | 9,030 |
Significant components of the Company’s deferred tax assets and liabilities were as follows:
As of December 31, |  | 2023 |  | 2022
Deferred tax assets: |  |  |  |
Inventories |  | $ | 1,678 |  |  | $ | 1,479 |
Employee compensation and benefits |  | 2,324 |  |  | 2,078 |
Accrued liabilities and reserves |  | 6,466 |  |  | 5,862 |
Property, plant and equipment |  | 3,290 |  |  | 2,794 |
Tax loss carryforwards |  | 18,129 |  |  | 16,997 |
Tax credit carryforwards |  | 22,191 |  |  | 20,802 |
Capitalized research and development |  | 4,345 |  |  | 4,785 |
Lease liability |  | 2,351 |  |  | 2,817 |
Other |  | 1,040 |  |  | 1,213 |
Gross deferred tax assets |  | 61,814 |  |  | 58,827 |
Less: Valuation allowance |  | (21,082) |  |  | (18,496) |
Deferred tax assets less valuation allowance |  | 40,732 |  |  | 40,331 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | (1,271) |  |  | (2,038) |
Intangible assets |  | (8,942) |  |  | (10,056) |
Right-of-use-assets |  | (2,059) |  |  | (2,595) |
Other |  | (5,292) |  |  | (4,991) |
Gross deferred tax liabilities |  | (17,564) |  |  | (19,680) |
Net deferred tax assets |  | $ | 23,168 |  |  | $ | 20,651 |
The balance sheet classification of our net deferred tax asset is shown below:
Year ended December 31, |  | 2023 |  | 2022
Long-term deferred tax assets |  | $ | 30,392 |  |  | $ | 29,149 |
Long-term deferred tax liabilities |  | (7,224) |  |  | (8,498) |
Net deferred tax assets |  | $ | 23,168 |  |  | $ | 20,651 |
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, 2023, the aggregate undistributed earnings of our foreign subsidiaries amounted to $27,211. Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at December 31, 2023, 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 $39,638 and $77,027 for state and foreign tax jurisdictions, respectively. The state net operating losses expire from 2024-2043 or have indefinite lives and the foreign net operating losses expire from 2024-2028 or have indefinite lives. The Company has general business and foreign tax credit carry forwards of $20,422, $1,054 and $714 for U.S. federal, state and foreign jurisdictions, respectively. The U.S. federal general business credits, if unused, begin to expire in 2027, 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:
| 2023 |  | 2022 |  | 2021
Balance as of January 1 | $ | 2,545 |  |  | $ | 2,891 |  |  | $ | 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 |  |  | $ | 2,545 |  |  | $ | 2,891 |
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 at December 31, 2023 and 2022. 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, 2023, 2022 and 2021, the Company recognized no expense related to interest and penalties. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 ("IRA"), 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. The IRA did not have a material impact on the Company's consolidated financial statements. 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 |  | 2017-2023
Argentina |  | 2018-2023
Brazil |  | 2015-2023
China |  | 2019-2023
France |  | 2020-2023
Germany |  | 2019-2023
Italy |  | 2018-2023
Mauritius |  | 2017-2023
Mexico |  | 2018-2023
Netherlands |  | 2019-2023
Sweden |  | 2018-2023
United Kingdom |  | 2022-2023

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