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Income Taxes
 12 Months Ended
Dec. 31, 2024
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 31,202420232022
(Loss) income before income taxes:
Domestic$(45,419)$(29,658)$(11,944)
Foreign31,822 27,736 1,248 
Total loss before income taxes$(13,597)$(1,922)$(10,696)
Provision (benefit) for income taxes:
Current:
Federal$(653)$219 $435 
State and local(49)(101)747 
Foreign9,371 7,181 7,288 
Total current provision$8,669 $7,299 $8,470 
Deferred:
Federal$(3,536)$(2,265)$(3,282)
State and local(445)2 (25)
Foreign(1,761)(1,775)(1,803)
Total deferred benefit(5,742)(4,038)(5,110)
Total income tax provision$2,927 $3,261 $3,360 
A summary of the differences between the statutory federal income tax rate of 21.0% and the consolidated provision for income taxes is shown below.
Year ended December 31,202420232022
Statutory U.S. federal income tax benefit$(2,855)$(403)$(2,246)
State income taxes, net of federal tax benefit(542)(136)495 
Tax credits and incentives(2,585)(4,886)(3,906)
Foreign tax rate differential245 706 910 
Impact of change in enacted tax law3 5 300 
Change in valuation allowance(1,663)1,817 5,248 
U.S. tax on foreign earnings5,922 4,815 1,376 
Tax reserves and audit adjustments4,054 — (346)
Tax impact of unconsolidated subsidiaries— — 395 
Unremitted earnings on foreign subsidiaries(22)— (898)
Non-deductible expenses607 1,338 657 
Compensation and benefits478 306 774 
Other(715)(301)601 
Provision for income taxes$2,927 $3,261 $3,360 
Significant components of the Company’s deferred tax assets and liabilities were as follows:
As of December 31,20242023
Deferred tax assets:
Inventories$1,478 $1,678 
Employee compensation and benefits1,870 2,324 
Accrued liabilities and reserves6,981 6,466 
Property, plant and equipment3,657 3,290 
Tax loss carryforwards13,071 18,129 
Tax credit carryforwards23,921 22,191 
Capitalized research and development4,665 4,345 
Disallowed interest deduction3,575 380 
Lease liability2,339 2,351 
Other1,659 660 
Gross deferred tax assets63,216 61,814 
Less: Valuation allowance(17,632)(21,082)
Deferred tax assets less valuation allowance45,584 40,732 
Deferred tax liabilities:
Property, plant and equipment(767)(1,271)
Intangible assets(6,577)(8,942)
Right-of-use-assets(2,148)(2,059)
Other(3,943)(5,292)
Gross deferred tax liabilities(13,435)(17,564)
Net deferred tax assets$32,149 $23,168 
The balance sheet classification of our net deferred tax asset is shown below:
Year ended December 31,20242023
Long-term deferred tax assets$37,470 $30,392 
Long-term deferred tax liabilities(5,321)(7,224)
Net deferred tax assets$32,149 $23,168 
The Company has recognized deferred taxes related to the expected foreign currency impact upon repatriation from foreign subsidiaries not considered indefinitely reinvested. At December 31, 2024, the aggregate undistributed earnings of our foreign subsidiaries amounted to $35,670.
Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at December 31, 2024, 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 $50,495 and $53,487 for state and foreign tax jurisdictions, respectively. The state net operating losses expire from 2025-2044 or have indefinite lives and the foreign net operating losses expire from 2025-2029 or have indefinite lives. The Company has general business and foreign tax credit carry forwards of $22,111, $1,020 and $790 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.
As of December 31, 2024, the Company has consolidated deferred tax assets of $63,216 with a valuation allowance of $17,632 principally related to tax credit carryforwards, tax loss carryforwards and other deferred tax assets in Sweden, Brazil, and the US. The Company has considered historical pre-tax income or loss and the four sources of income in determining the need for a valuation allowance when the realization of its deferred tax assets are not more likely than not. The four sources of income considered are 1.) taxable income in prior carryback years where carryback is allowable, 2.) future reversals of existing temporary differences, 3.) consideration of reasonable and prudent tax planning strategies, and 4.) forecasts of future taxable income, exclusive of reversing temporary differences and carryforwards. In the cases where a valuation allowance has been recorded, the evidence described above did not result in a conclusion that the deferred tax assets are more likely than not to be realizable. Current and future provision for income taxes is significantly impacted by the initial recognition of and changes in valuation allowances. The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. The Company is significantly impacted by the GILTI tax provisions of the US tax code, and should those provisions change, it could have a material impact on our assessment of the realizability of general business credits in the US for which we currently believe are more likely than not to be realized based on the considerations noted above.
The following is a reconciliation of the Company’s total gross unrecognized tax benefits:
202420232022
Balance as of January 1$2,545 $2,545 $2,891 
Tax positions related to the current year:
Additions2,298 — — 
Tax positions related to the prior years:
Reductions— — — 
Expirations of statutes of limitation— — (346)
Cumulative translation adjustment(97)— — 
Balance as of December 31$4,746 $2,545 $2,545 
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 $4,746 and $2,545 at December 31, 2024 and 2023, respectively.
The Company classifies interest expense and, if applicable, penalties which could be assessed related to unrecognized tax benefits as a component of provision for income taxes. The Company recognized interest and penalties of $34, $0 and $0 for the years ended December 31, 2024, 2023 and 2022, respectively.
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. For the years ended December 31, 2024 and 2023, 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:
JurisdictionOpen Tax Years
U.S. Federal
2017-2024
Argentina
2019-2024
Brazil
2015-2024
China
2019-2024
France
2021-2024
Germany
2020-2024
Italy
2019-2024
Mauritius
2021-2024
Mexico
2019-2024
Netherlands
2020-2024
Sweden
2019-2024
United Kingdom
2023-2024