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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Provision for Income Tax | Provision for income taxes reflected in the accompanying consolidated statements of operations are comprised of the following (in thousands):
| Year ended December 31,
| 2017 |  | 2018 |  | 2019
Federal | $ | 550 |  |  | $ | (1,475 | ) |  | $ | (212 | )
State and local | 51 |  |  | 62 |  |  | 66 |
Foreign | 2,256 |  |  | 4,154 |  |  | 3,037 |
Total Current | 2,857 |  |  | 2,741 |  |  | 2,891 |
Deferred | (1,251 | ) |  | 210 |  |  | (979 | )
Total | $ | 1,606 |  |  | $ | 2,951 |  |  | $ | 1,912 |
Components of Deferred Tax Assets (Liabilities) | The components of deferred tax assets/(liabilities) are as follows (in thousands):
| December 31, |
| 2018 |  | 2019 |
Net deferred tax assets/(liabilities): |  |  |  |
Reserve for sales allowances and possible losses | $ | 478 |  |  | $ | 686 |  |
Accrued expenses | 938 |  |  | 2,381 |  |
Prepaid royalties | 2,659 |  |  | 6,224 |  |
Accrued royalties | 5,973 |  |  | 2,314 |  |
Inventory | 10,751 |  |  | 10,309 |  |
State income taxes | 19 |  |  | 17 |  |
Property and equipment | 2,635 |  |  | 1,952 |  |
Goodwill and intangibles | 11,542 |  |  | 9,185 |  |
Share-based compensation | 773 |  |  | 894 |  |
Undistributed foreign earnings | (2,121 | ) |  | (1,970 | ) |
Interest limitation | 2,210 |  |  | 3,539 |  |
Operating lease right-of-use assets | — |  |  | (7,422 | ) |
Operating lease liabilities | — |  |  | 8,195 |  |
Federal and state net operating loss carryforwards | 46,759 |  |  | 53,845 |  |
Credit carryforwards | 1,121 |  |  | 909 |  |
Other | (633 | ) |  | 1,706 |  |
Gross | 83,104 |  |  | 92,764 |  |
Valuation allowance | (84,097 | ) |  | (92,778 | ) |
Total net deferred tax liabilities | $ | (993 | ) | * | $ | (14 | ) | *
*As of December 31, 2018, a deferred tax asset of $438 was reported as other long term assets in the consolidated balance sheets and $1,431 was reported as a deferred income tax liability, net in the consolidated balance sheets. As of December 31, 2019, a deferred tax asset of $212 was reported as other long term assets in the consolidated balance sheets and $226 was reported as a deferred income tax liability, net in the consolidated balance sheets.
Significant Differences in Tax at Statutory and Effective Rates | The following reconciliation shows the significant differences in the tax at statutory and effective rates:
| Year ended December 31,
| 2017 |  | 2018 |  | 2019
Federal income tax expense | 35.0 | % |  | 21.0 | % |  | 21.0 | %
State income tax expense, net of federal tax effect | 5.0 |  |  | 9.7 |  |  | 6.1 |
Effect of differences in U.S. and foreign statutory rates | 1.9 |  |  | 2.0 |  |  | 0.6 |
Uncertain tax positions | — |  |  | (0.8 | ) |  | (0.3 | )
Provision to return | (0.7 | ) |  | (40.6 | ) |  | (1.6 | )
Non-deductible expenses | (48.0 | ) |  | (16.9 | ) |  | (13.0 | )
Other | (0.2 | ) |  | (0.6 | ) |  | (0.4 | )
Foreign tax credit | 20.3 |  |  | — |  |  | — |
Undistributed foreign earnings | 57.3 |  |  | 4.5 |  |  | 0.2 |
Effect of change in federal statutory rate | (23.0 | ) |  | — |  |  | — |
Valuation allowance | (49.6 | ) |  | 14.2 |  |  | (16.2 | )
| (2.0 | )% |  | (7.5 | )% |  | (3.6 | )%
Income (Loss) Before Provision for Income Tax | The components of income (loss) before provision for income taxes are as follows (in thousands):
| Year ended December 31,
| 2017 |  | 2018 |  | 2019
Domestic | $ | (85,288 | ) |  | $ | (58,693 | ) |  | $ | (61,798 | )
Foreign | 3,866 |  |  | 19,219 |  |  | 8,331 |
| $ | (81,422 | ) |  | $ | (39,474 | ) |  | $ | (53,467 | )
Effective Tax Rate | The following table provides further information of UTPs that would affect the effective tax rate, if recognized, as of December 31, 2019 (in millions):
Balance, December 31, 2016 | $ | 2.3 |
Current year additions | 0.1 |
Current year reduction due to lapse of applicable statute of limitations | (1.1 | )
Balance, December 31, 2017 | 1.3 |
Current year additions | 0.6 |
Current year reduction due to audit settlement | (0.4 | )
Balance, December 31, 2018 | 1.5 |
Current year additions | 0.1 |
Balance, December 31, 2019 | $ | 1.6 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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