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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of (loss) income before income taxes and equity in losses are as follows:
 Year Ended December 31,
 202420232022
 (in thousands)
Domestic$16,509 $22,134 $20,796 
Foreign(12,099)(11,659)(11,767)
Foreign - loss on equity securities
(14,152)— — 
Total (loss) income before income taxes and equity in earnings
$(9,742)$10,475 $9,029 
The provision for income taxes (before equity in losses) consists of:
Year Ended December 31,
202420232022
(in thousands)
Current:
Federal$4,254 $6,326 $6,890 
State and local913 1,447 1,888 
Foreign203 579 775 
Deferred(2,039)(2,130)(3,825)
Income tax provision
$3,331 $6,222 $5,728 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred income tax assets and (liabilities) are as follows:
 December 31,
 20242023
 (in thousands)
Deferred income tax assets:
Operating lease liabilities$17,257 $20,571 
Stock options819 1,454 
Inventory2,573 3,323 
Operating loss carryforwards23,262 21,036 
Accounts receivable allowances2,473 2,343 
Accrued compensation979 913 
Deferred compensation448 668 
Environmental remediation accrual1,331 1,379 
Capitalized research and experimental expenditures3,881 3,109 
Section 163j interest carryforward
2,458 904 
Other1,971 1,536 
Total deferred income tax assets$57,452 $57,236 
Deferred income tax liabilities:
Operating lease right-of-use assets$(14,243)$(17,060)
Fixed assets(304)(1,248)
Intangibles(26,814)(26,207)
Total deferred income tax liabilities(41,361)(44,515)
Net deferred income tax asset
16,091 12,721 
Valuation allowance(21,692)(20,159)
Net deferred income tax liability
$(5,601)$(7,438)
The Company has capital loss carryforwards of $7.1 million in foreign jurisdictions at December 31, 2024 that are offset entirely by a valuation allowance.
At December 31, 2024, the Company has net operating losses in foreign jurisdictions of $81.1 million and $11.6 million in state jurisdictions that are fully offset by valuation allowance, and $5.4 million of net operating losses in foreign jurisdictions that are not offset by valuation allowance. Approximately $85.8 million of foreign net operating losses can be carried forward indefinitely. The remaining definite-lived foreign net operating losses, if not utilized, will expire beginning in 2026 through 2034. The state net operating losses begin to expire in 2026.
The provision for income taxes (before equity in losses) differs from the amounts computed by applying the applicable federal statutory rates as follows:
 Year Ended December 31,
 202420232022
Federal income taxes at the statutory rate21.0 %21.0 %21.0 %
Increases (decreases):
State and local income taxes, net of Federal income tax benefit(3.5)5.7 13.9 
Foreign rate differences14.2 (19.7)6.9 
Foreign withholding tax(1.7)5.0 6.1 
Non-deductible expenses(5.7)3.4 2.9 
Non-deductible compensation
(6.7)4.5 4.2 
Loss on equity securities
(43.6)— — 
Uncertain tax positions7.7 (0.9)1.2 
Research and development credit3.0 (2.5)(5.4)
Federal return to provision1.0 0.7 (3.4)
 Equity-based compensation(4.7)5.0 0.1 
Valuation Allowance(15.2)37.2 15.9 
Provision for income taxes(34.2)%59.4 %63.4 %
The estimated values of the Company’s gross uncertain tax positions at December 31, 2024, 2023 and 2022 consist of the following:
Year Ended December 31,
202420232022
(in thousands)
Balance at January 1$(990)$(1,130)$(1,071)
Additions based on tax positions related to the current year(27)(27)(79)
Reductions for tax position of prior years560 167 20 
Balance at December 31$(457)$(990)$(1,130)
The Company had approximately $0.2 million and $0.4 million, net of federal and state tax benefit, accrued at December 31, 2024 and 2023, respectively, for the payment of interest and penalties. The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes.
If the Company’s tax positions are ultimately sustained, the Company’s liability, including interest, would be reduced by $0.7 million, all of which would impact the Company’s tax provision. On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly. The Company believes that it is reasonably possible that an immaterial amount of its tax positions will be resolved within the next 12 months.
The Company is no longer subject to U.S. Federal income tax examinations for the years prior to 2021. The Company has identified the following jurisdictions as “major” tax jurisdictions: U.S. Federal, California, Massachusetts, New Jersey, New York, and the United Kingdom. At December 31, 2024, the periods subject to examination by the Company’s major state jurisdictions are generally for the years ended 2020 through 2023. In certain jurisdictions, Filament, an acquired entity, may have additional periods subject to examination. As of December 31, 2024, there are no material assessments in any given year.