XML 33 R17.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes In 2020, 2019 and 2018, pre-tax income (loss) was attributed to the following jurisdictions:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019 |  | 2018
Domestic operations | $ | (15,711) |  |  | $ | (28,929) |  |  | $ | (28,482) |
Foreign operations | 59,616 |  |  | 39,331 |  |  | 54,648 |
Total | $ | 43,905 |  |  | $ | 10,402 |  |  | $ | 26,166 |
The provision for income taxes charged to operations was as follows:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019 |  | 2018
Current tax expense: |  |  |  |  |
U.S. federal | $ | (193) |  |  | $ | (188) |  |  | $ | (1,074) |
State and local | (54) |  |  | 82 |  |  | 83 |
Foreign | 6,525 |  |  | 8,217 |  |  | 10,829 |
Total current | 6,278 |  |  | 8,111 |  |  | 9,838 |
Deferred tax (benefit) expense: |  |  |  |  |
U.S. federal | — |  |  | — |  |  | 3,961 |
State and local | — |  |  | — |  |  | 1,930 |
Foreign | (945) |  |  | (1,339) |  |  | (1,487) |
Total deferred | (945) |  |  | (1,339) |  |  | 4,404 |
Total provision for income taxes | $ | 5,333 |  |  | $ | 6,772 |  |  | $ | 14,242 |
Net deferred tax assets were comprised of the following:
| December 31,
(In thousands) | 2020 |  | 2019
Deferred tax assets: |  |  |
Accrued liabilities | $ | — |  |  | $ | 4,070 |
Amortization of intangible assets | 1,904 |  |  | 2,169 |
Capitalized inventory costs | 2,945 |  |  | 3,156 |
Depreciation | 2,530 |  |  | 426 |
Income tax credits | 15,558 |  |  | 11,800 |
Inventory reserves | 3,383 |  |  | 2,887 |
Net operating losses | 2,844 |  |  | 2,644 |
Operating lease obligations | 4,639 |  |  | 7,878 |
Stock-based compensation | 4,600 |  |  | 4,018 |
Other | 409 |  |  | 71 |
Total deferred tax assets | 38,812 |  |  | 39,119 |
Deferred tax liabilities: |  |  |
Accrued liabilities | (1,939) |  |  | — |
Allowance for credit losses | (710) |  |  | (270) |
Right of use assets | (4,577) |  |  | (7,480) |
Other | (29) |  |  | (3,866) |
Total deferred tax liabilities | (7,255) |  |  | (11,616) |
Net deferred tax assets before valuation allowance | 31,557 |  |  | 27,503 |
Less: Valuation allowance | (27,906) |  |  | (24,797) |
Net deferred tax assets | $ | 3,651 |  |  | $ | 2,706 |
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pre-tax income from operations as a result of the following:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019 |  | 2018
Tax provision at statutory U.S. rate | $ | 9,220 |  |  | $ | 2,185 |  |  | $ | 5,495 |
Increase (decrease) in tax provision resulting from: |  |  |  |  |
Federal research and development credits | (2,119) |  |  | (884) |  |  | (713) |
Foreign permanent benefit | (2,842) |  |  | (856) |  |  | (7,077) |
Foreign tax rate differential | (1,595) |  |  | (1,810) |  |  | (2,079) |
Foreign undistributed earnings, net of credits | 3,319 |  |  | 1,181 |  |  | 5,329 |
Non-deductible items | 1,637 |  |  | 1,236 |  |  | 1,197 |
Non-territorial income | (2,493) |  |  | (1,806) |  |  | (1,079) |
Provision to return | (343) |  |  | 584 |  |  | — |
State and local taxes, net | (1,932) |  |  | (1,903) |  |  | (1,792) |
Stock-based compensation | (266) |  |  | 262 |  |  | 213 |
Tax rate change | (1,527) |  |  | (412) |  |  | 466 |
Uncertain tax positions | (1,565) |  |  | (294) |  |  | (159) |
Valuation allowance | 3,109 |  |  | 7,524 |  |  | 8,057 |
Withholding tax | 2,320 |  |  | 1,082 |  |  | 5,454 |
Other | 410 |  |  | 683 |  |  | 930 |
Tax provision | $ | 5,333 |  |  | $ | 6,772 |  |  | $ | 14,242 |
At December 31, 2020, we had federal and state Research and Experimentation ("R&E") income tax credit carryforwards of $3.7 million and $11.3 million, respectively. The federal R&E income tax credits begin expiring in 2038. The state R&E income tax credits do not have an expiration date. At December 31, 2020, we had state and foreign net operating loss carryforwards of $37.3 million and $0.5 million, respectively. The state and foreign net operating loss carryforwards begin to expire in 2026 and 2023, respectively. At December 31, 2020, we assessed the realizability of our deferred tax assets by considering whether it is "more likely than not" some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We considered taxable income in carryback years, the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. Due to uncertainties surrounding the realization of some of our deferred tax assets, we established a valuation allowance against certain deferred tax assets. Our historic valuation allowance primarily relates to state R&E income tax credits generated during the prior years and current year. We had cumulative operating losses for the three years ended in 2020 for our U.S. federal and state operations and accordingly, have provided a full valuation allowance on our U.S. federal and state deferred tax assets of $13.3 million and $14.4 million, respectively, as we have determined that it is more likely than not that the tax benefits will not be realized in the future. Additionally, we recorded a valuation allowance of $0.3 million at December 31, 2020 related to certain deferred tax assets in our Argentina office due to sustained losses in that jurisdiction. If and when recognized, the tax benefits relating to any reversal of the valuation allowance will be recorded as a reduction of income tax expense. The valuation allowance increased by $3.1 million and $7.5 million during the years ended December 31, 2020 and 2019, respectively. Uncertain Tax Positions At December 31, 2020 and 2019, we had unrecognized tax benefits of approximately $3.1 million and $4.3 million, respectively, including interest and penalties. We have elected to classify interest and penalties as components of tax expense. Interest and penalties were immaterial for the year ended December 31, 2020. Interest and penalties were $0.2 million and $0.5 million for the years ended December 31, 2019 and 2018, respectively. Interest and penalties are included in the unrecognized tax benefits. Changes to our gross unrecognized tax benefits were as follows:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019 |  | 2018
Balance at beginning of period | $ | 4,094 |  |  | $ | 4,040 |  |  | $ | 5,081 |
Additions as a result of tax provisions taken during the current year | 274 |  |  | 473 |  |  | 702 |
Foreign currency translation | 20 |  |  | (100) |  |  | (51) |
Lapse in statute of limitations | (51) |  |  | (92) |  |  | (80) |
Settlements | — |  |  | (227) |  |  | (1,612) |
Other | (1,317) |  |  | — |  |  | — |
Balance at end of period | $ | 3,020 |  |  | $ | 4,094 |  |  | $ | 4,040 |
Approximately $3.0 million, $4.3 million and $4.3 million of the total amount of unrecognized tax benefits at December 31, 2020, 2019 and 2018, respectively, if not for the state R&E income tax credit valuation allowance, would affect the annual effective tax rate, if recognized. We are unaware of any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase within the next twelve months. We do not anticipate a decrease in unrecognized tax benefits within the next twelve months based on federal, state, and foreign statute expirations in various jurisdictions. We have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. As of December 31, 2020, the open statutes of limitations for our significant tax jurisdictions are as follows: federal for 2017 through 2019, state for 2016 through 2019, and foreign for 2014 through 2019. U.S. Tax Cuts and Jobs Act The Tax Act was enacted in the U.S. on December 22, 2017. The Tax Act reduced the U.S. federal corporate income tax rate to 21% from 35%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. For the year ended December 31, 2018, we completed our analysis and accounting for the Tax Act, recording tax expense for the one-time transition tax liability related to undistributed earnings of certain foreign subsidiaries that were not previously taxed, adjusting deferred tax assets and liabilities, and recognizing the effects of electing to account for GILTI as a period cost. Indefinite Reinvestment Assertion Beginning in 2018, the Tax Act generally provides a 100% federal deduction for dividends received from foreign subsidiaries. Nevertheless, companies must still apply the guidance of ASC Topic 740 to account for the tax consequences of outside basis differences and other tax impacts of their investments in foreign subsidiaries, including potential foreign withholding taxes on distributions. Historically, the undistributed earnings of our foreign subsidiaries were considered to be indefinitely reinvested and no provision for U.S. federal and state income taxes or foreign withholding taxes had been provided on U.S. earnings. This assertion was changed in 2018. For the years ended December 31, 2020, 2019 and 2018, we recorded a deferred tax liability of $2.1 million, $1.7 million and $1.2 million, respectively, relating to state tax and foreign tax withholding liabilities on future distributions. Coronavirus Aid, Relief and Economic Security Act On March 27, 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security ("CARES") Act was signed into law. The CARES Act provides economic stimulus and relief to address the impact of the COVID-19 pandemic. For the year ended December 31, 2020, our income tax expense was not significantly impacted by the CARES Act. We will continue to closely monitor the impact of the COVID-19 pandemic, as well as any effects from future legislation.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration