XML 50 R21.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Note 13 – Income Taxes A summary of the components of the expense (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows:
(In thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (518 | ) |  | $ | (8,001 | ) |  | $ | 466 |
State |  |  | (1,065 | ) |  |  | (476 | ) |  |  | (150 | )
International |  |  | (282 | ) |  |  | 11,705 |  |  |  | 6,458 |
Total Current |  |  | (1,865 | ) |  |  | 3,228 |  |  |  | 6,774 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 24,801 |  |  |  | (14,448 | ) |  |  | 8,024 |
State |  |  | 5,815 |  |  |  | (3,390 | ) |  |  | 1,882 |
International |  |  | (546 | ) |  |  | 581 |  |  |  | 4,167 |
Total Deferred |  |  | 30,070 |  |  |  | (17,257 | ) |  |  | 14,073 |
Total Income Tax Expense (Benefit) |  | $ | 28,205 |  |  | $ | (14,029 | ) |  | $ | 20,847 |
Our effective income tax rate differs from the federal statutory rate due to the following:
|  | 2019 |  |  | 2018 |  |  | 2017 |
Tax provision computed at the federal statutory rate |  |  | 21.00 | % |  |  | 21.00 | % |  |  | 35.00 | %
State income tax provision, net of federal benefit |  |  | 6.97 |  |  |  | 14.53 |  |  |  | 2.17 |
Federal research credits |  |  | 15.53 |  |  |  | 14.23 |  |  |  | (11.88 | )
Foreign taxes |  |  | 2.83 |  |  |  | (11.45 | ) |  |  | (2.27 | )
Tax-exempt income |  |  | 0.49 |  |  |  | 0.45 |  |  |  | (0.75 | )
State tax incentives |  |  | 3.85 |  |  |  | 3.15 |  |  |  | (2.71 | )
Change in valuation allowance |  |  | (172.82 | ) |  |  | — |  |  |  | — |
Foreign tax credits |  |  | 16.69 |  |  |  | — |  |  |  | — |
Stock-based compensation |  |  | (6.01 | ) |  |  | (2.87 | ) |  |  | 1.43 |
Domestic production activity deduction |  |  | — |  |  |  | — |  |  |  | (1.13 | )
Bargain purchase |  |  | — |  |  |  | 8.82 |  |  |  | — |
Impact of U.S. tax reform |  |  | — |  |  |  | 12.00 |  |  |  | 26.70 |
Global intangible low-taxed income ("GILTI") |  |  | (1.87 | ) |  |  | (17.48 | ) |  |  | — |
Other, net |  |  | (0.49 | ) |  |  | (0.34 | ) |  |  | 0.09 |
Effective Tax Rate |  |  | (113.83 | )% |  |  | 42.04 | % |  |  | 46.65 | %
Income (loss) before expense (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows:
(In thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
U.S. entities |  | $ | (29,829 | ) |  | $ | (74,131 | ) |  | $ | 26,552 |
International entities |  |  | 5,052 |  |  |  | 40,760 |  |  |  | 18,135 |
Total |  | $ | (24,777 | ) |  | $ | (33,371 | ) |  | $ | 44,687 |
Income (loss) before expense (benefit) for income taxes for international entities reflects income (loss) based on statutory transfer pricing agreements. This amount does not correlate to consolidated international revenue, many of which occur from our U.S. entity. Deferred income taxes on the Consolidated Balance Sheets result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The principal components of our current and non-current deferred taxes were as follows:
(In thousands) |  | 2019 |  |  | 2018 |
Deferred tax assets |  |  |  |  |  |  |  |
Inventory |  | $ | 7,144 |  |  | $ | 6,609 |
Accrued expenses |  |  | 2,330 |  |  |  | 2,850 |
Investments |  |  | — |  |  |  | 1,122 |
Deferred compensation |  |  | 5,660 |  |  |  | 4,779 |
Stock-based compensation |  |  | 2,451 |  |  |  | 3,069 |
Uncertain tax positions related to state taxes and related interest |  |  | 241 |  |  |  | 326 |
Pensions |  |  | 7,074 |  |  |  | 5,538 |
Foreign losses |  |  | 2,925 |  |  |  | 3,097 |
State losses and credit carry-forwards |  |  | 3,995 |  |  |  | 8,164 |
Federal loss and research carry-forwards |  |  | 12,171 |  |  |  | 17,495 |
Lease liabilities |  |  | 2,496 |  |  |  | — |
Capitalized research and development expenditures |  |  | 22,230 |  |  |  | — |
Valuation allowance |  |  | (48,616 | ) |  |  | (5,816 | )
Total Deferred Tax Assets |  |  | 20,101 |  |  |  | 47,233 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (2,815 | ) |  |  | (3,515 | )
Intellectual property |  |  | (5,337 | ) |  |  | (6,531 | )
Right of use lease assets |  |  | (2,496 | ) |  |  | — |
Investments |  |  | (1,892 | ) |  |  | — |
Total Deferred Tax Liabilities |  |  | (12,540 | ) |  |  | (10,046 | )
Net Deferred Tax Assets |  | $ | 7,561 |  |  | $ | 37,187 |
In December 2017, the Tax Cuts and Jobs Act (“the Act”) was signed into law. As a result of the Act, we recognized an estimated expense of $11.9 million in the fourth quarter of 2017, of which $9.2 million related to the write-down of deferred tax assets and $2.7 million related to tax on unrepatriated foreign earnings. We calculated our best estimate of the impact of the Act in our 2017 year-end income tax provision in accordance with Staff Accounting Bulletin No. 118, which was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed to finalize the accounting for certain income tax effects of the Act. Additional work to complete a more detailed analysis of historical foreign earnings, as well as the full impact relating to the write-down of deferred tax assets, was completed in the third quarter of 2018 and resulted in a tax benefit of $4.0 million for the year ended December 31, 2018. As of December 31, 2019 and 2018, non-current deferred taxes related to our investments and our defined benefit pension plan reflect deferred taxes on the net unrealized gains and losses on available-for-sale investments and deferred taxes on unrealized losses in our pension plan. The net change in non-current deferred taxes associated with these items, which resulted in a deferred tax benefit of $0.4 million and $2.8 million in 2019 and 2018, respectively, was recorded as an adjustment to other comprehensive income (loss), presented in the Consolidated Statements of Comprehensive Income (Loss). The Company continually reviews the adequacy of our valuation allowance and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be realized in accordance with ASC 740, Income Taxes. Due to our recent decrease in revenue and profitability for 2019, and all other positive and negative objective evidence considered as part of our analysis, our ability to consider other subjective evidence such as projections for future growth is limited when evaluating whether our deferred tax assets will be realized. As such, the Company was no longer able to conclude that it was more likely than not that our domestic deferred tax assets would be realized and a valuation allowance against our domestic deferred tax assets was established in the third quarter of 2019. The amount of the deferred tax assets considered realizable may be adjusted in future periods in the event that sufficient evidence is present to support a conclusion that it is more likely than not that all or a portion of our domestic deferred tax assets will be realized. As of December 31, 2019, the Company had gross deferred tax assets totaling $56.2 million offset by a valuation allowance totaling $48.6 million. Of the valuation allowance, $42.8 million was established in the current year primarily related to our domestic deferred tax assets. The remaining $5.8 million established in prior periods related to state research and development credit carryforwards and foreign net operating loss and research and development credit carryforwards where we lack sufficient activity to realize those deferred tax assets. The remaining $7.6 million in deferred tax assets that were not offset by a valuation allowance are located in various foreign jurisdictions where the Company believes it is more likely than not we will realize these deferred tax assets. Supplemental balance sheet information related to deferred tax assets is as follows:
|  | December 31, 2019 |
(In thousands) |  | Deferred Tax Assets |  |  | Valuation Allowance |  |  | Deferred Tax Assets, net |
Domestic |  | $ | 46,266 |  |  | $ | (46,266 | ) |  | $ | — |
International |  |  | 9,911 |  |  |  | (2,350 | ) |  |  | 7,561 |
Total |  | $ | 56,177 |  |  | $ | (48,616 | ) |  | $ | 7,561 |
As of December 31, 2019 and 2018, the deferred tax assets for foreign and domestic loss carry-forwards, research and development tax credits, unamortized research and development costs and state credit carry-forwards totaled $41.3 million and $28.8 million, respectively. As of December 31, 2019, $19.1 million of these deferred tax assets will expire at various times between 2020 and 2039. The remaining deferred tax assets will either amortize through 2029 or carryforward indefinitely. As of December 31, 2019 and 2018, respectively, our cash and cash equivalents were $73.8 million and $105.5 million and short-term investments were $33.2 million and $3.2 million, which provided available short-term liquidity of $107.0 million and $108.7 million. Of these amounts, our foreign subsidiaries held cash of $52.3 million and $87.1 million, respectively, representing approximately 48.9% and 80.1% of available short-term liquidity, which is used to fund on-going liquidity needs of these subsidiaries. We intend to permanently reinvest these funds outside the U.S. except to the extent any of these funds can be repatriated without withholding tax and our current business plans do not indicate a need to repatriate to fund domestic operations. However, if all of these funds were repatriated to the U.S. or used for U.S. operations, certain amounts could be subject to tax. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practical to determine the amount of funds subject to unrecognized deferred tax liability. During 2019, 2018 and 2017, no income tax benefit or expense was recorded for stock options exercised as an adjustment to equity. The change in the unrecognized income tax benefits for the years ended December 31, 2019, 2018 and 2017 is reconciled below:
(In thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
Balance at beginning of period |  | $ | 1,868 |  |  | $ | 2,366 |  |  | $ | 2,226 |
Increases for tax position related to: |  |  |  |  |  |  |  |  |  |  |  |
Prior years |  |  | — |  |  |  | 3 |  |  |  | 465 |
Current year |  |  | 161 |  |  |  | 254 |  |  |  | 285 |
Decreases for tax positions related to: |  |  |  |  |  |  |  |  |  |  |  |
Prior years |  |  | (71 | ) |  |  | — |  |  |  | (14 | )
Expiration of applicable statute of limitations |  |  | (471 | ) |  |  | (755 | ) |  |  | (596 | )
Balance at end of period |  | $ | 1,487 |  |  | $ | 1,868 |  |  | $ | 2,366 |
As of December 31, 2019, 2018 and 2017, our total liability for unrecognized tax benefits was $1.5 million, $1.9 million and $2.4 million, respectively, of which $1.4 million, $1.7 million and $2.2 million, respectively, would reduce our effective tax rate if we were successful in upholding all of the uncertain positions and recognized the amounts recorded. We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. As of December 31, 2019, 2018 and 2017, the balances of accrued interest and penalties were $0.5 million, $0.7 million and $0.8 million, respectively. We do not anticipate a single tax position generating a significant increase or decrease in our liability for unrecognized tax benefits within 12 months of this reporting date. We file income tax returns in the U.S. for federal and various state jurisdictions and several foreign jurisdictions. We are not currently under audit by the Internal Revenue Service. Generally, we are not subject to changes in income taxes by any taxing jurisdiction for the years prior to 2016.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration