Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Components of Income (Loss) Before Income Tax

Components of the Company’s income (loss) before income taxes are as follows (in thousands):

	Year Ended December 31,
	2022			2021			2020
Income (loss) before income taxes:
Canada	$	(4,946	)	$	(1,371	)	$	(2,278	)
U.S.		28,365			19,168			16,875
Other		63,740			38,375			33,806
Total	$	87,159		$	56,172		$	48,403

Components of Income Tax Provision (Benefit)

Components of the Company’s income tax provision (benefit) are as follows (in thousands):

	Year Ended December 31,
	2022			2021			2020
Current
Canada	$	65		$	95		$	82
U.S.		17,205			205			1,324
Other		14,492			9,486			6,589
		31,762			9,786			7,995
Deferred
Canada		—			493			(493	)
U.S.		(15,370	)		(2,133	)		(1,256	)
Other		(3,284	)		(2,305	)		(2,364	)
		(18,654	)		(3,945	)		(4,113	)
Total	$	13,108		$	5,841		$	3,882

Reconciliation of Statutory Canadian Tax rate to Effective Tax Rate

The reconciliation of the statutory Canadian tax rate to the effective tax rate related to income before income taxes is as follows (in thousands, except percentage data):

	Year Ended December 31,
	2022			2021			2020
Statutory Canadian tax rate		29.00	%		29.00	%		29.00	%
Expected income tax provision at Canadian statutory tax rate	$	25,276		$	16,291		$	14,037
International tax rate differences		(6,289	)		(3,621	)		(3,483	)
U.S. state income taxes, net		3			(249	)		(108	)
Withholding and other taxes		789			429			485
Permanent differences and other		(39	)		921			259
Disallowed compensation		2,138			1,111			685
Foreign-derived intangible income		(4,467	)		(1,211	)		(1,063	)
Tax credits		(2,256	)		(1,408	)		(2,016	)
Statutory tax rate changes		—			489			429
Uncertain tax positions		(168	)		(472	)		(176	)
Change in valuation allowance		2,048			918			(727	)
Acquisition contingent consideration adjustments		(698	)		87			(1,513	)
Transaction costs		179			248			(23	)
Provision to return differences		(19	)		33			750
Windfall benefit from share-based compensation		(254	)		(5,131	)		(2,322	)
U.K. patent box		(3,135	)		(2,594	)		(1,332	)
Reported income tax provision	$	13,108		$	5,841		$	3,882
Effective tax rate		15.0	%		10.4	%		8.0	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows (in thousands):

	December 31,
	2022			2021
Deferred tax assets:
Losses	$	9,954		$	9,358
Operating lease liabilities		11,117			12,200
Compensation related deductions		9,010			6,795
Inventories		9,368			6,594
Tax credits		2,624			2,786
R&D Capitalization		13,623			—
Warranty		836			700
Other		284			403
Total deferred tax assets		56,816			38,836
Valuation allowance on deferred tax assets		(14,568	)		(12,608	)
Net deferred tax assets	$	42,248		$	26,228
Deferred tax liabilities:
Depreciation	$	(4,049	)	$	(2,585	)
Amortization		(26,746	)		(32,117	)
Operating lease right-of-use assets		(10,477	)		(11,667	)
Deferred revenue		(3,057	)	$	(1,391	)
Total deferred tax liabilities	$	(44,329	)	$	(47,760	)
Net deferred income tax assets (liabilities)	$	(2,081	)	$	(21,532	)

Reconciliation of Total Amounts of Unrecognized Tax Benefits

The reconciliation of the total amounts of unrecognized tax benefits is as follows (in thousands):

Balance at December 31, 2019	$	4,929
Additions based on tax positions related to the current year		476
Additions for tax positions of prior years		356
Reductions to tax positions of prior years		(5	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(498	)
Settlements with tax authorities		—
Balance at December 31, 2020		5,258
Additions based on tax positions related to the current year		1,162
Additions for tax positions of prior years		9
Reductions to tax positions of prior years		(41	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(1,591	)
Settlements with tax authorities		—
Balance at December 31, 2021		4,797
Additions based on tax positions related to the current year		553
Additions for tax positions of prior years		34
Reductions to tax positions of prior years		(563	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(572	)
Settlements with tax authorities		—
Balance at December 31, 2022	$	4,249

Income Tax Returns to be Reviewed

The Company’s income tax returns may be reviewed by tax authorities in the following countries for the following periods under the appropriate statute of limitations:

United States	2019 - Present
Canada	2017 - Present
United Kingdom	2020 - Present
Germany	2017 - Present
The Netherlands	2018 - Present
China	2012 - Present
Japan	2017 - Present