Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Components of Income (Loss) from Continuing Operations

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

	Year Ended December 31,
	2017			2016			2015
Income (loss) from continuing operations before income taxes:
Canada	$	(2,036	)	$	(1,872	)	$	(1,674	)
U.S.		37,327			20,422			23,298
Other		40,843			13,972			24,398
Total	$	76,134		$	32,522		$	46,022

Components of Income Tax Provision (Benefit)

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

	Year Ended December 31,
	2017			2016			2015
Current
Canada	$	146		$	43		$	96
U.S.		9,434			9,678			8,136
Other		6,807			2,564			3,854
		16,387			12,285			12,086
Deferred
Canada		—			—			—
U.S.		2,396			(2,378	)		(3,239	)
Other		(4,956	)		612			1,547
		(2,560	)		(1,766	)		(1,692	)
Total	$	13,827		$	10,519		$	10,394

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 from continuing operations is as follows (in thousands, except percentage data):

	Year Ended December 31,
	2017			2016			2015
Statutory Canadian tax rate		29.00	%		28.50	%		27.00	%
Expected income tax provision at Canadian statutory tax rate	$	22,079		$	9,269		$	12,426
International tax rate differences		(2,038	)		891			304
State income taxes, net		674			503			453
Withholding and other taxes		484			441			731
Permanent differences		274			179			1,000
Section 199 deduction		(1,148	)		(1,063	)		(1,188	)
Tax credits		(984	)		(1,095	)		(990	)
Statutory tax rate changes		2,823			(856	)		95
Uncertain tax positions		(1,607	)		(103	)		121
Change in valuation allowance		(354	)		1,202			(612	)
Acquisition contingent consideration adjustments		149			762			—
Transaction costs		1,011			649			270
Provision to return differences		225			(93	)		(617	)
IRS audit		—			—			(748	)
Gain on Laser Quantum acquisition		(6,586	)		—			—
UK patent box		(1,646	)		—			—
JK Lasers divestiture		—			—			(1,432	)
Other		471			(167	)		581
Reported income tax provision	$	13,827		$	10,519		$	10,394
Effective tax rate		18.2	%		32.3	%		22.6	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands):

	December 31,
	2017			2016
Deferred tax assets:
Losses	$	9,407		$	9,557
Compensation related deductions		3,687			4,437
Tax credits		2,594			2,318
Unrealized currency gains/losses		183			—
Restructuring related liabilities		172			471
Inventory		3,400			5,869
Amortization		—			3,082
Warranty		768			1,049
Other		—			1,688
Total deferred tax assets		20,211			28,471
Valuation allowance on deferred tax assets		(12,811	)		(13,014	)
Net deferred tax assets	$	7,400		$	15,457
Deferred tax liabilities:
Equity-method investment	$	—		$	(1,370	)
Depreciation		(1,353	)		(749	)
Amortization		(23,496	)		(4,162	)
Unrealized currency gains/losses		—			(659	)
Other		(1,171	)		(1,218	)
Total deferred tax liabilities	$	(26,020	)	$	(8,158	)
Net deferred income tax assets (liabilities)	$	(18,620	)	$	7,299

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, 2014	$	6,274
Additions based on tax positions related to the current year		752
Additions for tax positions of prior years		78
Reductions to tax positions of prior years		(626	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(226	)
Settlements with tax authorities		(762	)
Balance at December 31, 2015		5,490
Additions based on tax positions related to the current year		561
Additions for tax positions of prior years		88
Reductions to tax positions of prior years		(45	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(842	)
Settlements with tax authorities		(290	)
Balance at December 31, 2016		4,962
Additions based on tax positions related to the current year		991
Additions for tax positions of prior years		496
Reductions to tax positions of prior years		(28	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(1,577	)
Settlements with tax authorities		(755	)
Balance at December 31, 2017	$	4,089

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	2014 - Present
Canada	2014 - Present
United Kingdom	2016 - Present
Germany	2013 - Present
The Netherlands	2012 - Present
China	2008 - Present
Japan	2013 - Present