Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

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,
	2018			2017			2016
Income (loss) before income taxes:
Canada	$	(796	)	$	(2,036	)	$	(1,872	)
U.S.		39,356			37,327			20,422
Other		22,742			40,843			13,972
Total	$	61,302		$	76,134		$	32,522

Components of Income Tax Provision (Benefit)

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

	Year Ended December 31,
	2018			2017			2016
Current
Canada	$	75		$	146		$	43
U.S.		8,095			9,434			9,678
Other		8,113			6,807			2,564
		16,283			16,387			12,285
Deferred
Canada		—			—			—
U.S.		(2,272	)		2,396			(2,378	)
Other		(3,804	)		(4,956	)		612
		(6,076	)		(2,560	)		(1,766	)
Total	$	10,207		$	13,827		$	10,519

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,
	2018			2017			2016
Statutory Canadian tax rate		29.00	%		29.00	%		28.50	%
Expected income tax provision at Canadian statutory tax rate	$	17,778		$	22,079		$	9,269
International tax rate differences		(4,474	)		(2,038	)		891
U.S. state income taxes, net		831			674			503
Withholding and other taxes		550			484			441
Permanent differences and other		1,015			1,582			84
Section 199 deduction		—			(1,148	)		(1,063	)
Foreign-derived intangible income		(1,628	)		—			—
Tax credits		(1,250	)		(984	)		(1,095	)
Statutory tax rate changes		(285	)		2,823			(856	)
Uncertain tax positions		190			(1,607	)		(103	)
Change in valuation allowance		(262	)		(354	)		1,202
Acquisition contingent consideration adjustments		833			149			762
Transaction costs		172			1,011			649
Provision to return differences		(385	)		225			(93	)
Benefit from share-based compensation		(931	)		(837	)		(72	)
Gain on Laser Quantum acquisition		—			(6,586	)		—
UK patent box		(1,947	)		(1,646	)		—
Reported income tax provision	$	10,207		$	13,827		$	10,519
Effective tax rate		16.7	%		18.2	%		32.3	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands):

	December 31,
	2018			2017
Deferred tax assets:
Losses	$	9,385		$	9,407
Compensation related deductions		4,780			3,687
Inventories		4,170			3,400
Tax credits		2,785			2,594
Unrealized currency gains/losses		—			183
Restructuring related liabilities		202			172
Warranty		35			768
Other		885			—
Total deferred tax assets		22,242			20,211
Valuation allowance on deferred tax assets		(12,884	)		(12,811	)
Net deferred tax assets	$	9,358		$	7,400
Deferred tax liabilities:
Depreciation	$	(1,867	)	$	(1,353	)
Amortization		(20,258	)		(23,496	)
Unrealized currency gains/losses		(373	)		—
Other		—			(1,171	)
Total deferred tax liabilities	$	(22,498	)	$	(26,020	)
Net deferred income tax assets (liabilities)	$	(13,140	)	$	(18,620	)

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, 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
Additions based on tax positions related to the current year		394
Additions for tax positions of prior years		655
Reductions to tax positions of prior years		(69	)
Reductions to tax positions resulting from a lapse of the applicable statute of limitations		(239	)
Settlements with tax authorities		(105	)
Balance at December 31, 2018	$	4,725

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	2015 - Present
Canada	2015 - Present
United Kingdom	2017 - Present
Germany	2014 - Present
The Netherlands	2012 - Present
China	2009 - Present
Japan	2013 - Present