Income (loss) before income taxes, as shown in the accompanying Consolidated Statements of Operations, includes the following components for the years ended December 31, 2020, 2019, and 2018:


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	(9,506)	$	4,012	$	3,807
State	130		620		133
Foreign	1,852		1,925		3,675
Total current	(7,524)		6,557		7,615
Deferred:
Federal	(292)		(23,661)		(55)
State	(3,458)		(6,229)		(8)
Foreign	(567)		(502)		(1535)
Total deferred	(4,317)		(30,392)		(1,598)
Total income tax (benefit) expense	$	(11,841)	$	(23,835)	$	6,017


	Year Ended December 31,
	2020				2019				2018
	Amount		Percent		Amount		Percent		Amount		Percent
Statutory rate	$	2,936	21.0	%	$	5,069	21.0	%	$	(5,159)	21.0	%
Foreign tax rate differential	65		0.5		129		0.5		156		(0.6)
State income taxes, net of federal benefit	1,003		7.2		83		0.3		(700)		2.8

Non-deductible expenses	181		1.3		278		1.2		219		(0.9)
Tax benefits related to disposition of the Test and Inspection Services business	(16,282)		(116.4)		—		—		—		—


Global intangible low-taxed income, net of tax credits	621		4.4		145		0.6		171		(0.7)
Income tax credits	(1,357)		(9.7)		(126)		(0.5)		(633)		2.6
Nondeductible executive compensation	132		0.9		234		1.0		351		(1.4)
Tax on unremitted foreign earnings	174		1.2		216		0.9		149		(0.6)
Change in valuation allowance	731		5.2		(29,966)		(124.1)		11,400		(46.4)
Other	(45)		(0.3)		103		0.4		63		(0.3)
Total income tax (benefit) expense / Effective rate	$	(11,841)	(84.7)	%	$	(23,835)	(98.7)	%	$	6,017	(24.5)	%


	December 31,
	2020		2019
Deferred tax assets:
Goodwill and other intangibles	$	7,857	$	8,782
Accrued settlement	8,112		10,196
Deferred compensation	2,351		3,620
Contingent liabilities	649		786
Net operating loss / tax credit carryforwards	25,123		1,118
Pension and post-retirement liability	1,696		1,414
Inventories	1,529		1,118
Warranty reserve	297		294
Accounts receivable	214		254
Other	709		585
Total deferred tax assets	48,537		28,167
Less: valuation allowance	(1,483)		(752)
Net deferred tax assets	47,054		27,415
Deferred tax liabilities:
Goodwill and other intangibles	(4,116)		(4,454)
Depreciation	(7,140)		(5,638)
Inventory § 481(a) adjustment	(1,027)		(2,065)
Unremitted earnings of foreign subsidiaries	(200)		(390)
Other	(175)		(97)
Total deferred tax liabilities	(12,658)		(12,644)
Net deferred tax assets	$	34,396	$	14,771

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act contains several corporate income tax provisions, including providing for a five-year carryback of net operating losses (“NOL”) generated in tax years 2018 through 2020, removing the 80% taxable income limitation on utilization of those NOLs if carried back to prior tax years or utilized in tax years beginning before 2021, making remaining alternative minimum tax (“AMT”) credits immediately refundable, and temporarily relaxing the interest deductibility rules by raising the adjusted taxable income limitation from 30% to 50% for tax years 2019 and 2020. As of December 31, 2020, the Company has recorded an income tax receivable of $9,008 to reflect expected tax refunds of federal taxes paid within the five year NOL carryback period.

A valuation allowance is required to be established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company has considered all available evidence, both positive and negative, in assessing the need for a valuation allowance in each jurisdiction.

During 2019, the Company reversed $29,648 of its valuation allowance previously recorded against U.S. deferred tax assets based on the positive and negative evidence available at that time. As of December 31, 2020, the positive evidence considered in evaluating U.S. deferred tax assets included cumulative domestic financial income over the three-year period ended December 31, 2020, as well as the composition and reversal patterns of existing taxable and deductible temporary differences between financial reporting and tax. Based on its evaluation, the Company believed it was appropriate to rely on forecasted future taxable income to support its U.S. deferred tax assets. The amount of deferred tax assets considered realizable, however, could be adjusted if negative evidence outweighs additional subjective evidence such as the Company’s projections for growth.

As of December 31, 2020, the Company has a federal NOL carryforward of $78,300, which may be carried forward indefinitely. The Company also has federal research tax credit carryforwards in the amount of $1,244 that will expire at various times from 2036 through 2040. The Company believes that it is more likely than not that the tax benefits from the federal loss carryforwards and research tax credit carryforwards will be realized.

As of December 31, 2020, the Company has foreign tax credit carryforwards in the amount of $34 that will expire at various times from 2028 through 2029. The Company believes that it is more likely than not that the tax benefit from foreign tax credit carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $34 against deferred tax assets related to foreign tax credit carryforwards at December 31, 2020.

As of December 31, 2020 and 2019, the tax benefit of NOL carryforwards available for state income tax purposes was $8,320 and $901, respectively. Many state NOL carryforwards will expire in various years through 2040, while some may be carried forward indefinitely. The Company believes it is more likely than not that a portion of the tax benefit from state operating loss carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $657, net of federal benefit, against deferred tax assets related to state operating loss carryforwards as of December 31, 2020.

As of December 31, 2020, the Company has NOL carryforwards in certain foreign jurisdictions of $2,609, which may be carried forward indefinitely. The foreign jurisdictions have incurred cumulative financial losses over the three-year period ended December 31, 2020 and have projected future taxable losses. The Company believes it is more likely than not that the tax benefit from these loss carryforwards will not be realized. In recognition of this risk, it has provided a valuation allowance of $792, collectively, against deferred tax assets in foreign jurisdictions as of December 31, 2020.

The determination to record or not record a valuation allowance involves management judgment, based on the consideration of positive and negative evidence available at the time of the assessment. Management will continue to assess the realization of its deferred tax assets based upon future evidence, and may record adjustments to valuation allowances against deferred tax assets in future periods, as appropriate, that could materially impact net income.

Each quarter, management reviews operations and liquidity needs in each jurisdiction to assess the Company’s intent to reinvest foreign earnings outside of the United States. As of December 31, 2020, management determined that cash balances of its Canadian and United Kingdom subsidiaries exceeded projected capital needs by $4,000. Management does not intend for such amounts to be permanently reinvested outside of the United States and has therefore accrued foreign withholding taxes of $200 as of December 31, 2020. It is management’s intent and practice to indefinitely reinvest other undistributed earnings outside of the United States. Determination of the amount of any unrecognized deferred income tax liability associated with these undistributed earnings is not practicable because of the complexities of the hypothetical calculation.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $409 as of December 31, 2020. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. As of December 31, 2020 and 2019, the Company had accrued interest and penalties related to unrecognized tax benefits of $333 and $327, respectively. As of December 31, 2020, the Company did not expect any material increases or decreases to its unrecognized tax

benefits within the next 12 months. Ultimate realization of these tax benefits is dependent upon the occurrence of certain events, including the completion of audits by tax authorities and expiration of statutes of limitations.

The Company files income tax returns in the United States and in various state, local, and foreign jurisdictions. The Company is subject to federal income tax examinations for the 2017 period and thereafter. With respect to the state, local, and foreign filings, certain entities of the Company are subject to income tax examinations for the 2016 period and thereafter.