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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Earnings (loss) before income taxes consist of the following (in thousands):
202120202019
Domestic$(53,916)$(42,213)$(66,135)
Foreign14,798 17,774 22,110 
$(39,118)$(24,439)$(44,025)

The company has provided for income taxes (benefits) as follows (in thousands):
202120202019
Current:
Federal$85 $45 $152 
State(12)(180)(90)
Foreign6,596 6,168 10,070 
6,669 6,033 10,132 
Deferred:
Federal(662)(26)(148)
State— — — 
Foreign438 (2,166)(682)
(224)(2,192)(830)
Income Taxes$6,445 $3,841 $9,302 

Included in the 2019 federal deferred taxes is a benefit of $148,000 which resulted from the effect of indefinite intangibles and a related 2018 indefinite loss carryforward created, due to the U.S. tax reform legislation, resulting in a deferred tax benefit. The 2021 deferred federal benefit results from the goodwill impairment the company recorded, a reversal of deferred taxes related to the tax-deductible goodwill previously deducted by the company, resulting in the company recognizing a tax benefit of $662,000.

The company has historically considered the undistributed earnings of the company's foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes have been provided on such earnings (other than earnings from the company's Chinese subsidiary which was sold in March 2020 as part of the sale of the Dynamic business). The company reversed withholding taxes in the amount of $988,000 which were previously provided as a result of the company position that the earnings from the Chinese subsidiary were not permanently reinvested. The
sale of the business occurred without dividends paid from this subsidiary. The company continues to evaluate its plans for reinvestment or repatriation of unremitted foreign. As a result of U.S. tax reform legislation, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant incremental U.S. tax impact in the future. However, these distributions may be subject to non-U.S. withholding taxes if profits are distributed from certain jurisdictions. Undistributed profits of non-U.S. subsidiaries of approximately $28,683,000 are considered indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested profits is not practicable.

The company regularly reviews its cash positions and its determination of permanent reinvestment of foreign earnings. If the company determines all or a portion of such foreign earnings are no longer indefinitely reinvested, the company may be subject to additional foreign withholding taxes and U.S. state income taxes.
A reconciliation to the effective income tax rate from the federal statutory rate is as follows:
202120202019
Statutory federal income tax rate (benefit)(21.0)%(21.0)%(21.0)%
State and local income taxes, net of federal income tax benefit— (0.6)(0.2)
Non-taxable disposition of subsidiaries
— (11.2)— 
Expiring foreign tax credits1.7 16.5 40.2 
Foreign taxes at other than the federal statutory rate3.9 8.8 5.1 
Federal and foreign valuation allowances20.4 (4.3)(20.4)
Withholding taxes0.1 0.1 0.1 
Unremitted earnings— (4.0)0.1 
Debt repurchase— 3.2 1.7 
Foreign branch activity4.0 19.3 12.4 
Uncertain tax positions0.6 2.9 1.4 
Nontaxable loan forgiveness(5.4)— — 
Foreign goodwill write-off
9.0 — — 
Other, net3.2 6.0 1.7 
Effective federal income tax rate16.5 %15.7 %21.1 %
 
At December 31, 2021, total deferred tax assets were $200,042,000, total deferred tax liabilities were $43,936,000 and the tax valuation allowances total was $176,230,000 for a net deferred income tax liability of $20,124,000 compared to total deferred tax assets of $179,985,000, total deferred tax liabilities of $37,873,000 and a tax valuation allowances total of $163,298,000 for a net deferred income tax liability of $21,186,000 at December 31, 2020. The company recorded a valuation allowance for its U.S. and certain foreign country net deferred tax assets where it is or is projected to be in a three-year cumulative loss.









Significant components of long-term deferred income tax assets and liabilities at December 31, 2021 and 2020 are as follows (in thousands):
20212020
Bad debt$387 $417 
Warranty1,426 1,280 
Other accrued expenses and reserves484 1,709 
Inventory3,624 3,797 
Goodwill and intangibles(19,910)(24,291)
Convertible debt5,193 2,623 
Fixed assets(24,026)(13,582)
Compensation and benefits4,271 6,349 
Loss and credit carryforwards127,397 118,290 
Product liability1,596 1,797 
State and local taxes34,794 32,835 
Valuation allowances(176,230)(163,298)
Lease liability19,649 9,258 
Other, net1,221 1,630 
Net Deferred Income Taxes$(20,124)$(21,186)

The company made net payments for income taxes of $6,877,000, $4,377,000, and $12,463,000 during the years ended December 31, 2021, 2020 and 2019, respectively.

The company has a federal domestic net operating loss carryforward of $406,252,000 of which $276,625,000 expires between 2034 and 2037 and the remaining are non-expiring; domestic interest carryforward of $94,845,000 which is non-expiring and federal tax credit carryforwards of $11,302,000 of which $222,000 expires in 2022 and $9,070,000 expire between 2023 and 2027, $2,010,000 expire beginning 2031.
At December 31, 2021, the company also had $660,471,000 of domestic state and local tax loss carryforwards, of which $128,493,000 expire between 2022 and 2025, $330,343,000 expire between 2026 and 2035 and $166,667,000 expire after 2036 and $34,968,000 have an unlimited carryforward.
At December 31, 2021, the company had foreign tax loss carryforwards of approximately $51,996,000 of which $22,839,000 expire between 2023 and 2028 the remaining are non-expiring all of which are offset by valuation allowances.

As of December 31, 2021 and 2020, the company had a liability for uncertain tax positions, excluding interest and penalties of $2,646,000 and $2,604,000, respectively. The total liabilities associated with unrecognized tax benefits that, if recognized, would impact the effective tax rates were $2,646,000 and $2,604,000 at December 31, 2021 and 2020, respectively.
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):
20212020
Balance at beginning of year$3,262 $2,872 
Additions to:
Positions taken during the current year238 782 
Positions taken during a prior year3 3 
Exchange rate impact— 52 
Deductions due to:
Exchange rate impact(66)— 
Positions taken during a prior year(76)(167)
Lapse of statute of limitations(212)(280)
Balance at end of year$3,149 $3,262 

The company recognizes interest and penalties associated with uncertain tax positions in income tax expense. During 2021, 2020 and 2019 the expense (benefit) for interest and penalties was $15,000, $(20,000) and $13,000, respectively. The company had approximately $525,000 and $510,000 of accrued interest and penalties as of December 31, 2021 and 2020, respectively.

The company and its subsidiaries file income tax returns in the U.S. and certain foreign jurisdictions. The company is subject to U.S. federal income tax examinations for calendar years 2018 to 2021 with limited exceptions, and is subject to various U.S. state income tax examinations for 2017 to 2021. With regards to foreign income tax jurisdictions, the company is generally subject to examinations for the periods 2015 to 2021.