Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure

The Company's income (loss) before income taxes and income tax expense (benefit), each by tax jurisdiction, consists of the following (dollars in thousands):

	Year ended December 31,
	2021		2020		2019
Income (loss) before income taxes:
Domestic	$	28,380	$	(134,630)	$	52,190
Foreign	40,730		31,920		26,070
Total income (loss) before income taxes	$	69,110	$	(102,710)	$	78,260
Current income tax expense:
Federal	$	940	$	200	$	3,530
State and local	530		810		1,280
Foreign	8,840		7,750		7,070
Total current income tax expense	10,310		8,760		11,880
Deferred income tax expense (benefit):
Federal	5,450		(16,900)		4,890
State and local	670		(4,430)		500
Foreign	(4,630)		(10,380)		(950)
Total deferred income tax expense (benefit)	1,490		(31,710)		4,440
Income tax expense (benefit)	$	11,800	$	(22,950)	$	16,320

The components of deferred taxes are as follows (dollars in thousands):

	December 31, 2021		December 31, 2020
Deferred tax assets:
Accounts receivable	$	950	$	260
Inventories	5,330		5,080
Accrued liabilities and other long-term liabilities	15,320		19,190
Operating lease liability	13,440		8,950
Tax loss and credit carryforwards	30,690		20,760
Other	340		340
Gross deferred tax asset	66,070		54,580
Valuation allowances	(19,960)		(10,180)
Net deferred tax asset	46,110		44,400
Deferred tax liabilities:
Property and equipment	(23,920)		(24,140)
Right of use asset	(13,130)		(8,930)
Goodwill and other intangible assets	(20,160)		(16,230)
Investment in foreign affiliates, including withholding tax	(420)		(370)
Gross deferred tax liability	(57,630)		(49,670)
Net deferred tax liability	$	(11,520)	$	(5,270)

The following is a reconciliation of income tax expense (benefit) computed at the U.S. federal statutory rate to income tax expense (benefit) allocated to income (loss) before income taxes (dollars in thousands):

	Year ended December 31,
	2021			2020			2019
U.S. federal statutory rate	21		%	21		%	21		%
Tax at U.S. federal statutory rate	$	14,550		$	(21,570)		$	16,440
State and local taxes, net of federal tax benefit	960			(2,850)			970
Differences in statutory foreign tax rates	(1,690)			(1,500)			(870)
Change in recognized tax benefits	(550)			(920)			(920)
Goodwill and other intangible assets impairment	—			13,430			—
Tax credits and incentives	(5,060)			(2,130)			(1,160)
Net change in valuation allowance	2,100			(6,390)			3,580
Nondeductible compensation	2,280			260			210
Other, net	$	(790)		$	(1,280)		$	(1,930)
Income tax expense (benefit)	$	11,800		$	(22,950)		$	16,320

During 2020, the Company undertook certain tax-planning actions with respect to intercompany debt restructuring within the group. These actions resulted in the recognition of an approximate $6.4 million deferred tax benefit related to an interest limitation carryforward.

The Company has recorded deferred tax assets on approximately $34.0 million of various state operating loss carryforwards and $57.6 million of various foreign operating loss carryforwards. The majority of the state tax loss carryforwards expire between 2026 and 2032 and the majority of the foreign losses have indefinite carryforward periods.

The Company has not made a provision for U.S. or additional foreign withholding taxes related to investments in foreign subsidiaries that are indefinitely reinvested since any excess of the amount for financial reporting over the tax basis in these investments is not significant as of December 31, 2021.

Unrecognized Tax Benefits

The Company had approximately $1.3 million and $1.6 million of unrecognized tax benefits ("UTBs") as of December 31, 2021 and 2020, respectively. If the UTBs were recognized, the impact to the Company's effective tax rate would be to reduce reported income tax expense for the years ended December 31, 2021 and 2020 by approximately $1.1 million and $1.4 million, respectively.

A reconciliation of the change in the UTBs for the years ended December 31, 2021 and 2020 is as follows (dollars in thousands):

	Unrecognized Tax Benefits
Balance at December 31, 2019	$	2,250
Tax positions related to current year:
Additions	150
Tax positions related to prior years:
Additions	—
Reductions	—
Settlements	—
Lapses in the statutes of limitations	(760)
Balance at December 31, 2020	$	1,640
Tax positions related to current year:
Additions	130
Tax positions related to prior years:
Additions	20
Reductions	—
Settlements	—
Lapses in the statutes of limitations	(540)
Balance at December 31, 2021	$	1,250

In addition to the UTBs summarized above, the Company has recorded approximately $0.8 million and $0.8 million in potential interest and penalties associated with uncertain tax positions as of December 31, 2021 and 2020, respectively.

The Company is subject to U.S. federal, state and local, and certain non-U.S. income tax examinations for tax years 2014 through 2021. In addition, there are currently several state and foreign income tax examinations in process. The Company does not believe that the results of these examinations will have a significant impact on the Company's tax position or its effective tax rate.

Management monitors changes in tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to UTBs and is not aware of, nor does it anticipate, any subsequent events that could have a significant impact on the Company's financial position during the next twelve months.