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Income taxes (Tables)
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Schedule of Income from Continuing Operations Before Provision for Income Taxes

Income from continuing operations before provision for income taxes consisted of:

 

 

 

Year Ended

December 31,

 

(U.S. Dollars in thousands)

 

2014

 

 

2013

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

17,532

 

 

$

(3,546

)

 

$

56,210

 

Non-U.S.

 

 

(5,076

)

 

 

(7,057

)

 

 

12,855

 

Total income (loss) before taxes

 

$

12,456

 

 

$

(10,603

)

 

$

69,065

 

 

Schedule of Provision for (Benefit from) Income Taxes on Continuing Operations

The provision for (benefit from) income taxes on continuing operations in the accompanying consolidated statements of operations consists of the following:

 

 

 

Year Ended

December 31,

 

(U.S. Dollars in thousands)

 

2014

 

 

2013

 

 

2012

 

U.S.

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

5,067

 

 

$

2,465

 

 

$

16,982

 

Deferred

 

 

2,825

 

 

 

4,013

 

 

 

2,675

 

Total U.S

 

 

7,892

 

 

 

6,478

 

 

 

19,657

 

Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

18,186

 

 

 

2,308

 

 

 

3,191

 

Deferred

 

 

(9,878

)

 

 

(1,184

)

 

 

1,096

 

 

 

 

8,308

 

 

 

1,124

 

 

 

4,287

 

Total tax expense

 

$

16,200

 

 

$

7,602

 

 

$

23,944

 

 

Schedule of Tax Effects of Significant Temporary Differences Comprising Deferred Tax Assets and Liabilities

Deferred income taxes are provided primarily for net operating loss carryforwards and for temporary differences resulting from items that are recognized in different years for financial statement and income tax reporting purposes. The deferred tax assets and liabilities are as follows: 

 

(U.S. Dollars in thousands)

 

2014

 

 

2013

 

Intangible assets and goodwill

 

$

4,067

 

 

$

4,798

 

Inventories and related reserves

 

 

19,525

 

 

 

20,769

 

Deferred revenue and cost of goods sold

 

 

10,826

 

 

 

11,577

 

Other accruals and reserves

 

 

5,371

 

 

 

4,778

 

Accrued compensation

 

 

5,004

 

 

 

3,942

 

Allowance for doubtful accounts

 

 

2,094

 

 

 

2,040

 

Accrued interest

 

 

17,555

 

 

 

18,063

 

Net operating loss carryforwards

 

 

34,514

 

 

 

34,979

 

Other, net

 

 

1,202

 

 

 

893

 

 

 

 

100,158

 

 

 

101,839

 

Valuation allowance

 

 

(37,438

)

 

 

(31,772

)

Deferred tax asset

 

$

62,720

 

 

$

70,067

 

Withholding taxes

 

 

(229

)

 

 

(13,026

)

Property, plant and equipment

 

 

(6,766

)

 

 

(7,674

)

Deferred tax liability

 

 

(6,995

)

 

 

(20,700

)

Net deferred tax assets

 

$

55,725

 

 

$

49,367

 

 

 

 

 

 

 

 

 

 

Reported as:

 

 

 

 

 

 

 

 

Current deferred tax assets

 

 

37,413

 

 

 

39,999

 

Non-current deferred tax assets

 

 

18,541

 

 

 

22,394

 

Current deferred tax liability

 

 

 

 

 

 

Non-current deferred tax liability

 

 

(229

)

 

 

(13,026

)

Net deferred tax assets

 

$

55,725

 

 

$

49,367

 

 

Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations

The rate reconciliation for continuing operations presented below is based on the U.S. federal income tax rate, rather than the parent company’s country of domicile tax rate. Management believes, given the large proportion of taxable income earned in the United States, such disclosure is more meaningful.

 

(U.S. Dollars in thousands, except percentages)

 

2014

 

 

2013

 

 

2012

 

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

Statutory U.S. federal income tax rate

 

$

4,360

 

 

 

35.0

%

 

$

(3,711

)

 

 

35.0

%

 

$

24,179

 

 

 

35.0

%

State taxes, net of federal benefit

 

 

1,439

 

 

 

11.6

 

 

 

2,039

 

 

 

(19.2

)

 

 

2,536

 

 

 

3.7

 

Foreign rate differential, including withholding taxes

 

 

2,738

 

 

 

21.9

 

 

 

1,162

 

 

 

(11.0

)

 

 

(10

)

 

 

(0.0

)

Valuation allowance

 

 

8,672

 

 

 

69.6

 

 

 

3,913

 

 

 

(36.9

)

 

 

6,189

 

 

 

9.0

 

Italian subsidiary intangible asset

 

 

(2,546

)

 

 

(20.4

)

 

 

(2,288

)

 

 

21.6

 

 

 

(2,214

)

 

 

(3.2

)

Goodwill impairment

 

 

 

 

 

 

 

 

6,452

 

 

 

(60.9

)

 

 

 

 

 

 

Domestic manufacturing deduction

 

 

(377

)

 

 

(3.0

)

 

 

(233

)

 

 

2.2

 

 

 

(1,567

)

 

 

(2.3

)

Settlement of U.S. Government resolutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,260

)

 

 

(1.8

)

Italian audit settlement

 

 

1,048

 

 

 

8.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Other, net

 

 

866

 

 

 

7.0

 

 

 

268

 

 

 

(2.5

)

 

 

(3,909

)

 

 

(5.7

)

Income tax expense/effective rate

 

$

16,200

 

 

 

130.1

%

 

$

7,602

 

 

 

(71.7

)%

 

$

23,944

 

 

 

34.7

%

 

Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties)

A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2014 and December 31, 2013 follows:

 

(U.S. Dollars in thousands)

 

2014

 

 

2013

 

Balance as of January 1,

 

$

723

 

 

$

1,189

 

Additions for current year tax positions

 

 

14,794

 

 

 

183

 

Increases (decreases) for prior year tax positions

 

 

145

 

 

 

(12

)

Settlements of prior year tax positions

 

 

 

 

 

(560

)

Expiration of statutes

 

 

(65

)

 

 

(77

)

Balance as of December 31,

 

$

15,597

 

 

$

723