Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Income before Income Tax, Domestic and Foreign

The jurisdictional components of income before taxes consist of the following:


	December 31,
(in thousands)	2018		2017		2016
Income before income taxes:
Domestic	$	66,858	$	61,329	$	44,446
Foreign	27,673		21,038		17,743
	$	94,531	$	82,367	$	62,189

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) consist of the following:


	December 31,
(in thousands)	2018		2017		2016
Current:
Domestic	$	6,771	$	26,713	$	11,958
Foreign	7,391		6,222		5,491
State	4,831		3,789		2,075
	18,993		36,724		19,524
Deferred:
Domestic	2,542		1,711		1,580
Foreign	(390)		(155)		934
State	(100)		(228)		106
	2,052		1,328		2,620
Total income taxes	$	21,045	$	38,052	$	22,144

Schedule of Effective Income Tax Rate Reconciliation

The difference between income tax expense (benefit) for financial statement purposes and the amount of income tax expense computed by applying the domestic statutory income tax rate of 21% in 2018 and 35% in 2017 and 2016 to income before income taxes consists of the following:


	December 31,
(in thousands)	2018			2017			2016
Income tax expense at statutory rates	$	19,851		$	28,828		$	21,766
Increase (reduction) from:
Jurisdictional rate differences	719			(1,863)			(1,936)


Valuation allowance	(267)			308			1,731
Stock based compensation	(205)			(778)			275
U.S. state taxes	3,917			2,463			1,295
Domestic production deduction	—			(1,039)			(618)
R&D credit	(531)			(500)			(329)
GILTI	673			—			—
Other, net	219			397			(40)
Provision for income taxes before tax reform	$	24,376		$	27,816		$	22,144
Effective tax rate before effects of tax reform	26		%	34		%	36		%

Tax Reform:
Rate change of deferreds	1,200			(3,334)			—
Transition tax on deemed repatriation	(4,531)			13,104			—
Other	—			466			—
Impact of tax reform	$	(3,331)		$	10,236		$	—

Provision for income tax	$	21,045		$	38,052		$	22,144
Effective tax rate	22		%	46		%	36		%

Schedule of Deferred Tax Assets and Liabilities

The components of the Company’s deferred income tax assets and liabilities consist of the following:


	December 31,
(in thousands)	2018		2017
Deferred income tax assets:
Inventory basis difference	$	1,825	$	571
Accounts receivable reserve	251		310
Rental equipment and Property, plant and equipment	56		4
Stock based compensation	672		549
Pension liability	3,204		2,859
Employee benefit accrual	1,911		2,193

Product liability and warranty reserves	1,294		1,211


Foreign net operating loss	4,164		4,266
State net operating loss	148		286
Foreign tax credit	—		4,106
Other	(156)		216

Total deferred income tax assets	$	13,369	$	16,571
Less: Valuation allowance	(3,696)		(8,519)

Net deferred income tax assets	$	9,673	$	8,052

Deferred income tax liabilities:

Rental equipment and Property, plant and equipment	(9,928)		(7,477)
Intangible assets	(8,944)		(7,064)


Expenses not currently deductible for book purposes	(749)		(887)

Total deferred income tax liabilities	$	(19,621)	$	(15,428)

Net deferred income taxes	$	(9,948)	$	(7,376)

Schedule of Unrecognized Tax Benefits Roll Forward

We do not expect our unrecognized tax benefits disclosed above to change significantly over the next 12 months.


Unrecognized Tax Benefits
	December 31,
	2018		2017
Balance as of beginning of year	$	234,000	$	235,000
Additions for tax positions related to the current year	63,000		62,000
Additions for tax positions related to prior years	—		—
Reduction due to lapse of statute of limitations	(61,000)		(63,000)
Balance as of end of year	$	236,000	$	234,000