Note 14 - Income Taxes

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. Income Taxes

The provision for income taxes was

$3.0

million and

$4.5

million for the

three

- and

six

-month periods ended

June 30, 2019,

based on effective tax rates of

24.2%

and

24.3%,

respectively. The provision for income taxes was

$1.4

million and

$0.4

million for the

three

- and

six

-month periods ended

June 30, 2018,

based on effective tax rates of

12.5%

and

10.4%,

respectively. The net increase in the effective tax rate for the

three

- and

six

- month periods ended

June 30, 2019,

as compared to the same periods in

2018,

was primarily due to the limitation on the deductibility of executive compensation for accelerated stock vesting upon the retirement of the Company’s former Chief Executive Officer on

March 9, 2018

in addition to the windfall tax benefit the Company realized in

June 2018

related to exercises of employee equity awards. The Company realized an immaterial shortfall for the

three

- and

six

-month periods ended

June 30, 2019.

The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in Italy.  The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate.

In connection with the preparation of the financial statements, the Company assesses whether it was more likely than

not

that it would be able to utilize, in future periods, the net deferred tax assets associated with its net operating loss carry-forward. The Company has concluded that the positive evidence outweighs the negative evidence and, thus, the deferred tax assets

not

otherwise subject to a valuation allowance are realizable on a “more likely than

not”

basis. As such, the Company did

not

record a valuation allowance as of

June 30, 2019

or

December 31, 2018.