Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 18 — Income Taxes

The income tax provisions were calculated based upon the following components of earnings before income tax for the years ended December 31, 2023, 2022 and 2021:

	Year Ended December 31,
	2023			2022			2021
Earnings (loss) before income tax:
Domestic	$	(37,222	)	$	(34,211	)	$	(4,547	)
Foreign		92,176			72,593			118,399
Earnings before income tax	$	54,954		$	38,382		$	113,852

The components of the provision for income taxes for the years ended December 31, 2023, 2022 and 2021 are summarized as follows:

	Year Ended December 31,
	2023			2022			2021
Current income tax expense:
Federal	$	3,510		$	3,006		$	1,944
State and local		414			650			234
Foreign		23,759			17,607			18,390
Total current income tax expense		27,683			21,263			20,568
Deferred income tax (benefit) expense:
Federal		(7,495	)		(5,971	)		(4,400	)
State and local		444			(213	)		(91	)
Foreign		(6,021	)		(1,138	)		4,341
Total deferred (benefit) income tax expense		(13,072	)		(7,322	)		(150	)
Total income tax expense	$	14,611		$	13,941		$	20,418

As of December 31, 2023, deferred U.S. income taxes have not been provided on the undistributed earnings of the Company’s foreign subsidiaries since these earnings will not be taxable upon repatriation to the United States. These earnings will be primarily treated as previously taxed income from either the one-time transition tax or global intangible low-taxed income provision, or they will be offset with a 100% dividend received deduction. However, the Company continues to provide a deferred tax liability for foreign income and withholding tax that will be incurred with respect to the undistributed foreign earnings that are not indefinitely reinvested.

The deferred tax assets and deferred tax liabilities and related valuation allowance were comprised of the following as of December 31, 2023 and 2022:

	December 31,
	2023			2022
Deferred tax assets:
Net operating losses	$	44,053		$	43,296
Intangible assets		4,314			4,417
Research and development credits		7,127			7,835
Property and equipment		4,800			6,983
Valuation reserves and accrued liabilities		11,221			8,388
Capitalized Research and Development Costs		23,658			19,087
Stock compensation		3,227			3,051
Defined benefit obligation		1,691			1,265
Inventory		181			6,762
Other credits		8,946			10,296
Other		9,154			790
Total deferred tax asset		118,372			112,170
Valuation allowance		(35,888	)		(36,671	)
Deferred tax liabilities:
Unrealized foreign currency exchange gains		—			(2,413	)
Undistributed profits of subsidiary		(4,609	)		(5,981	)
Property and equipment		(12,627	)		(15,423	)
Other		(1,550	)		(3,056	)
Total deferred tax liability		(18,786	)		(26,873	)
Net deferred tax asset	$	63,698		$	48,626

Reconciliations between the statutory Federal income tax rate and the effective rate of income tax expense for the years ended December 31, 2023, 2022 and 2021 are as follows:

	Year Ended December 31,
	2023			2022			2021
Statutory Federal income tax rate		21.0	%		21.0	%		21.0	%
Increase (decrease) resulting from:
Change in valuation allowance		(3.1	)%		6.4	%		(1.2	)%
Effect of different tax rates of foreign jurisdictions		0.9	%		(4.9	)%		(5.2	)%
Tax credits & deductions related to R&D		(8.5	)%		(10.1	)%		(2.3	)%
Goodwill impairment		4.1	%		—			—
Non-deductible expenses		6.8	%		14.9	%		1.7	%
Non-deductible expenses related to acquisitions		—			7.0	%		—
Other foreign, state and local taxes		3.5	%		0.7	%		1.6	%
Tax impact of foreign income		3.6	%		4.2	%		3.6	%
Stock option compensation		—			(3.8	)%		(2.0	)%
Prior year adjustments		0.7	%		1.7	%		(0.7	)%
Other		(2.4	)%		(0.8	)%		1.4	%
Effective rate		26.6	%		36.3	%		17.9	%

The Company has Net Operating Loss (“NOL”) carryforwards as follows:

Jurisdiction	Amount as of December 31, 2023		Years of Expiration
U.S. state income tax	$	51,235	2024-2042
Foreign	$	296,334	Never

We have NOL carryforwards in various states associated with the benefits of the state dividends received reduction and foreign royalty exclusion. The state NOL carryforwards generally expire at various dates from 2024 to 2042. We have concluded that there is not sufficient evidence these NOL carryforwards will be utilized, and thus have not recognized the benefit of these NOL carryforwards.

At December 31, 2023, certain non-U.S. subsidiaries had NOL carryforwards totaling $296,334 which have no expiration date. The Company has a valuation allowance recorded against $16,413 of the total non-U.S. subsidiaries’ net operating loss carryforwards as of December 31, 2023.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. As of December 31, 2023, the Company was no longer subject to U.S. Federal examinations by tax authorities for tax years before 2020 and was no longer subject to foreign examinations by tax authorities for tax years before 2015.

The Company currently benefits from tax holidays in various non-U.S. jurisdictions with expiration dates from 2024 – 2025. For the years ended December 31, 2023, 2022 and 2021, income in foreign jurisdictions with such holidays was $8,185, $2,414, and $4,721, respectively.

At December 31, 2023, 2022 and 2021, the Company had total unrecognized tax benefits of $5,486, $6,185 and $5,665, respectively, all of which, if recognized, would affect the effective income tax rates. The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2023			2022			2021
Balance at beginning of year	$	6,185		$	5,665		$	4,967
Additions based on tax position related to current year		87			972			1,105
Additions based on tax position related to prior year		347			433			160
Reductions from settlements and statute of limitation expiration		(1,266	)		(610	)	$	(312	)
Effect of foreign currency translation		133			(275	)		(255	)
Balance at end of year	$	5,486		$	6,185		$	5,665

The Company classifies income tax-related penalties and net interest as income tax expense. In the years ended December 31, 2023, 2022 and 2021, income tax related interest and penalties were not material. It is reasonably possible that audit settlements, the conclusions of current examinations or the expiration of the statute of limitations in several jurisdictions could impact the Company’s unrecognized tax benefits.