Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Deferred Tax Assets and Deferred Tax Liabilities

The deferred tax assets and deferred tax liabilities and related valuation allowance were comprised of the following:

	December 31,
	2018			2017
Deferred tax assets:
Net operating losses		7,666			12,731
Intangible assets		42,853			—
Research and development credits		8,211			27,257
Depreciation		6,321			5,571
Valuation reserves and accrued liabilities		4,849			6,020
Foreign tax credit		376			—
Stock compensation		4,128			3,955
Inventory		1,069			2,062
Patents		150			163
Defined benefit obligation		1,796			1,977
Other credits		1,291			589
Unrealized foreign currency exchange loss		—			2,556
Other		2,499			36
		81,209			62,917
Valuation allowance		(9,977	)		(27,578	)
Deferred tax liabilities:
Intangible assets		—			(2,925	)
Unrealized foreign currency exchange gains		(554	)		—
Undistributed profits of subsidiary		(4,352	)		(6,450	)
Property and equipment		(2,896	)		(1,611	)
Other		(583	)		(548	)
		(8,385	)		(11,534	)
Net deferred tax asset	$	62,847		$	23,805

Reconciliations Between Statutory Federal Income Tax Rate and Effective Rate

Reconciliations between the statutory Federal income tax rate of 21% and 34% and the effective rate of income tax expense for each of the three years in the period ended December 31, 2018 are as follows:

	Year Ended December 31,
	2018			2017			2016
Statutory Federal income tax rate		21.0	%		34.0	%		34.0	%
Increase (Decrease) resulting from:
U.S. Taxes on foreign income, net of taxes paid credit		—			—			1.3	%
Change in valuation allowance		(6.6	%)		10.6	%		5.3	%
Foreign, state and local tax, net of Federal benefit		1.8	%		0.8	%		1.1	%
Nondeductible expenses		3.4	%		2.4	%		2.4	%
Stock option compensation		—			(2.2	%)		—
Research and development credits		(2.5	%)		(4.6	%)		(0.7	%)
Effect of different tax rates of foreign jurisdictions		(6.6	%)		(20.8	%)		(15.0	%)
Undistributed profits of subsidiaries		1.2	%		5.8	%		7.9	%
Tax reform items		10.8	%		29.1	%		—
Other tax exempt income		—			—			—
Tax effects of intercompany transfers		0.8	%		(5.0	%)		(5.3	%)
Other		4.6	%		(1.0	%)		(0.3	%)
Effective rate		27.9	%		49.1	%		30.7	%

Net Operating Loss Carryforwards

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

Jurisdiction	Amount as of December 31, 2018		Years of Expiration
U.S. Federal and state income tax	$	80,337		2019- 2037
Foreign	$	15,912		2019- 2038
Foreign	$	5,776		Indefinite

Earnings Before Income Taxes

The earnings before income taxes and our tax provision are comprised of the following:

	Year Ended December 31,
	2018		2017		2016
Income before income taxes:
Domestic	$	10,092	$	1,258	$	12,981
Foreign		48,027		67,997		97,582
Total income before income taxes	$	58,119	$	69,255	$	110,563

Provision for Income Taxes

	Year Ended December 31,
	2018			2017			2016
Current income tax expense (benefit):
Federal	$	340		$	4,140		$	9,215
State and local		(71	)		150			749
Foreign		9,224			24,672			32,844
Total current income tax expense	$	9,493		$	28,962		$	42,808
Deferred income tax expense (benefit):
Federal	$	(1,422	)	$	15,207		$	(10,597	)
State and local		20			2,308			(742	)
Foreign		8,129			(12,449	)		2,496
Total deferred income tax expense	$	6,727		$	5,066		$	(8,843	)
Total tax expense	$	16,220		$	34,028		$	33,965

Reconciliation of Unrecognized Tax Benefits

The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Year Ended December 31,
	2018			2017			2016
Balance at beginning of year	$	4,522		$	4,486		$	4,443
Additions based on tax position related to current year		221			1,758			80
Additions based on tax positions related to prior year		458			4			366
Reductions from settlements and statute of limitation expiration		(2,179	)		(2,247	)		(299	)
Effect of foreign currency translation		(168	)		529			(104	)
Balance at end of year	$	2,854		$	4,522		$	4,486