Income Taxes

12 Months Ended

Dec. 31, 2021

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, 2021, 2020 and 2019:

	Year Ended December 31,
	2021			2020			2019
Earnings before income tax:
Domestic	$	(4,547	)	$	(11,374	)	$	74,531
Foreign		118,399			92,930			(15,380	)
Earnings before income tax	$	113,852		$	81,556		$	59,151

The components of the provision for income taxes for the years ended December 31, 2021, 2020 and 2019 are summarized as follows:

	Year Ended December 31,
	2021			2020			2019
Current income tax expense:
Federal	$	1,944		$	784		$	262
State and local		234			83			94
Foreign		18,390			20,150			17,672
Total current income tax expense	$	20,568			21,017			18,028
Deferred income tax (benefit) expense:
Federal		(4,400	)		(2,302	)		(2,490	)
State and local		(91	)		32			(1	)
Foreign		4,341			3,119			(5,252	)
Total deferred (benefit) income tax expense		(150	)		849			(7,743	)
Total income tax expense	$	20,418		$	21,866		$	10,285

As of December 31, 2021, 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 (“GILTI”) 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, 2021 and 2020:

	December 31,
	2021			2020
Deferred tax assets:
Net operating losses	$	25,610		$	22,658
Intangible assets		21,179			29,145
Research and development credits		9,736			10,773
Property and equipment		7,071			7,426
Valuation reserves and accrued liabilities		7,333			7,131
Capitalized Research and Development Costs		9,018
Stock compensation		3,832			4,200
Defined benefit obligation		1,466			1,974
Inventory		1,914			1,571
Other credits		10,158			12,068
Unrealized foreign currency exchange loss		—			1,431
Other		146			64
Total deferred tax asset		97,463			98,441
Valuation allowance		(16,090	)		(17,197	)
Deferred tax liabilities:
Unrealized foreign currency exchange gains	$	(2,488	)	$	—
Undistributed profits of subsidiary		(6,676	)		(5,727	)
Property and equipment		(2,420	)		(2,758	)
Other		(1,428	)		(572	)
Total deferred tax liability		(13,012	)		(9,057	)
Net deferred tax asset	$	68,361		$	72,187

Reconciliations between the statutory Federal income tax rate and the effective rate of income tax expense for the years ended December 31, 2021, 2020 and 2019 are as follows:

	Year Ended December 31,
	2021			2020			2019
Statutory Federal income tax rate		21.0	%		21.0	%		21.0	%
Increase (decrease) resulting from:
Change in valuation allowance		(1.2	)%		(0.4	)%		11.5	%
Effect of different tax rates of foreign jurisdictions		(5.2	)%		(4.7	)%		(24.8	)%
US taxes on foreign income, net of taxes paid credit		2.0	%		2.5	%		4.3	%
Tax credits & deductions related to R&D		(2.3	)%		(3.8	)%		(3.6	)%
Non-deductible expenses		1.7	%		2.1	%		3.4	%
Other foreign, state and local taxes		1.6	%		1.4	%		1.7	%
Tax effects of intercompany transfers		0.6	%		1.4	%		1.5	%
Undistributed profit of subsidiaries		1.0	%		0.9	%		1.2	%
Stock Option Compensation		(2.0	)%		(0.4	)%		1.0	%
Audit Settlements and Statute Expirations		0.0	%		3.9	%		0.6	%
Other		0.7	%		2.9	%		(0.4	)%
Effective rate		17.9	%		26.8	%		17.4	%

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

Jurisdiction	Amount as of December 31, 2021		Years of Expiration
U.S. state income tax	$	67,795	2022-2041
Foreign	$	199,153	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 2022 to 2041. 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, 2021, certain non-U.S. subsidiaries had NOL carryforwards totaling $199,153 which have no expiration date.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. As of December 31, 2021, the Company was no longer subject to U.S. Federal examinations by tax authorities for tax years before 2017 and was no longer subject to foreign examinations by tax authorities for tax years before 2014.

The Company currently benefits from tax holidays in various non-U.S. jurisdictions with expiration dates from 2024 – 2025.   The amount of corporate income tax savings realized by the Company as a result of the tax holidays during the current and prior years was immaterial as a result of operating losses previously generated.

At December 31, 2021, 2020 and 2019, the Company had total unrecognized tax benefits of $5,665, $4,967 and $3,795, 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,
	2021			2020			2019
Balance at beginning of year	$	4,967		$	3,795		$	2,819
Additions based on tax position related to current year		1,105			1,489			661
Additions based on tax position related to prior year		160			179			352
Reductions from settlements and statute of limitation expiration		(312	)		(650	)		—
Effect of foreign currency translation		(255	)		154			(37	)
Balance at end of year	$	5,665		$	4,967		$	3,795

The Company classifies income tax-related penalties and net interest as income tax expense.  In the years ended December 31, 2021, 2020 and 2019, 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.