Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 8    Income Taxes

The Company is subject to income taxes in the United States and numerous foreign jurisdictions.  Significant judgment is required in determining the worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

Details of earnings before income taxes are as follows:

	2020			2019			2018
	(In thousands)
Domestic	$	65,908		$	62,639		$	31,584
Foreign		(927	)		(1,032	)		4,268
Total	$	64,981		$	61,607		$	35,852

The provision (benefit) for income taxes is as follows:

	2020			2019			2018
	(In thousands)
Current:
Federal	$	14,482		$	12,113		$	9,223
State		3,419			2,591			2,640
Foreign		819			1,250			1,468
Deferred:
Federal		(2,495	)		(1,066	)		(2,890	)
State		(644	)		417			(1,765	)
Foreign		57			(875	)		(614	)
Total	$	15,638		$	14,430		$	8,062

The provision for income tax differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate in each year due to the following items:

	2020			2019			2018
	(In thousands)
Provision at statutory rate	$	13,646		$	12,938		$	7,529
State income taxes, net of federal tax benefit		2,196			2,080			717
Valuation allowance		1,302			515			—
Foreign - tax rate differential and other		(267	)		70			159
Federal tax credits		(517	)		(609	)		(742	)
Compensation subject to section 162(m)		110			66			562
Stock based compensation		(682	)		(253	)		(384	)
Tax rate difference on temporary adjustments		—			—			(460	)
Other		(150	)		(377	)		681
Actual provision	$	15,638		$	14,430		$	8,062

The components of deferred income taxes as of December 31 are as follows:

	2020			2019
	(In thousands)
Deferred tax assets:
Reserve for receivables and inventories	$	2,618		$	2,108
Accrued compensation		1,874			888
Reserves & payables		2,741			1,410
Non-pension postretirement benefits		1,535			1,505
Net operating loss and credit carryforwards		2,106			1,401
Accrued pension benefits		982			933
Accrued employee benefits		1,574			1,747
Deferred revenue		2,596			2,219
Operating lease liabilities		1,708			1,861
Other		713			497
Total gross deferred tax assets		18,447			14,569
Less: valuation allowance		(2,140	)		(863	)
Total net deferred tax assets		16,307			13,706
Deferred tax liabilities:
Depreciation		5,204			4,673
Amortization		8,795			6,158
Prepaids		552			529
Operating lease assets		1,699			1,850
Other		663			630
Total deferred tax liabilities		16,913			13,840
Net deferred tax liabilities	$	(606	)	$	(134	)

As of December 31, 2020, the Company has foreign net operating loss carryforwards of approximately $6 million with an unlimited carryforward period.  The Company’s tax credit carryforward of $0.4 million relates to state specific tax credits that the Company expects to fully utilize in future tax periods. The Company has recorded a full valuation allowance against certain deferred tax assets which are not likely to be realized. The valuation allowance relates primarily to a foreign net operating loss carryforward.  

No provision for federal income taxes was made on the earnings of foreign subsidiaries that are considered indefinitely invested or that would be offset by foreign tax credits upon distribution. Such undistributed earnings at December 31, 2020 were $20.6 million, all of which was previously taxed in the U.S. under the transition tax provisions and other provisions of the Internal Revenue Code. 

Changes in the Company's gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows:

	2020			2019
	(In thousands)
Balance at beginning of year	$	1,165		$	1,121
Increases in unrecognized tax benefits as a result of positions taken during the    prior year		—			88
Increases in unrecognized tax benefits as a result of positions taken during the    current year		209			235
Reductions to unrecognized tax benefits as a result of a lapse of the applicable    statute of limitations		(251	)		(279	)
Balance at end of year	$	1,123		$	1,165

The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits during the fiscal year ending December 31, 2021. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate.

  The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2017, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2016. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses.  Accrued interest was approximately $0.1 million at both December 31, 2020 and 2019 and there were no penalties accrued in either year.