Income Taxes

12 Months Ended

Dec. 31, 2021

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:

	2021		2020			2019
	(In thousands)
Domestic	$	74,509	$	65,908		$	62,639
Foreign		4,114		(927	)		(1,032	)
Total	$	78,623	$	64,981		$	61,607

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

	2021			2020			2019
	(In thousands)
Current:
Federal	$	15,299		$	14,482		$	12,113
State		3,556			3,419			2,591
Foreign		1,939			819			1,250
Deferred:
Federal		(1,774	)		(2,495	)		(1,066	)
State		(600	)		(644	)		417
Foreign		(681	)		57			(875	)
Total	$	17,739		$	15,638		$	14,430

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:

	2021			2020			2019
	(In thousands)
Provision at statutory rate	$	16,511		$	13,646		$	12,938
State income taxes, net of federal tax benefit		2,288			2,196			2,080
Valuation allowance		168			1,302			515
Foreign - tax rate differential and other		606			(267	)		70
Federal tax credits		(770	)		(517	)		(609	)
Compensation subject to section 162(m)		685			110			66
Stock based compensation		(1,510	)		(682	)		(253	)
Other		(239	)		(150	)		(377	)
Actual provision	$	17,739		$	15,638		$	14,430

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

	2021			2020
	(In thousands)
Deferred tax assets:
Reserve for receivables and inventory	$	2,532		$	2,618
Accrued compensation		2,641			1,874
Reserves and payables		3,101			2,741
Accrued post-retirement medical benefits		1,381			1,535
Net operating loss and credit carryforwards		2,260			2,106
Deferred compensation		1,041			829
Accrued qualified plan benefits		1,034			511
Accrued stock-based compensation		1,212			1,216
Deferred revenue		2,530			2,596
Operating lease liabilities		959			1,708
Other		967			713
Total gross deferred tax assets		19,658			18,447
Less: valuation allowance		(2,169	)		(2,140	)
Total net deferred tax assets		17,489			16,307
Deferred tax liabilities:
Property, plant and equipment		5,056			5,204
Intangible assets		8,475			8,795
Prepaids		413			552
Operating lease assets		949			1,699
Other		452			663
Total deferred tax liabilities		15,345			16,913
Net deferred tax assets (liabilities)	$	2,144		$	(606	)

As of December 31, 2021, the Company had foreign net operating loss carryforwards of approximately $6.0 million with an unlimited carryforward period.  The Company’s tax credit carryforward of $0.5 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.

  In general, it is the Company's practice and intention to reinvest earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2021, the Company has not made a provision for incremental U.S. income taxes or additional foreign withholding taxes on approximately $15.0 million of such undistributed earnings, $13.4 million of which was previously subject to U.S. tax that is deemed indefinitely reinvested.  

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

	2021			2020
	(In thousands)
Balance at beginning of year	$	1,123		$	1,165
Increases in unrecognized tax benefits as a result of positions taken during the    prior year		52			—
Increases in unrecognized tax benefits as a result of positions taken during the    current year		230			209
Reductions to unrecognized tax benefits as a result of a lapse of the applicable    statute of limitations		(233	)		(251	)
Balance at end of year	$	1,172		$	1,123

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 2018, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2017. 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, 2021 and 2020 and there were no penalties accrued in either year.