Income Taxes

Pre-tax income (loss) consisted of the following for the years ended December 31:



	2019		2018 (as restated)		2017
Domestic ¹	$	4,777	$	23,092	$	(2,940	)
Foreign	16,779		26,484		15,738
Total	$	21,556	$	49,576	$	12,798

⁽¹⁾ The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 2 for details.

A reconciliation of income taxes computed at the statutory rates to the reported income tax provision for the years ended December 31 follows:



	2019			2018 (as restated)			2017
Federal provision at statutory rate ¹	$	4,527		$	10,411		$	4,480
U.S./Foreign tax rate differential	393			731			(919		)
Foreign non-deductible expenses	2,059			(1,759		)	(2,006		)
Foreign tax provision	793			1,253			615
State taxes, net of federal benefit ¹	308			619			49
State tax rate change, net of federal benefit	(41		)	(32		)	(264		)
Change in uncertain tax positions	15			84			119
Change in valuation allowance	(2,054		)	597			2,475
Tax credits	(2,652		)	(2,049		)	(152		)
Share-based compensation	(14		)	(50		)	(657		)
Change in U.S. corporate tax rate	—			—			7,277
Repatriation of foreign earnings	1,235			(3,670		)	3,964
GILTI, net of related foreign tax credit	730			1,194			—
Other	479			758			86
Provision for income taxes	$	5,778		$	8,087		$	15,067

⁽¹⁾ The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 2 for details.

The provision (benefit) for income taxes for the years ended December 31 follows:



	2019									2018 (as restated)							2017
	Current			Deferred			Total			Current			Deferred		Total		Current		Deferred			Total
Federal ¹	$	(205	)	$	(336	)	$	(541	)	$	(3,432	)	$	4,426	$	994	$	2,954	$	7,446		$	10,400
State and local ¹	214			883			1,097			123			87		210		362		(384		)	(22		)
Foreign	4,207			1,015			5,222			6,365			518		6,883		4,042		647			4,689
Total	$	4,216		$	1,562		$	5,778		$	3,056		$	5,031	$	8,087	$	7,358	$	7,709		$	15,067

⁽¹⁾ The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 2 for details.

A summary of deferred income tax assets and liabilities as of December 31 follows:



	2019			2018 (as restated)
Noncurrent deferred tax assets: ¹
Amortization and fixed assets	$	1,457		$	1,992
Accounts receivable	129			166
Inventories	2,032			2,226
Pension obligations	2,134			2,375
Warranty obligations	741			827
Accrued benefits	369			382
Foreign exchange contracts	91			(367		)
Restricted stock	126			106
Operating leases	165			—
Tax credit carryforwards	3,843			3,537
Net operating loss carryforwards	12,657			16,817
Other temporary differences not currently available for tax purposes	2,902			2,945
Total noncurrent deferred tax assets	$	26,646		$	31,006
Valuation allowance	(11,992		)	(14,665		)
Net noncurrent deferred tax assets	$	14,654		$	16,341
Noncurrent deferred tax liabilities:
Amortization and fixed assets	$	(2,501	)	$	(2,960	)
Accounts receivable	72			54
Inventories	115			123
Warranty obligations	1			1
Accrued benefits	(111		)	67
Operating leases	27			—
Net operating loss carryforwards	1,517			2,272
Other temporary differences not currently available for tax purposes	(678		)	(351		)
Total noncurrent tax liabilities	(1,558		)	(794		)
Total net deferred tax asset	$	13,096		$	15,547

⁽¹⁾ The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 2 for details.

We assess whether valuation allowances should be established against deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with unused tax attributes expiring and tax planning alternatives. In making such judgments, significant weight is given to evidence that can be objectively verified.

During 2019, we recorded additional valuation allowance of $0.7 million on the deferred tax assets of our United Kingdom subsidiary and certain U.S. state tax net operating loss carryforwards, and released $3.4 million in valuation allowances related to the deferred tax assets of our Luxembourg subsidiaries. We expect to be able to realize the benefits of all of our deferred tax assets that are not currently offset by a valuation allowance, as discussed above. In the event that our actual results differ from our estimates or we adjust these estimates in future periods, the effects of these adjustments could materially impact our financial position and results of operations.

As of December 31, 2019, the Company had net operating loss carryforwards of $115.2 million, of which $55.2 million related to foreign jurisdictions and $60.0 million related to U.S. state jurisdictions. The carryforward periods for these net operating losses range from five years to indefinite. Utilization of these losses is subject to the tax laws of the applicable tax jurisdiction and may be limited by the ability of certain subsidiaries to generate taxable income in the associated tax jurisdiction. We have established valuation allowances for all net operating losses that we believe are more likely than not to expire before they can be utilized.

As of December 31, 2019, we had $2.5 million of U.S. foreign tax credits carried forward primarily attributable to the deemed repatriation of the accumulated untaxed earnings of our foreign subsidiaries resulting from the U.S. Tax Reform. Utilization of these credits may be limited if the Company does not continue to generate U.S. federal taxable income in future years. The credits begin to expire in 2027.

As of December 31, 2019, we had $1.3 million of research and development tax credits being carried forward related to our U.S. operations. Utilization of these credits may be limited if the Company does not continue to generate U.S. federal taxable income in future years. As a result of the Tax Cuts and Jobs Act of 2017, the unutilized research and development tax credits the Company generated after December 31, 2017 can be carried forward indefinitely whereas the credits generated prior to that date are subject to a 20-year carryforward period. Approximately $0.5 million of the Company's tax credits are subject to the 20-year carryforward period and begin to expire between between 2025 and 2039.

As of December 31, 2019, cash of $39.5 million was held by foreign subsidiaries. During the year ended December 31, 2019, $19.4 million, net of $1.0 million in foreign withholding tax incurred, was repatriated from the Company's foreign subsidiaries. The Company plans to repatriate an additional $12.0 million in 2020 and a $0.8 million deferred tax liability was recorded during the year ended December 31, 2019 for the expected future income tax implications.

We file federal income tax returns in the U.S. and income tax returns in various states and foreign jurisdictions. In the U.S., we are generally no longer subject to tax assessment for tax years prior to 2016. In our major non-U.S. jurisdictions including China, Czech Republic, Mexico and the United Kingdom, tax years are typically subject to examination for three to five years.

As of December 31, 2019, and 2018, we provided a liability of $0.9 million for unrecognized tax benefits related to U.S. federal and state, and foreign jurisdictions. The majority of these unrecognized tax benefits are netted against their related noncurrent deferred tax assets.

We accrue interest and penalties related to unrecognized tax benefits through income tax expense. We had $0.4 million and $0.3 million accrued for the payment of interest and penalties as of December 31, 2019 and December 31, 2018, respectively. Accrued interest and penalties are included in the $0.9 million of unrecognized tax benefits.

A reconciliation of the beginning and ending amount of unrecognized tax benefits (including interest and penalties) at December 31 follows:



	2019			2018 (as restated)			2017
Balance - Beginning of the year ¹	$	894		$	811		$	1,098
Gross increase - tax positions in prior periods ¹	70			66			70
Gross decreases - tax positions in prior periods ¹	(39		)	(14		)	(219		)
Gross increases - current period tax positions ¹	—			59			65
Lapse of statute of limitations	(12		)	(12		)	(221		)
Currency translation adjustment	(5		)	(16		)	18
Balance - End of the year ¹	$	908		$	894		$	811

⁽¹⁾ The Company has adjusted certain prior period amounts for the restatement and immaterial corrections of error. See Note 2 for details.