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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the Company’s income (loss) before provision for income taxes are as follows (in thousands):
Year Ended December 31,
202420232022
U.S.$113,045 $136,498 $34,344 
Foreign(363,621)40,659 (39,296)
Income (loss) before provision for income taxes$(250,576)$177,157 $(4,952)

The provision for income taxes charged to operations consists of the following (in thousands):
Year Ended December 31,
202420232022
Current expense (benefit):
Federal$21,686 $26,592 $12,826 
State2,707 5,678 1,630 
Foreign3,075 16,509 7,725 
27,468 48,779 22,181 
Deferred expense (benefit):
Federal(1,361)942 (6,160)
State(406)(327)(960)
Foreign(35,883)(9,477)(24,445)
(37,650)(8,862)(31,565)
Total income tax expense (benefit)$(10,182)$39,917 $(9,384)
Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands):
December 31,
20242023
Deferred tax assets:
Bad debts$143 $164 
Inventories5,439 3,528 
Accrued warranties4,753 4,336 
Accrued compensation496 569 
Net operating loss4,247 2,181 
Equity-based compensation2,769 3,222 
Lease liabilities4,982 5,794 
Premium on capped call7,777 9,376 
Interest expense carryforward80 3,411 
Capitalized research and development expenses6,405 2,000 
Other5,164 4,580 
Deferred tax assets42,255 39,161 
Valuation allowance(11,181)(2,360)
Deferred tax assets, net31,074 36,801 
Deferred tax liabilities:
Property, plant, and equipment(2,349)(2,825)
Intangible assets(28,450)(79,913)
ROU assets(3,919)(5,051)
Deferred tax liabilities(34,718)(87,789)
Deferred tax asset (liability), net$(3,644)$(50,988)
A reconciliation of income tax expense computed at the federal statutory rate of 21% to actual income tax expense at the Company’s effective rate is as follows (in thousands):
Year Ended December 31,
202420232022
Income tax rate reconciliation
Income tax expense (benefit) at U.S. statutory rate$(52,621)$37,204 $(1,040)
State income taxes
1,732 4,150 530 
Officer’s compensation350 518 740 
Equity-based compensation595 (932)712 
Contingent consideration26 622 (947)
Tax credits(4,554)(407)(421)
Non-U.S. income taxed at different rate than U.S. statutory rate (15,135)2,658 (4,274)
Non-U.S. indirect tax incentives975 (5,035)(4,183)
Foreign derived intangible income benefit— (403)(1,668)
Transaction costs— — 1,628 
Non-deductible Goodwill Impairment49,560 — — 
Change in valuation allowance7,760 911 (534)
Uncertain tax benefits714 — — 
Nondeductible expenses481 299 10 
Other(65)332 63 
Total income tax expense (benefit)
$(10,182)$39,917 $(9,384)

During 2023 and 2022, the Company received a non-U.S. indirect tax incentive which was excluded from the local income tax base, resulting in a reduction of the overall effective tax rate of the Company. The income tax benefits from the non-U.S. indirect tax incentive was $5.0 million and $4.2 million for 2023 and 2022, respectively. Due to recent legislation, effective in 2024 these non-U.S. indirect tax incentives are no longer excluded from the local income tax base. In addition, in 2024, the Company reached a settlement under an amnesty program relating to treatment of the pre-acquisition of such non-US indirect tax incentives for years ended 2017 and 2018. Under the settlement, there was a repayment of the non-US indirect tax incentives from 2017 and 2018 along with penalties of $3.3 million, which were not deductible.

During the year ended December 31, 2024, the Company recorded impairment charges of $236.0 million related to goodwill and $91.9 million related to intangibles and PP&E. The goodwill impairment charge is non-deductible for income tax purposes, while a deferred tax benefit of $31.2 million offset by a valuation allowance against deferred tax assets of $7.2 million was recognized for the intangible and PP&E impairment. See Note 7 – Goodwill, Long-Lived Assets, and Other Intangible Assets for additional information.

As of December 31, 2024, the Company has federal income tax net operating loss (“NOL”) carryforwards of approximately $6.8 million that do not expire, state income tax NOL carryforwards of approximately $0.5 million that will expire in future years beginning in 2029, state tax credits of approximately $1.1 million that will expire in future years beginning in 2033, and certain foreign NOLs that are immaterial. As of December 31, 2023, the Company has federal income tax NOL carryforwards of approximately $6.8 million that do not expire, state income tax NOL carryforwards of approximately $2.3 million that will expire in future years beginning in 2029,
state tax credits of approximately $0.3 million that will expire in future years beginning in 2033, and certain foreign NOLs that are immaterial.

Realization of deferred tax assets is dependent upon generating sufficient taxable income of the appropriate type and in the appropriate jurisdictions. In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. It is not more likely than not that deferred tax assets from certain U.S. Federal, state and foreign net operating loss would be realized due to type and location of future earnings. As a result, the Company has a valuation allowance of $11.2 million and $2.4 million for the years ended December 31, 2024 and 2023.

ASC 740 addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. In accordance with ASC 740, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company’s assessments of its tax positions in accordance with ASC 740 did not result in changes that had a material impact on results of operations, financial condition or liquidity. As of December 31, 2024, 2023 and 2022, the Company had unrecognized income tax benefits of $0.7 million, zero and zero, respectively, of which the entirety would reduce our income tax provision, if recognized within the next twelve months. The Company does not expect any significant changes to the unrecognized tax benefits within the next twelve months.

A reconciliation of the unrecognized tax benefits included within Other long-term liabilities on the consolidated statement of operations is as follows (in thousands):
Year Ended December 31,
202420232022
Unrecognized tax benefits – January 1$— $— $— 
Gross increases – tax positions in prior period533 — — 
Gross decreases – tax positions in prior period— — — 
Gross increases – tax positions in current period181 — — 
Settlement— — — 
Lapse of statute of limitations— — — 
Unrecognized tax benefits – December 31$714 $— $— 

The Company files income tax returns in the U.S. federal jurisdiction, in multiple U.S. states, as well as in non-U.S. jurisdictions. Through global expansion and the acquisition of STI, the Company has a significant presence in Spain and Brazil. The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities. The Company is not subject to U.S. federal, state and non-U.S. income tax examinations by tax authorities for years before 2020. There are currently no income tax audits in any material jurisdictions.

The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Repatriation of funds could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or state income taxes and the impact of foreign currency movements. At December 31, 2024, management believed that sufficient liquidity was available in the U.S. The Company may consider repatriating certain funds from its non-U.S. subsidiaries that are not needed to finance
local operations; however, any repatriation activities are not expected to result in a significant incremental tax liability to the Company.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025. Certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. Due to the effective tax rates in which the Company operates, the Company meets certain safe harbor tests. As a result, there was no tax impact of Pillar Two for the year ended December 31, 2024.

The Company accounts for the 45X Credit under IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, for certain parts for which it is the manufacturer as a reduction to production costs with a corresponding reduction to Income Tax Payable. The reduction to production costs of $4.4 million for the year ended December 31, 2024, from the 45X Credit related to parts manufactured by the company, is excluded from Federal and state income taxes.