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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
For the year ended December 31, 2024, our income tax provision resulted in an effective tax rate of 9.4%. For the year ended December 31, 2023, our income tax provision resulted in an effective tax rate of 6.4%. Our income tax provision for the year ended December 31, 2024 and 2023 was $3.3 million and $4.6 million, respectively, and includes federal, state and foreign taxes.
The components of our tax provision and benefit were as follows (in thousands):
 
CurrentDeferredTotal
Twelve months ended December 31, 2024:
U.S. Federal$305 $(61)$244 
State & local481 — 481 
Foreign jurisdictions3,514 (963)2,551 
Tax provision$4,300 $(1,024)$3,276 
Twelve months ended December 31, 2023:
U.S. Federal$(145)$304 $159 
State & local338 — 338 
Foreign jurisdictions3,110 971 4,081 
Tax provision$3,303 $1,275 $4,578 
The components of loss before income taxes for the years ended December 31, 2024 and 2023 were as follows (in thousands):
 Twelve Months Ended
December 31,
 20242023
Domestic$(42,477)$(86,077)
Foreign7,487 14,933 
Loss before income taxes
$(34,990)$(71,144)

The income tax provision in 2024 and 2023, respectively, differed from the amounts computed by applying the U.S. federal income tax rate of 21% in 2024 and 2023, as a result of the following (in thousands):
 Twelve Months Ended
December 31,
 20242023
Loss before income taxes
$(34,990)$(71,144)
Computed income tax benefit at statutory rate
(7,348)(14,940)
State income taxes, net of federal benefit320 (200)
Foreign tax rate differential290 1,229 
Non-cash compensation74 108 
Deferred taxes on investment in foreign subsidiaries(124)305 
Non-deductible expenses247 246 
Foreign withholding 258 641 
Prior year tax adjustments105 (299)
Valuation allowance9,221 16,512 
Other233 976 
Total expense for income tax
$3,276 $4,578 
        The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands): 
 December 31,
 20242023
Deferred tax assets:
Accrued compensation and benefits$4,480 $4,710 
Receivables229 262 
Inventory319 311 
Share based compensation354 525 
Other accrued liabilities1,197 1,974 
Tax credit carry forward2,862 3,038 
Interest expense limitation51,414 41,477 
Goodwill and intangible costs8,078 9,110 
Debt related cost
2,621 4,174 
Net operating loss carry forwards46,348 45,351 
Other1,984 611 
Deferred tax assets119,886 111,543 
Less: Valuation allowance(102,201)(93,677)
Deferred tax assets, net$17,685 $17,866 
Deferred tax liabilities:
Property, plant and equipment(14,075)(15,947)
Unremitted earnings of foreign subsidiaries(2,837)(2,960)
Other(4,156)(3,476)
Deferred tax liabilities(21,068)(22,383)
Net deferred tax liability
$(3,383)$(4,517)
As of December 31, 2024, a valuation allowance of $102.2 million was recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized, primarily attributable to the domestic operations. A significant factor of negative evidence evaluated for the domestic jurisdiction was the cumulative pre-tax loss incurred over the three-year period ended December 31, 2024.
As of December 31, 2024, we had net operating loss carryforwards for U.S. federal income tax purposes of $134.0 million, all of which have an indefinite carryforward period. These carryforwards are available, subject to certain limitations such as mentioned above, to offset future taxable income. Further, we have state net operating loss carryforwards of $230.0 million with $177.5 million expiring on various dates through 2043 and $52.5 million with an indefinite carryforward period.
As of December 31, 2024, we had interest expense carryforward for U.S. income tax purposes of $227.5 million. The entire $227.5 million has an indefinite carryforward period. These carryforwards are available, subject to certain limitations, to offset future taxable income.
As of December 31, 2024, we had $2.7 million of tax credits that will expire on various dates through 2037 if not utilized.
As of December 31, 2024, we had foreign net operating loss carryforwards totaling $18.8 million. Of this amount, $0.2 million will expire on various dates through 2033 and $18.6 million has an unlimited carryforward period.
As of December 31, 2024, none of our undistributed earnings of foreign operations were considered to be permanently reinvested overseas. As of December 31, 2024, the deferred tax liability related to undistributed earnings of foreign subsidiaries was $2.8 million.
We file income tax returns in the U.S. federal and state jurisdictions as well as various foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years prior to 2016. We are currently under audit in one of the states in which we do substantial business. As of December 31, 2024, we recorded a $0.9 million tax liability in our uncertain positions related to this audit due to retroactive changes included in final regulations issued by the state. Certain Dutch entities were also under audit. We do not anticipate any material adjustments related to these examinations.
Periodic examinations of our tax filings occur by the taxing authorities for the jurisdictions in which we conduct business. These examinations review the significant positions taken on our returns, including the timing and amount of income and deductions reported, as well as the allocation of income among multiple taxing jurisdictions. We do not expect any material adjustments to result from positions taken on our income tax returns.
As of December 31, 2024, $2.2 million of unrecognized tax benefits would affect our effective tax rate. We estimate the uncertain tax benefits that may be recognized within the next twelve months will not be material. Our policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense.
The following table summarizes a reconciliation of gross unrecognized tax benefits, excluding penalties and interest, for the year ended December 31, 2024 and 2023 (in thousands):
 Twelve Months Ended
December 31,
 20242023
Unrecognized tax benefits - January 1$1,452 $1,097 
Additions based on tax positions related to prior years— 399 
Reductions based on tax positions related to prior years
(74)— 
Reductions resulting from a lapse of the applicable statute of limitations(116)(44)
Unrecognized tax benefits - December 31$1,262 $1,452 

We have recorded the unrecognized tax benefits in other long-term liabilities in the consolidated balance sheets. As of December 31, 2024 and 2023, the total amount of accrued interest and penalties related to unrecognized tax benefits was $0.9 million and $0.8 million, respectively. There was approximately $0.1 million and $0.2 million of interest or penalties related to unrecognized tax benefits that were recorded in income tax expense for the years ended December 31, 2024, and 2023, respectively.