Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2017

Income (loss) before taxes on income was as follows (in thousands):



	Years Ended December 31,
	2017			2016		2015
Domestic	$	(39,660	)	$	23,205	$	(15,944	)
Foreign	(21,570		)	12,064		17,159
Total	$	(61,230	)	$	35,269	$	1,215

Schedule of Components of Income Tax Expense (Benefit)

Provisions for taxes on income (loss) consisted of the following components (in thousands):



	Years Ended December 31,
	2017			2016			2015
Current:
Federal	$	3,764		$	(636	)	$	2,150
Foreign	7,512			3,585			5,600
State	3,351			175			528
Subtotal	14,627			3,124			8,278
Deferred:
Federal	(8,706		)	2,158			218
Foreign	(1,099		)	475			1,382
State	183			352			(673		)
Subtotal	(9,622		)	2,985			927
Total tax provision	$	5,005		$	6,109		$	9,205

Schedule of Effective Income Tax Rate Reconciliation

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% to income (loss) before taxes on income as a result of the following (in thousands):



	Years Ended December 31,
	2017			2016			2015
Income taxes (benefit) at U.S. federal statutory tax rate	$	(21,431	)	$	12,344		$	425
Increase (decrease) in taxes resulting from:
Change in the balance of the valuation allowance for deferred tax assets allocated to foreign income tax expense	4,598			1,364			(756		)
Change in the balance of the valuation allowance for deferred tax assets allocated to domestic income tax expense	12,755			(4,202		)	4,834
State income taxes, net of federal income tax benefit	2,270			342			(94		)
Divestitures	—			271			2,269
Meals and entertainment	785			736			761
Changes in taxes previously accrued	(1,339		)	23			(489		)
Foreign tax rate differences	913			(2,559		)	(1,468		)
Goodwill impairment	6,359			—			3,485
Recognition of uncertain tax positions	(62		)	85			24
Deemed mandatory repatriation	10,406			—			—
Release of deferred tax liability on foreign earnings	(7,051		)	—			—
Settlement of escrow arrangement	—			—			(1,115		)
Domestic Production Activities deduction	(1,921		)	(1,017		)	(528		)
Incremental U.S. taxes on undistributed foreign earnings	—			—			2,102
Other matters	(1,277		)	(1,278		)	(245		)
Total tax provision	$	5,005		$	6,109		$	9,205
Effective tax rate	(8.2		)%	17.3		%	757.6		%

Schedule of Deferred Tax Assets and Liabilities

Net deferred taxes consisted of the following (in thousands):



	December 31,
	2017			2016
Deferred income tax assets:
Foreign tax credit carryforwards	$	466		$	3,426
Net operating loss carryforwards	23,216			26,212
Accrued expenses	12,107			17,366
Other	4,707			8,701
Total gross deferred income tax assets	40,496			55,705
Less valuation allowance	(29,782		)	(15,428		)
Net deferred income tax assets	10,714			40,277
Deferred income tax liabilities:
Property, plant and equipment	(9,482		)	(12,627		)
Intangible assets	(2,201		)	(28,346		)
Undistributed foreign earnings	—			(7,051		)
Other	(6,576		)	(9,237		)
Total deferred income tax liabilities	(18,259		)	(57,261		)
Net deferred income tax liabilities	$	(7,545	)	$	(16,984	)

The Company’s tax assets and liabilities, netted by taxing location, are in the following captions in the balance sheets (in thousands):



	December 31,
	2017			2016
Current deferred income tax assets, net ⁽¹⁾	$	—		$	7,824
Current deferred income tax liabilities, net ⁽¹⁾	—			(3,317		)
Noncurrent deferred income tax assets, net	1,666			1,848
Noncurrent deferred income tax liabilities, net	(9,211		)	(23,339		)
Net deferred income tax liabilities	$	(7,545	)	$	(16,984	)

__________________________


⁽¹⁾	As of January 1, 2017, the Company adopted FASB Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires all deferred tax assets and liabilities, along with any related valuation allowance, to be presented as non-current. Prior period balances were not retrospectively adjusted.

Summary of Valuation Allowance

Activity in the valuation allowance is summarized as follows (in thousands):



	Years Ended December 31,
	2017			2016			2015
Balance, at beginning of year	$	15,428		$	18,897		$	19,353
Additions	19,260			3,095			7,783
Reversals	(183		)	(4,984		)	(5,294		)
Remeasurement of U.S. deferred tax balances	(5,141		)	—			—
Other adjustments	418			(1,580		)	(2,945		)
Balance, at end of year	$	29,782		$	15,428		$	18,897

Schedule of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):



	Years Ended December 31,
	2017			2016			2015
Balance, at beginning of year	$	2,465		$	2,410		$	2,672
Additions for tax positions of prior years related to acquisitions	—			148			—
Additions for tax positions of prior years	12			10			10
Lapse in statute of limitations	(274		)	(83		)	(218		)
Foreign currency translation	26			(20		)	(54		)
Balance, at end of year, total tax provision	$	2,229		$	2,465		$	2,410