Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 21 – INCOME TAXES:

Income (loss) from operations before income taxes for the years ended December 31, 2022 and 2021 is summarized below. Income (loss) from operations before income taxes for certain foreign entities is classified differently for book reporting and income tax reporting purposes.

	2022		2021
Domestic	$	1,438	$	(9,223	)
Foreign		4,118		8,228
Income (loss) from operations before income taxes	$	5,556	$	(995	)

The income tax provision for the years ended December 31, 2022 and 2021 consisted of the following:

	2022			2021
Current:
Federal	$	—		$	—
State		219			(16	)
Foreign		889			1,017
Current income tax provision		1,108			1,001
Deferred:
Federal		(3	)		(1,122	)
State		2,177			(937	)
Foreign		52			1,138
(Decrease) increase in valuation allowance		(1,758	)		2,225
Deferred income tax provision		468			1,304
Total income tax provision	$	1,576		$	2,305

The difference between statutory U.S. federal income tax and the Corporation’s effective income tax for the years ended December 31, 2022 and 2021 was as follows:

	2022			2021
Computed at statutory rate	$	1,167		$	(209	)
State income taxes		(924	)		(949	)
Rate change		2,857			482
Tax differential on non-U.S. earnings		—			(49	)
GILTI inclusion		—			305
Stock-based compensation		183			152
Meals and entertainment		28			10
Adjustments to net operating losses		296			275
(Decrease) increase in valuation allowance		(1,758	)		2,225
Other – net		(273	)		63
Total income tax provision	$	1,576		$	2,305

Deferred income tax assets and liabilities as of December 31, 2022 and 2021 are summarized in the following table. Unremitted earnings of the Corporation’s non-U.S. subsidiaries and affiliates are deemed to be permanently re-invested and, accordingly, no deferred income tax liability has been recorded. If the Corporation were to remit any foreign earnings to the U.S., the estimated tax impact would be insignificant.

	2022			2021
Assets:
Employment – related liabilities	$	4,931		$	7,378
Pension liability – domestic		5,873			7,984
Capital loss carryforwards		182			204
Asbestos-related liability		12,005			14,685
Net operating loss – domestic		12,224			13,156
Net operating loss – state		3,172			5,415
Net operating loss – foreign		8,504			9,666
Impairment charge associated with investment in MG		956			961
Operating lease right-of-use assets		855			980
Interest expense limitation		814			2,517
Sale-leaseback		9,784			—
Other		643			797
Gross deferred income tax assets		59,943			63,743
Valuation allowance		(31,981	)		(37,889	)
		27,962			25,854
Liabilities:
Depreciation		(24,085	)		(22,015	)
Inventory related		(1,576	)		(1,511	)
Pension asset – foreign		(808	)		(1,482	)
Intangible assets – finite life		(241	)		(565	)
Intangible assets – indefinite life		(453	)		(510	)
Operating lease liabilities		(855	)		(980	)
Other		(321	)		(664	)
Gross deferred income tax liabilities		(28,339	)		(27,727	)
Net deferred income tax liabilities	$	(377	)	$	(1,873	)

At December 31, 2022, the Corporation has U.S. federal net operating loss carryforwards of $58,211, of which $54,870 can be carried forward indefinitely but will be limited to 80% of taxable income in any given year. The balance of $3,341 will begin to expire in 2035 and can be used without taxable income limitation. Additionally, at December 31, 2022, the Corporation had state net operating loss carryforwards of $77,747, which begin to expire in 2023, and foreign net operating loss carryforwards of $39,592 and capital loss carryforwards of $730, which do not expire.

Unrecognized tax benefits and changes in unrecognized tax benefits for the years ended December 31, 2022 and 2021 are insignificant. If the unrecognized tax benefits were recognized, the effect on the Corporation’s effective income tax rate would also be insignificant. The amount of penalties and interest recognized in the consolidated balance sheets as of December 31, 2022 and 2021 and in the consolidated statements of operations for 2022 and 2021 is insignificant.

In 2022, new legislation was enacted which will decrease the Pennsylvania state income tax rate from 9.99% to 4.99% in 2031. In 2021, new legislation was enacted which will increase the U.K. corporate income tax rate from 19% to 25% in 2023.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted in the United States. Among other provisions, the IRA included a new 15% Corporate Alternative Minimum Tax (“CAMT”) for corporations with financial income in excess of $1 billion and a 1% excise tax on corporate share repurchases. The CAMT is effective for tax years beginning on or after January 1, 2023. The excise tax on corporate share repurchases is not expected to impact the Corporation as the Corporation's revolving credit facility prohibits the Corporation from repurchasing its shares.

The Corporation is subject to taxation in the United States, various states and foreign jurisdictions, and remains subject to examination by tax authorities for 2013, due to the carryback of net operating losses enabled by the Coronavirus Aid, Relief, and Economic Security Act signed into law in 2020, and for tax years 2019 – 2022.