Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The effective tax rate from continuing operations was 26.0%, 22.9% and 25.6% in 2023, 2022 and 2021, respectively. A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows:

	Percent of Income before Income Taxes
	2023			2022			2021
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
State income taxes - net of federal tax benefit		2.8			2.0			3.1
Foreign tax rate differential		1.5			0.6			1.3
Non-deductible expenses		0.4			0.4			0.4
Tax carryforward expiration		—			2.5			—
Changes in unrecognized tax benefits		—			(1.0	)		—
Valuation allowances		—			(2.3	)		—
Other		0.3			(0.3	)		(0.2	)
Effective tax rate for the year		26.0	%		22.9	%		25.6	%

Income before income taxes was attributable to the following sources:

	2023		2022		2021
United States	$	55,553	$	66,646	$	36,203
Foreign		10,503		11,564		8,890
Totals	$	66,056	$	78,210	$	45,093

Income tax expense consisted of the following:

	Year ended December 31,
	2023		2022		2021
Current:
Federal	$	11,296	$	11,583	$	4,901
State and local		2,237		1,739		1,439
Foreign		2,617		2,549		2,389
Total current provision		16,150		15,871		8,729
Deferred:
Federal		617		1,675		2,534
State and local		62		230		345
Foreign		360		167		(53	)
Total deferred provision		1,039		2,072		2,826
Provision for income taxes	$	17,189	$	17,943	$	11,555

During 2018, the Company recorded a provision and related deferred tax liability of $0.6 million related primarily to the earnings of the Company’s subsidiary in Guatemala, which were deemed by management to no longer be permanently reinvested. The earnings and profits for all foreign subsidiaries had been previously included in the calculation of the one-time deemed repatriation transition tax, and thus, should there be a repatriation of earnings from any other foreign subsidiaries in future periods, the Company expects to be subject to only foreign withholding tax. Management does not currently anticipate a repatriation of earnings from any other foreign subsidiaries, except as provided above, as these earnings are deemed to be permanently reinvested.

Significant components of the Company’s deferred taxes as of December 31, 2023 and 2022 are as follows:

	2023			2022
Deferred income tax assets
Compensation accruals	$	2,487		$	2,449
Inventory valuation		2,515			1,553
Allowance for uncollectible accounts		672			510
Non-deductible accruals		4,040			4,137
Operating lease liability		6,025			5,932
Finance lease liability		1,934			1,981
Other deductible non-goodwill intangibles		5,473			5,369
State deferred taxes		—			32
Capital loss carryforwards		127			127
Net operating loss carryforwards		73			21
		23,346			22,111
Valuation allowance		(127	)		(127	)
		23,219			21,984
Deferred income tax liabilities
Property, plant and equipment		12,208			10,508
Goodwill and indefinite-lived intangibles		10,254			9,438
Right of use asset - operating leases		5,878			5,832
Finance lease assets		1,820			1,906
State deferred taxes		18			—
Other		1,492			1,679
		31,670			29,363
Net deferred income tax liability	$	(8,451	)	$	(7,379	)

In 2022, the Company impaired its investment in a joint venture, as described in Note 1, incurring a capital loss for which a deferred tax asset of $0.1 million was recorded. As of December 31, 2022 a valuation allowance of $0.1 million was recorded against this capital loss deferred tax asset, as the recovery is not more likely than not.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	2023		2022			2021
Balance at January 1	$	—	$	774		$	774
Increases related to previous year tax positions		—		—			—
Reductions due to lapse of applicable statute of limitations		—		(774	)		—
Balance at December 31	$	—	$	—		$	774

The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $0.0 million, $0.0 million and $0.8 million at December 31, 2023, 2022 and 2021, respectively.

The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of December 31, 2023, the Company is no longer subject to U.S. Federal examinations by tax authorities for tax years before 2020. In addition, the Company is subject to non-U.S. income tax examinations for tax years of 2018 through 2022.