Income Taxes

12 Months Ended

Dec. 31, 2025

Income Taxes

Income Taxes

(11) Income Taxes

The significant components of the Company’s deferred income tax liabilities and assets are as follows:

	December 31,
	2025		2024
	(in millions)
Deferred income tax liabilities:
Excess tax over book depreciation	$	29.1	$	26.5
Intangibles		57.0		43.7
Goodwill		4.4		2.2
Foreign earnings		1.0		1.0
Operating lease ROU assets		18.3		8.6
Other		4.1		5.4
Total deferred tax liabilities		113.9		87.4
Deferred income tax assets:
Accrued expenses		6.9		5.7
Accrued bonus		9.8		6.8
Product liability		5.3		5.0
Operating lease liabilities		19.1		9.3
Stock based compensation		6.2		6.2
Foreign tax credits		4.9		13.5
Net operating loss carry forward		11.9		5.2
Capital loss carry forward		—		1.6
Inventory reserves		17.2		14.9
Intangibles		8.9		10.5
Capitalized R&D		3.5		41.7
Other		12.1		12.1
Total deferred income tax assets		105.8		132.5
Less: valuation allowance		(10.5)		(19.6)
Net deferred income tax assets		95.3		112.9
Net deferred income tax (liabilities) assets	$	(18.6)	$	25.5

The provision for income taxes is based on the following pre-tax income:

	Years Ended December 31,
	2025		2024		2023
	(in millions)
Domestic	$	344.8	$	270.3	$	228.2
Foreign		101.0		115.7		121.3
	$	445.8	$	386.0	$	349.5

The provision for income taxes consists of the following:

	Years Ended December 31,
	2025		2024		2023
	(in millions)
Current tax expense:
U.S. federal	$	24.5	$	62.5	$	54.6
U.S. state and local		16.6		15.3		15.8
Non-U.S.		25.3		31.9		35.6
Total current		66.4		109.7		106.0
Deferred tax expense (benefit):
U.S. federal		36.7		(11.8)		(14.7)
U.S. state and local		1.8		(1.9)		(4.1)
Non-U.S.		0.1		(1.2)		0.2
Total deferred		38.6		(14.9)		(18.6)
Provision for income taxes	$	105.0	$	94.8	$	87.4

The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, on a prospective basis for the year ended December 31, 2025. The following table provides the required disclosures under ASU 2023-09 and reconciles the U.S. federal statutory income tax amount and rate to the Company’s global effective income tax amount and rate for the year ended December 31, 2025:

	Year ended December 31,
	2025		Percent
	(in millions)
U.S. federal statutory income tax rate	$	93.6	21.0	%
State and local taxes (a)		14.5	3.3
Foreign tax effects		3.6	0.8
Effect of cross-border tax laws		(0.7)	(0.2)
Tax credits
Foreign tax credits		8.9	2.0
Other		(2.8)	(0.6)
Changes in valuation allowances		(9.6)	(2.2)
Nontaxable or nondeductible items		4.2	0.9
Changes in unrecognized tax benefits		0.4	0.1
Reversal of prior year tax liability		(8.4)	(1.9)
Other adjustments		1.3	0.3
Total	$	105.0	23.5	%

(a) In 2025, state and local taxes in California, Massachusetts, Florida, New Jersey, Minnesota and New Hampshire made up the majority (greater than 50 percent) of the tax effect in this category.

The table below presents the disclosures required prior to the adoption of ASU 2023-09 and provides a reconciliation of the U.S. federal statutory income tax rate to the Company’s global effective income tax rate for the years ended December 31, 2024 and 2023.

	Years Ended December 31,
	2024		2023
Computed expected federal income expense	$	81.1	$	73.4
State income taxes, net of federal tax benefit		10.6		9.3
Foreign tax rate differential		3.2		4.3
Valuation allowance		(4.0)		3.5
One time repatriation		3.1		1.2
Unrecognized tax benefits, net		1.2		1.4
Other, net		(0.4)		(5.7)
	$	94.8	$	87.4

At December 31, 2025, the Company had foreign and domestic net operating loss carry forwards of $26.2 million and $25.7 million, respectively, for income tax purposes before considering valuation allowances; $26.2 million of the foreign losses can be carried forward indefinitely, $25.7 million of the domestic losses expire as early as 2036 with the majority having an indefinite carryforward period. The net operating losses consist of $26.2 million related to Austrian operations and $25.7 million related to domestic operations.

At December 31, 2025 and 2024, the Company had foreign tax credit carry forwards of $4.7 million and $13.5 million, respectively, for income tax purposes before considering valuation allowances. The foreign tax credit carryforwards expire between 2027 and 2033.

At December 31, 2025 and 2024, the Company had valuation allowances of $10.5 million and $19.6 million, respectively. At December 31, 2025, $4.6 million related to foreign tax credits and $5.9 million related to Austrian net operating losses. At December 31, 2024, $12.8 million related to foreign tax credits, $5.1 million related to Austrian net operating losses, and $1.7 million related to the domestic capital loss carry forward. Management believes that the ability of the Company to use such foreign tax credits and losses within the applicable carry forward period does not rise to the level of the more likely than not threshold. The Company does not have a valuation allowance on other deferred tax assets, as management believes that it is more likely than not that the Company will recover the net deferred tax assets. Management believes it is more likely than not that the future reversals of the deferred tax liabilities, together with forecasted income, will be sufficient to fully recover the deferred tax assets.

Subsequent to recording the Toll Tax as part of the Tax Cuts and Jobs Act of 2017, after December 2017, the Company considers all of its foreign earnings to be permanently reinvested outside of the U.S. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Unrecognized Tax Benefits

As of December 31, 2025, the Company had gross unrecognized tax benefits of approximately $5.3 million, approximately $5.2 million of which, if recognized, would affect the effective tax rate. The difference between the amount of unrecognized tax benefits and the amount that would affect the effective tax rate consists of allowable correlative adjustments that are available for certain jurisdictions.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	(in millions)
Balance at January 1, 2025	$	4.9
Increases related to prior year tax positions		0.5
Decreases related to current year tax positions		—
Decreases due to lapse in statutes		(0.4)
Currency movement		0.3
Balance at December 31, 2025	$	5.3

The Company conducts business in a variety of locations throughout the world resulting in tax filings in numerous domestic and foreign jurisdictions. The Company is subject to tax examinations regularly as part of the normal course of business. The Company’s major jurisdictions are the U.S., France, Germany, Italy and Canada. The statute of limitations in the U.S. is subject to tax examination for 2022 and later; France, Germany, Italy and Canada are subject to tax examination for 2019 and later. All other jurisdictions, with few exceptions, are no longer subject to tax examinations in state, local or international jurisdictions for tax years before 2019.

The Company accounts for interest and penalties related to uncertain tax positions as a component of income tax expense.

The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025, and have included the following table as a result of our adoption, which presents income tax paid (net of refunds received) for the year ended December 31, 2025:

	2025
	(in millions)
U.S. federal	$	37.1
U.S. state and local (1)		15.9
Non-U.S.
Canada		6.4
China		3.8
Other non-U.S.		11.2
Total cash paid for taxes	$	74.4

(1) No U.S. state exceeds 5% of total cash paid for income taxes.

The amount of cash income taxes paid, net of refunds, during the years ended December 31, 2024 and 2023 was $117.2 million and $115.7 million, respectively.