Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 consists of the following:

	2022		2021		2020
Current tax expense (benefit):
Federal	$	98	$	(97)	$	(729)
State	1,582		609		86
Foreign	14,082		7,046		6,963
	15,762		7,558		6,320
Deferred income tax expense (benefit):
Federal	(4,096)		3,466		(12,253)
State	(1,636)		1,449		(1,173)
Foreign	(310)		(1,910)		(808)
	(6,042)		3,005		(14,234)
Provision (benefit) for income taxes	$	9,720	$	10,563	$	(7,914)

A reconciliation between income taxes computed at the statutory federal rate and the provision (benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 follows:

	2022		2021		2020
Tax provision at statutory rate based on income before income taxes	21.0	%	21.0	%	21.0	%
Stock-based compensation	1.5		(9.4)		(267.7)
Federal research credit	2.4		(2.3)		(124.2)
Valuation allowance	2.5		(2.2)		49.7
Settlement of taxing authority examinations	—		—		(122.9)
Non-deductible premium on extinguishment and change in fair value of convertible notes	(32.2)		—		—
Non-deductible/non-taxable items	(2.9)		0.8		28.6
US tax on worldwide earnings at different rates	(1.8)		(0.4)		(123.7)
Foreign income taxes	(1.8)		3.1		79.9
State income taxes, net of federal tax benefit	(1.4)		3.7		(24.5)
Other, net	(1.0)		0.1		(10.1)
	(13.7)	%	14.4	%	(493.9)	%

The Company has elected to account for Global Intangible Low Tax Income ("GILTI") using the period cost method. The net impact of GILTI including the allowable GILTI deduction is presented in the rate reconciliation as a component of “US tax on worldwide earnings at different rates”.

The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2022 and 2021 are as follows:

	2022		2021
Assets:
Inventory	$	2,939	$	4,694
Net operating losses	12,721		18,383
Capitalized research and development	11,402		4,173
Deferred compensation	3,012		2,563
Accounts receivable	3,580		3,147
Compensation and benefits	8,723		6,583
Accrued pension	2,530		3,930
Research and development credit	16,785		15,542
Interest limitation	9,116		—
Convertible notes hedge	36,204		4,869
Lease liabilities	2,735		3,573
Other	4,134		5,741
Less: valuation allowances	(543)		(786)
	113,338		72,412
Liabilities:
Goodwill and intangible assets	152,155		106,065
Depreciation	2,373		2,546
State taxes	11,733		11,833
Unremitted foreign earnings	1,573		2,449
Convertible notes debt discount	—		4,915
Lease right-of-use assets	2,579		3,484
	170,413		131,292
Net liability	$	(57,075)	$	(58,880)

    Income (loss) before income taxes consists of the following U.S. and foreign income (loss):

	2022		2021		2020
U.S. income (loss)	$	(96,114)	$	45,260	$	(16,026)
Foreign income	25,252		27,845		17,629
Total income (loss)	$	(70,862)	$	73,105	$	1,603

As of December 31, 2022, the amount of federal net operating loss carryforward was $11.0 million and begins to expire in 2027. As of December 31, 2022, the amount of federal research credit carryforward available was $16.8 million.  These credits begin to expire in 2027.  

We have accrued tax liabilities related to the amount of unremitted earnings at December 31, 2017 and certain subsequent unremitted earnings as these are not considered permanently reinvested.  Deferred taxes have not been accrued on unremitted earnings subsequent to December 31, 2017 that are considered permanently reinvested. The amount of such untaxed foreign earnings for the periods occurring after December 2017 totaled $28.7 million. If we were to repatriate these funds, we would be required to accrue and pay taxes on such amounts. The Company has estimated foreign withholding taxes of $1.4 million would be due if these earnings were repatriated.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2019.

We recognize tax liabilities in accordance with the provisions for accounting for uncertainty in income taxes. Such guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:

	2022		2021		2020
Balance as of January 1,	$	200	$	200	$	2,170
Increases for positions taken in current periods	—		—		—
Decreases in unrecorded tax positions related to settlement with the taxing authorities	—		—		(1,970)
Decreases in unrecorded tax positions related to lapse of statute of limitations	—		—		—
Balance as of December 31,	$	200	$	200	$	200

If the total unrecognized tax benefits of $0.2 million at December 31, 2022 were recognized, it would reduce our annual effective tax rate.  The amount of interest accrued in 2020, 2021 and 2022 related to these unrecognized tax benefits was not material and is included in the provision (benefit) for income taxes in the consolidated statements of comprehensive income (loss).