Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Provision for income taxes consisted of the following:

	Years ended December 31,
(in thousands)	2025		2024		2023
Income before income taxes:
U.S.	$	(114,505)	$	26,660	$	68,872
Non-U.S.	52,718		90,429		91,584
	$	(61,787)	$	117,089	$	160,456
Income tax expense/(benefit)
Current:
Federal	$	1,920	$	2,682	$	17,005
State	2,021		4,724		2,030
Non-U.S.	27,502		34,053		34,110
	$	31,443	$	41,459	$	53,145
Deferred:
Federal	$	(25,281)	$	1,699	$	(1,700)
State	(1,731)		(804)		863
Non-U.S.	(9,259)		(13,320)		(3,462)
	$	(36,271)	$	(12,425)	$	(4,299)
Total income tax expense	$	(4,828)	$	29,034	$	48,846

Cash payments for taxes in 2025 consisted of the following:

	Years ended December 31,
(in thousands)	2025
Income Taxes Paid:
Domestic
Federal	$	2,291
State	2,319
Foreign
Brazil	12,588
Canada	4,787
China	6,836
France	2,308
Mexico	8,166
Other	3,143
Total	$	42,438

Cash payments for taxes amounted to $47.3 million in 2024, and $54.5 million in 2023.

A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:

	Year Ended December 31, 2025
(in thousands)	Amount	Percent
U.S. federal statutory income tax rate	(12,976)	21.0	%
Domestic federal
Effect of changes in tax laws or rate enacted in the current period	—	—	%
Effect of cross-border tax laws
Subpart F income	552	(0.9)	%
Other	73	(0.1)	%
Tax credits
Research & Development Tax Credit	(1,004)	1.6	%
Foreign Tax Credit - Generation, Utilization, and Expiration	1,025	(1.7)	%
Other	(162)	0.3	%
Changes in valuation allowances	(1,486)	2.4	%
Nontaxable or nondeductible items
Officer's compensation	612	(1.0)	%
Other	(674)	1.1	%
Changes in unrecognized tax benefits	(581)	0.9	%
Other	(7)	—	%
State and Local Income Taxes, Net of Federal Tax Effect (a)	1,048	(1.7)	%
Foreign tax effects
Brazil
State and local (Social Contribution)	3,362	(5.4)	%
Foreign Rate Differential	1,500	(2.4)	%
Other	(371)	0.6	%
Canada
Foreign Rate Differential	(341)	0.6	%
Withholding tax	1,476	(2.4)	%
State and local (Quebec & Ontario)	545	(0.9)	%
Other	233	(0.4)	%
China
Foreign Rate Differential	677	(1.1)	%
Withholding tax	2,414	(3.9)	%
Other	(84)	0.1	%
Spain
State and local (Trade Tax)	(762)	1.2	%
Foreign Rate Differential	(630)	1.0	%
UK
Return to provision	(664)	1.1	%
Foreign Rate Differential	(157)	0.3	%
Other foreign jurisdictions
Foreign Rate Differential	796	(1.3)	%
Withholding tax	1,188	(1.9)	%
Other	(430)	0.7	%
Effective income tax rate	(4,828)	7.8	%

	Years ended December 31,
		2024		2023
U.S. federal statutory tax rate		21.0	%	21.0	%
State taxes, net of federal benefit		2.3		1.9
Non-U.S. local income taxes		2.3		1.4
U.S. permanent adjustments		0.6		0.8
Foreign permanent adjustments		1.0		0.7
Foreign rate differential		2.1		2.0
Net U.S. tax on non-U.S. earnings and foreign withholdings		2.8		5.1
Provision for/(resolution) of tax audits and contingencies, net		(1.3)		0.3
U.S. Pension Settlement - Release of Residual Tax Effect		—		—
Change in valuation allowances		4.4		(1.2)
Impact of Mexico net operating loss inflation revaluation		(2.2)		—
Establishment of deferred tax asset for Non-U.S. reserves		(4.3)		—
Impact of amended tax returns		(0.8)		—
Return to provision		(2.2)		(1.2)
Other adjustments		(0.9)		(0.4)
Effective income tax rate		24.8	%	30.4	%

In 2024, the Company also recorded new valuation allowances totaling $6.7 million and released a valuation allowance of $6.3 million in a non-U.S. jurisdiction due to positive evidence indicating that a full valuation allowance was no longer required. The remaining increase in valuation allowance is due to increases in deferred tax assets in entities that already had established valuation allowances.

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (OBBBA). The OBBBA retains the 21% corporate tax rate and makes permanent several tax provisions from the Tax Cuts and Jobs Act of 2017, including immediate expensing of domestic R&D, enhanced interest deductibility, and 100 percent bonus depreciation effective in 2025. Revisions to the international tax rules become effective in 2026. In the fourth quarter of 2025, we completed our assessment of the OBBBA, and the impacts were not material.

The Company has operations which constitute a taxable presence in 22 countries outside of the United States. The Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2019-2024. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years.

During the periods reported, income outside of the U.S. was heavily concentrated within Brazil (34% tax rate), and China (25% tax rate). As a result, the foreign income tax rate differential was primarily attributable to these tax rate differences.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of certain assets and liabilities for financial reporting purposes and income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

For the year ended December 31	U.S.				Non-U.S.
(in thousands)	2025		2024		2025		2024
Deferred tax assets:
Accounts receivable, net	$	667	$	502	$	1,466	$	1,138
Inventories	2,542		2,473		1,471		1,636
Incentive compensation	2,289		1,453		1,054		750
Property, plant, equipment and intangibles, net	—		—		—		—
Pension, post retirement benefits - non-current	6,388		6,440		4,832		2,202
Tax loss carryforwards	30		49		49,776		32,963
Tax credit carryforwards	3,935		3,602		238		29
Leases	13,149		12,192		2,500		2,205
Reserves	32,871		2,639		6,999		7,150
Deferred revenue	—		—		—		—
Other	749		373		239		909
Deferred tax assets before valuation allowance	62,769		29,723		68,575		48,982
Less: valuation allowance	(340)		(1,826)		(17,135)		(13,670)
Total deferred tax assets	$	62,429	$	27,897	$	51,440	$	35,312
Deferred tax liabilities:
Unrepatriated foreign earnings	$	5,744	$	4,961	$	—	$	—
Property, plant, equipment and intangibles, net	9,822		4,626		17,440		14,483
Basis difference in partner capital	989		1,420		—		—
Basis difference in investment	5,732		5,081		—		—
Derivatives	—		38		151		125
Leases	12,201		11,433		2,303		2,053
Deferred revenue	279		380		2,688		4,663
Other	(11,743)		—		(144)		—
Total deferred tax liabilities	23,024		27,939		22,438		21,324
Net deferred tax (liability)/asset	$	39,405	$	(42)	$	29,002	$	13,988

Deferred income tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income.

As of December 31, 2025, the Company's net operating loss, capital loss and tax credit carryforwards were as follows:

(in thousands)	Expiration Period	Net Operating and Capital Loss Carryforwards		Tax Credit Carryforwards
Jurisdiction
U.S. Federal	2026 - 2045	$	—	$	2,558
U.S. State	2035 - 2042	30		1,010
U.S. State	Indefinite	—		367
Non-U.S.	2026 - 2040	3,287		—
Non-U.S.	Indefinite	45,806		—
Balance at end of year		$	49,123	$	3,935

The Company records the residual U.S. and foreign taxes on certain amounts of foreign earnings that have been targeted for repatriation to the U.S. These amounts are not considered to be indefinitely reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. The Company has targeted for repatriation $122.2 million of current year and prior year earnings of the Company’s foreign operations. If these earnings were distributed, the Company would be subject to foreign withholding taxes of $5.2 million and U.S. income taxes of $1.3 million which have already been recorded.

The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. are intended to remain indefinitely invested in foreign operations.

No additional income taxes have been provided on the indefinitely invested foreign earnings at December 31, 2025. If these earnings were distributed, the Company could be subject to income taxes and additional foreign withholding taxes. Determining the amount of unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practical due to the complexities of the hypothetical calculation.

The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits. If recognized, the $2.3 million would impact the effective tax rate as of December 31, 2025 as follows:

(in thousands)	2025		2024		2023
Unrecognized tax benefits balance at January 1,	$	3,142	$	2,741	$	792
Increase in gross amounts of tax positions related to prior years	678		1,102		2,373
Decrease in gross amounts of tax positions related to prior years	—		(224)		—
Increase in gross amounts of tax positions related to current years			—		196
Decrease due to settlements with tax authorities	(1,714)		(460)		—
Increase (decrease) due to lapse in statute of limitations	—		116		(656)
Currency translation	206		(133)		36
Unrecognized tax benefits balance at December 31,	$	2,312	$	3,142	$	2,741

The Company recognizes interest and penalties related to unrecognized tax benefits within its global operations as a component of income tax expense. The Company recognized $0.2 million, $0.4 million and $0.5 million interest and penalties related to the unrecognized tax benefits noted above, for the years 2025, 2024 and 2023, respectively.