Income Taxes

3 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Note 9 – Income Taxes

Income tax expense consists of the following:

	Three Months Ended March 31,
(in thousands)	2026			2025
Income before income taxes	$	18,422		$	8,394
Income tax expense	$	5,399		$	4,750
Effective tax rate		29.3	%		56.6	%

The Company’s effective income tax rate was 29.3% and 56.6% for the three months ended March 31, 2026 and 2025, respectively, compared to the 21% U.S. federal statutory rate. The higher effective tax rates were primarily driven by losses in certain jurisdictions for which no tax benefit was recognized, the mix of profits in the Company's various jurisdictions, and the impact of the Organisation for Economic Co-operation and Development (“OECD”) Pillar Two Global Minimum Tax. Losses in jurisdictions for which no tax benefit could be recognized were higher in the three months ended March 31, 2025, primarily due to the settlement of an indirect tax assessment recorded during the period. These impacts were partially offset by tax incentives available in certain foreign jurisdictions.

The Company has been granted certain tax incentives, including tax holidays, for its subsidiaries in Thailand and China. These incentives expire at various dates, unless extended or otherwise renegotiated, and are subject to certain conditions with which the Company expects to comply. Tax incentives in Thailand expire at various dates through December 31, 2030. In the fourth quarter of 2024, the Company was awarded a China tax holiday retroactive to January 1, 2024 through December 31, 2026, which reduces the statutory tax rate from 25% to 15%. The net impact of these tax incentives reduced foreign income tax expense by approximately $1.2 million (approximately $0.03 per diluted share) and $1.5 million (approximately $0.04 per diluted share) for the three months ended March 31, 2026 and 2025, respectively.

A summary of the Company’s tax incentives follows:

	Three Months Ended March 31,
(in thousands)	2026		2025
Thailand	$	877	$	1,087
China		278		458
Total tax incentives	$	1,155	$	1,545

Determining the consolidated income tax expense, income tax liabilities and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which requires estimating current tax exposures and making judgments regarding the recoverability of deferred tax assets in each jurisdiction. Actual results may differ from these estimates, which could have a significant impact on operating results in future periods.