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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of (loss) income before income taxes and equity in losses are as follows:
 Year Ended December 31,
 202520242023
 (in thousands)
Domestic$(19,349)$16,509 $22,134 
Foreign(10,871)(12,099)(11,659)
Foreign - loss on equity securities
— (14,152)— 
Total (loss) income before income taxes and equity in losses
$(30,220)$(9,742)$10,475 
The (benefit) provision for income taxes (before equity in losses) consists of:
Year Ended December 31,
202520242023
(in thousands)
Current:
Federal$(32)$4,254 $6,326 
State and local390 913 1,447 
Foreign364 203 579 
Deferred(4,005)(2,039)(2,130)
Income tax (benefit) provision
$(3,283)$3,331 $6,222 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred income tax assets and (liabilities) are as follows:
 December 31,
 20252024
 (in thousands)
Deferred income tax assets:
Operating lease liabilities$13,903 $17,257 
Stock options858 819 
Inventory2,251 2,573 
Operating loss carryforwards29,383 23,262 
Accounts receivable allowances1,929 2,473 
Accrued compensation989 979 
Deferred compensation458 448 
Environmental remediation accrual1,274 1,331 
Capitalized research and experimental expenditures481 3,881 
Section 163j interest carryforward
2,929 2,458 
Fixed assets
214 — 
U.S Federal Tax Credits
1,137 575 
Other2,068 1,396 
Total deferred income tax assets$57,874 $57,452 
Deferred income tax liabilities:
Operating lease right-of-use assets$(11,511)$(14,243)
Fixed assets— (304)
Intangibles(19,268)(26,814)
Total deferred income tax liabilities(30,779)(41,361)
Net deferred income tax asset
27,095 16,091 
Valuation allowance(28,649)(21,692)
Net deferred income tax liability
$(1,554)$(5,601)
As of December 31, 2025, the Company has $7.6 million of capital loss carryforwards in foreign jurisdictions. These losses can be carried forward indefinitely and are fully offset by a valuation allowance.
At December 31, 2025, the Company has net operating losses in foreign jurisdictions of $102.5 million and $11.6 million in state jurisdictions that are fully offset by valuation allowance, and $5.9 million in the U.S. federal jurisdiction, $2.4 million in foreign jurisdictions, and $1.1 million in state jurisdictions that are not offset by valuation allowance. Approximately $104.5 million of foreign net operating losses, $0.1 million of state net operating losses, and $5.9 million of U.S. federal net operating losses can be carried forward indefinitely. The remaining foreign net operating losses, if not utilized, will expire beginning in 2028. The remaining state net operating losses will begin to expire in 2026.
The (benefit) provision for income taxes (before equity in losses) differs from the amounts computed by applying the applicable federal statutory rates as follows:
Year Ended December 31,
202520242023
 (in thousands, except percentages)Tax effectRate impactTax effectRate impactTax effectRate impact
United States Statutory Tax Rate$(6,346)21.00 %$(2,046)21.00 %$2,200 21.00 %
State and Local Income Taxes, Net of Federal Income Tax Effect(1)
(561)1.86 340 (3.49)598 5.71 
Foreign Tax Effects
China
Adjustment of deferred tax liabilities5 (0.02)1 (0.01)150 1.43 
Other(5)0.02 13 (0.14)(10)(0.10)
Hong Kong
Foreign rate Differential(17)0.06 151 (1.55)87 0.83 
Other141 (0.47)(5)0.05 39 0.37 
Jersey
Foreign rate Differential— — (336)3.44 (326)(3.12)
Other— — — — — — 
Mexico
Book Loss on GV Investment— — 2,973 (30.51)— — 
Other31 (0.10)27 (0.28)10 0.10 
Netherlands
Adjustment of deferred tax liabilities(32)0.11 256 (2.63)16 0.16 
Change in Valuation Allowance— — (778)7.98 (42)(0.40)
Reverse 2022 TP Adjustment— — — — 111 1.06 
Other(6)0.02 (4)0.04 4 0.04 
United Kingdom
Adjustment of deferred tax liabilities(901)2.98 (195)2.00 (186)(1.77)
Change in Valuation Allowance3,526 (11.67)2,821 (28.96)3,064 29.25 
Foreign rate Differential(420)1.39 (420)4.31 (461)(4.40)
Other Disallowed Interest— — 336 (3.44)326 3.12 
Other17 (0.06)101 (1.03)(90)(0.86)
Other foreign jurisdictions264 (0.87)(62)0.64 (55)(0.52)
Effect of Changes in Tax Laws or Rates Enacted in the Current Period— — — — — — 
Effect of Cross-Border Tax Laws
Foreign Tax Withholding346 (1.15)170 (1.75)527 5.03 
Other13 (0.04)31 (0.32)37 0.35 
Tax Credits
R&D CREDIT(317)1.05 (290)2.98 (266)(2.54)
Foreign Tax Credit(245)0.81 (161)1.66 (522)(4.98)
Changes in Valuation Allowances978 (3.24)(151)1.55 (16)(0.16)
Nontaxable or Nondeductible items
FDII
— — (56)0.58 (132)(1.26)
Non-deductible Officer's Compensation
104 (0.34)653 (6.70)476 4.55 
Other76 (0.25)83 (0.85)77 0.74 
Changes in Unrecognized Tax Benefits(22)0.07 (747)7.67 (97)(0.93)
Other Adjustments
Adjustment of deferred tax liabilities111 (0.37)911 (9.35)839 8.01 
Return to Provision56 (0.19)(285)2.91 (136)(1.31)
Other
(79)0.30 — — — — 
Effective Tax Rate$(3,283)10.90 %$3,331 (34.20)%$6,222 59.40 %
(1) State taxes in CA and NJ made up the majority (greater than 50 percent) of the tax effect in this category.
The estimated values of the Company’s gross uncertain tax positions at December 31, 2025, 2024 and 2023 consist of the following:
Year Ended December 31,
202520242023
(in thousands)
Balance at January 1$(457)$(990)$(1,130)
Additions based on tax positions related to the current year(37)(27)(27)
Reductions for tax position of prior years78 560 167 
Balance at December 31$(416)$(457)$(990)
The Company had approximately $0.2 million and $0.2 million, net of federal and state tax benefit, accrued at December 31, 2025 and 2024, respectively, for the payment of interest and penalties. The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes.
If the Company’s tax positions are ultimately sustained, the Company’s liability, including interest, would be reduced by $0.7 million, all of which would impact the Company’s tax provision. On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly.
The Company is no longer subject to U.S. Federal income tax examinations for the years prior to 2022. The Company has identified the following jurisdictions as “major” tax jurisdictions: U.S. Federal, California, New Jersey, New York, and the United Kingdom. At December 31, 2025, the periods subject to examination by the Company’s major state jurisdictions are generally for the years ended 2021 through 2024. In certain jurisdictions, Filament, an acquired entity, may have additional periods subject to examination. As of December 31, 2025, there are no material assessments in any given year.
The following table presents cash paid for taxes (net of refunds) by jurisdiction for the year ended December 31, 2025:
Year Ended December 31,
2025
(in thousands)
Federal taxes
United States$2,185 
State
Other state jurisdictions600 
Foreign
Canada274 
Other foreign jurisdictions114 
$3,173 
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant changes to U.S. corporate tax provisions of the Tax Cuts and Jobs Act. Notably, it allows an immediate deduction for domestic research and development expenditures, reinstates 100% bonus depreciation, decreases the limitation on deductible interest expense, and modifies the international tax framework. The legislation has multiple effective dates, with certain provisions effective starting in 2025 and others in the subsequent years. The Company was able to reduce their cash tax expense in the year ended December 31, 2025 from the changes implemented in OBBBA by utilizing the allowable acceleration of deductions for depreciation and domestic capitalized R&D expenses, as well as the increased deduction for interest expense, which reduced federal taxable income in the year.