Income taxes (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Income (Loss) from Continuing Operations Before Provision for Income Taxes

Income (loss) from continuing operations before provision for income taxes consisted of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2016			2015			2014
U.S.	$	23,006		$	15,480		$	17,532
Non-U.S.		(3,982	)		(6,973	)		(5,076	)
Income before income taxes	$	19,024		$	8,507		$	12,456

Schedule of Provision for Income Taxes on Continuing Operations

The provision for income taxes on continuing operations consists of the following:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2016		2015			2014
U.S.
Current	$	558	$	6,792		$	5,067
Deferred		9,296		(1,146	)		2,825
		9,854		5,646			7,892
Non-U.S.
Current		4,509		3,661			18,186
Deferred		1,164		1,542			(9,878	)
		5,673		5,203			8,308
Income tax expense	$	15,527	$	10,849		$	16,200

Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations

The rate reconciliation for continuing operations presented below is based on the U.S. federal income tax rate, rather than the Company’s country of domicile tax rate. The Company believes, given the large proportion of taxable income earned in the United States, such disclosure is more meaningful.

	2016						2015						2014
(U.S. Dollars, in thousands, except percentages)	Amount			Percent			Amount			Percent			Amount			Percent
Statutory U.S. federal income tax rate	$	6,658			35.0	%	$	2,978			35.0	%	$	4,360			35.0	%
State taxes, net of U.S. federal benefit		395			2.1			521			6.1			1,439			11.6
Foreign rate differential, including withholding taxes		(805	)		(4.2	)		(1,934	)		(22.7	)		2,386			19.1
Charges related to U.S. Government resolutions		2,050			10.8			—			—			—			—
Valuation allowances, net		6,149			32.3			10,952			128.7			8,672			69.6
Change in estimate on compensation expenses		(2,151	)		(11.3	)		—			—			—			—
Italian subsidiary intangible asset		(1,477	)		(7.8	)		(2,076	)		(24.4	)		(2,546	)		(20.4	)
Change of intention for foreign earnings		1,300			6.8			—			—			—			—
Domestic manufacturing deduction		—			—			(469	)		(5.5	)		(377	)		(3.0	)
Unrecognized tax benefits, net of settlements		3,049			16.0			406			4.8			1,370			11.0
Other, net		359			1.9			471			5.5			896			7.2
Income tax expense/effective rate	$	15,527			81.6	%	$	10,849			127.5	%	$	16,200			130.1	%

Schedule of Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities are as follows:

	December 31,
(U.S. Dollars, in thousands)	2016			2015
Intangible assets and goodwill	$	2,628		$	2,931
Inventories and related reserves		17,665			17,640
Deferred revenue and cost of goods sold		11,263			14,358
Other accruals and reserves		4,066			5,622
Accrued compensation		6,747			2,964
Allowance for doubtful accounts		2,898			2,863
Accrued interest		4,621			17,300
Net operating loss carryforwards		37,930			38,010
Other, net		3,032			3,379
		90,850			105,067
Valuation allowance		(41,701	)		(43,340	)
Deferred tax asset	$	49,149		$	61,727
Withholding taxes		(648	)		(253	)
Property, plant and equipment		(1,176	)		(4,168	)
Deferred tax liability		(1,824	)		(4,421	)
Net deferred tax assets	$	47,325		$	57,306

Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties)

A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2016, 2015, and 2014 follows:

(U.S. Dollars, in thousands)	2016			2015			2014
Balance as of January 1,	$	15,763		$	15,597		$	723
Additions for current year tax positions		77			332			14,794
Increases (decreases) for prior year tax positions		2,551			(86	)		145
Settlements of prior year tax positions		—			—			—
Expiration of statutes		(7	)		(80	)		(65	)
Balance as of December 31,	$	18,384		$	15,763		$	15,597