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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income (loss) before income taxes, consisted of the following for the years set forth below (amounts in thousands):
 202520242023
Domestic$(58,609)$(32,410)$20,809 
Foreign47,311 40,681 88,939 
 $(11,298)$8,271 $109,748 

The income tax provision (benefit) was as follows for the years set forth below (amounts in thousands):
 202520242023
Current   
Federal$997 $372 $(217)
State(396)(442)1,341 
Foreign18,301 18,289 26,999 
 18,902 18,219 28,123 
Deferred   
Federal13,174 (1,290)(2,513)
State10,558 (1,896)1,186 
Foreign7,257 (3,172)(754)
 30,989 (6,358)(2,081)
Income tax provision$49,891 $11,861 $26,042 
For the years ended December 31, 2025, the income tax provision differs from the amount of income tax determined by applying the statutory U.S. federal income tax rate to pre-tax income (loss) as a result of the following:
 2025
AmountETR%
U.S. Federal Statutory Tax Rate$(2,373)21.0 %
Effect of Cross-Border Tax Laws
Sub F, net2,451 (21.7)%
Foreign Branch Income2,565 (22.7)%
Other248 (2.2)%
Tax Credits
          Foreign tax credit expiration2,318 (20.5)%
Other(187)1.7 %
Nontaxable or Nondeductible Items
Executive Compensation - Nondeductible831 (7.4)%
Other914 (8.1)%
Change in Valuation Allowance17,904 (158.5)%
Other
Restructuring(1,298)11.5 %
Other681 (6.0)%
State & Local Income Taxes, Net of Federal Benefit (1)10,245 (90.7)%
Foreign Tax Effects
Argentina
Transaction Gains or Losses879 (7.8)%
Other(695)6.2 %
Brazil
Foreign Rate Differential1,025 (9.1)%
Withholding Tax1,407 (12.5)%
Other(274)2.4 %
Italy
Withholding Tax1,270 (11.2)%
Other26 (0.23)%
Luxembourg
Subnational Tax2,562 (22.7)%
Valuation Allowance9,810 (86.8)%
Other(3,926)34.8 %
Other Foreign Jurisdictions4,027 (35.6)%
Worldwide Changes in Unrecognized Tax Benefits(519)4.6 %
Grand Total$49,891 (441.6)%

(1) During the year December 31, 2025, state taxes in Illinois comprised greater than 50% of the tax effect in this category. This includes the valuation allowance for state income taxes of $12.4 million.
For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, a reconciliation of income taxes at the U.S. statutory rate to United States and Foreign Tax Expense for the years then ended is as follows:

 20242023
Statutory U.S. federal tax rate21.0 %21.0 %
Unrecognized tax positions7.3 — 
Foreign tax rate and income differential128.4 9.6 
Valuation allowance(100.3)(3.5)
State taxes, net(18.0)1.2 
Nondeductible royalty— 0.8 
Federal Benefit of Notice 2023-55— (5.2)
Expired Tax Credits69.5 — 
Equity based compensation1.1 — 
Return to provision25.4 0.2 
Transaction costs9.5 — 
Other, net(0.5)(0.4)
Effective tax rate143.4 %23.7 %

The effective tax rate for the year ended December 31, 2025, was (441.6)% compared to 143.4% for the year ended December 31, 2024. The effective rate for 2025 was negatively affected by the increase in valuation allowance at the United States, which resulted in $30.1 million of tax expense. This increase is reflected in both the domestic valuation allowance line and a portion of the state and Local Income Taxes, Net of Federal Benefit. A change in the valuation assertion for Luxembourg resulted in an additional $9.8 million of tax expense, between the national and subnational levels. After giving consideration to these items, the effective tax rate for 2025 of (441.6)% was lower than the 21% U.S. federal statutory rate.

In jurisdictions where the Company operates, management continues to monitor the realizability of the deferred tax assets arising from losses in its cyclical business, taking into account multiple factors. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company continues to record a valuation allowance in several major jurisdictions, including the U.S., Italy, and Luxembourg as these amounts remain more likely than not that the deferred tax assets would not be realized. As of December 31, 2025, the Company has established a full valuation allowance of $63.6 million on its domestic deferred tax assets and most of its state deferred tax assets, and a valuation allowance of $31.4 million on most of its Luxembourg national and state deferred tax assets. The U.S. valuation allowance was established during 2025 due to net operating losses generated and a three-year cumulative loss position expected in the next twelve months. The Luxembourg valuation allowance was established during 2025 due to expected reduction of future income from intercompany loans. This resulted in sufficient negative evidence when evaluating the realizability of deferred tax assets during 2025. The Company did not release a valuation allowance in 2024 and released a valuation allowance of $0.6 million on the net deferred tax asset in 2023. The valuation of deferred tax assets requires judgment in assessing future profitability by year, including the impact of tax planning strategies, relative to the expiration dates, if any, of the assets.

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 tax assets and liabilities at December 31, 2025 and 2024, were as follows (amounts in thousands):
 20252024
Deferred tax assets:  
Net operating loss carryforwards$124,640 $101,771 
Inventory12,272 8,385 
Warranty6,844 6,347 
Employee benefits and related costs8,001 8,352 
Prepaid royalties410 1,006 
Interest limitation33,608 28,834 
Lease liability30,323 5,138 
Intangible assets12,463 4,732 
Foreign Tax Credit— 2,318 
Other8,296 7,401 
Deferred tax assets236,857 174,284 
Deferred tax liabilities:  
Fixed assets(30,765)(13,939)
Lease assets(28,958)(5,181)
Pension(7,677)(6,060)
Other(3,529)(7,292)
Deferred tax liabilities(70,929)(32,472)
Subtotal165,928 141,812 
Valuation allowance(161,351)(106,496)
Net deferred tax asset$4,577 $35,316 
As of December 31, 2025 and 2024, certain net tax loss carryforwards of $124.6 million and $101.8 million were available with $2.2 million expiring between 2025 and 2030 and $122.4 million expiring after 2030. At December 31, 2025, a valuation allowance of $161.4 million has been established. The net change in the valuation allowance was $54.9 million and $(13.0) million for 2025 and 2024, respectively. The majority of the valuation allowance is related to deferred tax assets in the U.S., Italy, and Luxembourg.

As of December 31, 2025, the Company has $97 million of gross federal net operating loss carryforward, a portion of which expires starting in 2035 and a portion of which does not expire. Additionally, the Company has $344.8 million of gross state net operating losses and $353.3 million of gross foreign loss carryforwards.

As of December 31, 2025, the Company did not record income taxes on undistributed earnings of foreign subsidiaries because those earnings were indefinitely reinvested. Determining the unrecognized deferred tax liability on those unremitted earnings is not practicable because of the complexity of the hypothetical calculation and the inherent uncertainty regarding the timing and manner of any potential future repatriation. If such earnings were to be distributed, the Company could be subject to additional U.S. federal and state income taxes, foreign withholding taxes, and other tax consequences.

The Company is involved in various tax matters, for some of which the outcome is uncertain. The Company believes that it has adequate tax reserves to address these open tax matters acknowledging that the outcome and timing of these events are uncertain.

The Company or one of its subsidiaries files income tax returns in the U.S., Federal and State, and various foreign jurisdictions. The Company's major locations are in the U.S. Brazil, and Italy. Income tax years are open from 2022-2025 in the U.S., from 2019-2025 in Brazil, and from 2019-2025 in Italy.

At December 31, 2025, 2024, and 2023, the unrecognized tax benefits were $0.7 million, $1.2 million, and $0.0 million, respectively. As of December 31, 2025, $0.7 million of unrecognized tax benefits would have affected income tax expense if the tax benefits were recognized.
A reconciliation of the total amounts of unrecognized tax benefits at December 31 were as follows (amounts in thousands):
202520242023
Balance at January 1$3,079 $23 $30 
     Increases to tax positions taken during the prior years3,912 3,341 — 
     Decreases to tax positions taken during prior years(81)— — 
     Decreases due to lapse of statutes of limitations(549)— (7)
     Settlements— (273)— 
     Foreign exchange291 (12)— 
Balance at December 31$6,652 $3,079 $23 

The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense. There were no amount of interest and penalties related to unrecognized tax benefits recorded in income tax expense at December 31, 2025, 2024 and 2023, respectively.

Pillar II
The Organization for Economic Co-operation and Development (the “OECD”) has issued various proposals that would change long-standing global tax principles. These proposals include a two-pillar approach to global taxation (BEPS 2.0/ Pillar Two), focusing on global profit allocation and a global minimum tax rate. On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%, which became effective January 2024. Through the end of 2025, a number of the countries involved have enacted portions, or all, of Pillar Two into their local laws. Pillar Two did not have a material impact to the consolidated financial statements for the year ended December 31, 2025.

Brazilian Tax Credits
In June 2021, the Company’s Brazilian subsidiaries received a notice that they had prevailed on an existing legal claim in regards to certain non-income (indirect) taxes that had been previously charged and paid. The matter specifically relates to companies’ rights to exclude the state tax on goods circulation (a value-added-tax or VAT equivalent, known in Brazil as “ICMS”) from the calculation of certain additional indirect taxes (specifically the program of social integration (“PIS”) and contribution for financing of social security (“COFINS”) levied by the Brazilian States on the sale of goods.

During the second quarter of 2023, one of the Company’s Brazilian subsidiaries received a notice that they had prevailed on an additional legal claim in regards to the non-income (indirect) taxes credits that had been granted in a prior year ruling. The most recent ruling exempted from taxes, the interest benefit on the indirect tax credits granted in prior year. For the year ended December 31, 2023, the Company recorded indirect tax credits of $0.5 million within other income in the consolidated statements of operations. The Company also recorded a $2.6 million benefit within the provision for income taxes in the consolidated statements of operations for the year ended December 31, 2023.

Income Taxes Paid
In accordance with the adoption of ASU 2023-09, below is a summary of income taxes paid, net of refunds received, by jurisdiction for the year ended December 31, 2025:
2025
US Federal and State and Local
   Other$(778)
(778)
Foreign
   Brazil5,447 
   China2,210 
   Germany - Federal1,636 
   Italy1,256 
   Russia3,210 
   Spain3,319 
   Turkey1,134 
   Other3,052 
21,264 
Total$20,486 

For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, net cash payments for income taxes were $20.4 million and $21.8 million, respectively.