Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12 - INCOME TAXES

Income (loss) before income taxes from domestic and international jurisdictions is comprised of the following:

Year Ended December 31,	2024			2023
Income (loss) before income taxes:
Domestic	$	(47,552	)	$	(65,847	)
Foreign		(5,129	)		(50,951	)
	$	(52,681	)	$	(116,798	)

The income tax (provision) benefit is comprised of the following:

Year Ended December 31,	2024			2023
Current taxes
Federal	$	2,819		$	(548	)
State		(159	)		(112	)
Foreign		(6,049	)		(1,915	)
Total current taxes		(3,389	)		(2,575	)
Deferred taxes
Federal		(23,113	)		20,057
State		(462	)		7,028
Foreign		1,463			(564	)
Total deferred taxes		(22,112	)		26,521
Income tax (provision) benefit	$	(25,501	)	$	23,946

The following is a reconciliation of the U.S. federal tax rate to the Company's effective income tax rate:

Year Ended December 31,	2024			2023
Statutory rate		21.0	%		21.0	%
State tax provisions, net of federal income tax benefit		0.4			1.1
Tax credits		13.4			6.3
Foreign income taxes at rates other than the statutory rate		3.7			16.4
Valuation allowance		(52.2	)		5.9
Changes in tax liabilities, net		10.3			(0.2	)
Share based compensation		(3.7	)		(1.4	)
Unremitted non-U.S. Earnings		0.1			2.4
US tax on non-US income		(39.6	)		(6.7	)
Loss on deconsolidation of subsidiary		—			(20.1	)
Non-deductible charges		(4.2	)		(1.6	)
Other		2.4			(2.6	)
Effective income tax rate		(48.4	)%		20.5	%

The 2024 effective tax rate is based on income tax provision and pre-tax loss. The 2023 effective tax rate is based on income tax benefit and pre-tax loss.

Tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

Year Ended December 31,	2024			2023
Deferred income tax assets:
Accrued liabilities	$	4,360		$	7,115
Hedging and foreign currency gains (losses)		—			(1,030	)
Deferred compensation		6,411			7,270
Inventory reserves		205			1,864
Net loss carryforwards and credits		38,284			46,301
Interest carryforwards		56,202			35,633
Intangibles, property, plant and equipment and other		11,564			10,272
Competent authority deferred tax assets and    other foreign timing differences		3,738			5,041
Other		8,898			730
Total before valuation allowance		129,662			113,196
Valuation allowance		(87,874	)		(60,387	)
Net deferred income tax assets		41,788			52,809
Deferred income tax liabilities:
Hedging and foreign currency gains (losses)		(1,498	)		—
Intangibles, property, plant and equipment and other		—			—
Unremitted earnings		(2,349	)		(2,499	)
Deferred income tax liabilities		(3,847	)		(2,499	)
Net deferred income tax assets	$	37,941		$	50,310

The classification of the Company's net deferred tax asset is shown below:

Year Ended December 31,	2024			2023
Long-term deferred income tax assets	$	39,046		$	52,213
Long-term deferred income tax liabilities		(1,105	)		(1,903	)
Net deferred tax asset	$	37,941		$	50,310

As of December 31, 2024, the Company has cumulative tax effected Germany NOL carryforwards of $32.7 million that carryforward indefinitely and U.S. state NOL carryforwards of $8.8 million that expire in the years 2025 to 2044. Also, the Company has $13.6 million of U.S. tax credit carryforwards, $3.2 million that expire in the years 2036 to 2044 and $10.4 million expiring in the years 2029 to 2034.

As of December 31, 2022, substantially all U.S. and German deferred tax assets net of deferred tax liabilities, were subject to valuation allowances. The Company had previously concluded that if financial results continued to improve, the assessment of the realization of net deferred tax assets could result in the release of some or all of the valuation allowances. As of December 31, 2023, sufficient positive evidence became available and $24.8 million of the valuation allowances against U.S. net deferred tax assets were released. As of December 31, 2024, certain U.S. and substantially all German deferred tax assets net of deferred tax liabilities, remained subject to valuation allowances.

The transition tax substantially eliminated the basis difference on foreign subsidiaries that existed previously for purposes of Accounting Standards Codification topic 740 (“ASC 740”). However, there are limited other taxes that could continue to apply such as foreign withholding and certain state taxes. Provisions are made for income tax liabilities on the undistributed earnings of non-U.S. subsidiaries.

In addition, the Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world are enacting legislation. As currently designed, Pillar Two will ultimately apply to the Company's worldwide operations, however, there has been no material effect on December 31, 2024. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential effects.

A reconciliation of the beginning and ending amounts of uncertain tax positions is as follows:

Year Ended December 31,	2024			2023
Beginning balance	$	30,549		$	26,100
Increases (decreases) due to foreign currency translations		(1,416	)		640
Increases (decreases) as a result of positions taken during:
Prior periods		(356	)		3,274
Current period		—			776
Settlements with taxing authorities		(14,658	)		(21	)
Expiration of applicable statutes of limitation		(405	)		(220	)
Ending balance	$	13,714		$	30,549

The Company's policy regarding interest and penalties related to uncertain tax positions is to record interest and penalties as an element of income tax expense. At the end of 2024 and 2023, the Company had liabilities of $3.8 million and $5.7 million of potential interest and penalties associated with uncertain tax positions. Included in the unrecognized tax benefits is $1.3 million that, if recognized, would favorably affect the annual effective tax rate. Within the next 12-month period the Company expects a decrease in unrecognized tax benefits as uncertain tax positions continue to expire.

Income tax returns are filed in multiple jurisdictions and are subject to examination by tax authorities in various jurisdictions where the Company operates, including open tax years from 2014 to 2023.