v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Pre-tax income (loss) consisted of the following for the years ended December 31:
202520242023
Domestic $(34,858)$(20,095)$(1,017)
Foreign19,121 11,854 29,447 
Total$(15,737)$(8,241)$28,430 
The following table reconciles the income tax provision with the amount calculated using the 21.0% U.S. federal statutory rate applied to pretax income, reflecting the adoption of ASU 2023-09:
Year Ended December 31, 2025
Amount
Percent
U.S. Federal Statutory Tax Rate$(3,305)21.0 %
State and Local Income Tax, Net of Federal
21 (0.1)%
Foreign Tax Effects
 China
  Statutory Tax Rate Difference
153 (1.0)%
  Research and Development Credit(86)0.6 %
  Withholding Tax550 (3.5)%
  Other268 (1.7)%
 India
  Withholding Tax147 (0.9)%
  Other77 (0.5)%
 Mexico
  Statutory Tax Rate Difference
1,271 (8.1)%
  Other Adjustments, Nontaxable or Nondeductible Items
(1,224)7.8 %
 United Kingdom
  Other Adjustments
(324)2.1 %
 Other Foreign Jurisdictions274 (1.7)%
Tax Credits
 Research and Development Credit(731)4.7 %
Changes in Valuation Allowances7,310 (46.5)%
Nontaxable or Nondeductible Items
 Executive Compensation Limit374 (2.4)%
 Other Nontaxable or Nondeductible Items152 (1.0)%
 Other14 (0.1)%
Changes in Unrecognized Tax Benefits45 (0.3)%
Other Adjustments(246)1.6 %
Provision (benefit) for income taxes$4,740 (30.1)%
A reconciliation of income taxes computed at the statutory rates to the reported income tax provision for the years ended December 31 follows:
20242023
Federal provision (benefit) at statutory rate $(1,730)$5,970 
U.S./Foreign tax rate differential604 828 
Foreign non-deductible expenses376 (14)
Foreign tax provision311 821 
State taxes, net of federal benefit (337)(1)
State tax rate change, net of federal benefit72 (201)
Change in uncertain tax positions(343)209 
Change in valuation allowance28,769 (21,750)
Tax credits(1,738)(2,284)
Share-based compensation457 (30)
Executive compensation (IRC 162m)38 226 
Repatriation of foreign earnings1,237 435 
GILTI, net of related foreign tax credit— 142 
Other(223)446 
Provision (benefit) for income taxes$27,493 $(15,203)

The provision (benefit) for income taxes for the years ended December 31 follows:
202520242023
CurrentDeferredTotalCurrentDeferredTotalCurrentDeferredTotal
Federal $424 $— $424 $(289)$19,963 $19,674 $(2,157)$(18,166)$(20,323)
State and local 27 — 27 56 3,592 3,648 433 (3,355)(2,922)
Foreign3,784 505 4,289 3,685 486 4,171 7,220 822 8,042 
Total$4,235 $505 $4,740 $3,452 $24,041 $27,493 $5,496 $(20,699)$(15,203)
A summary of deferred income tax assets and liabilities as of December 31 follows:
20252024
Noncurrent deferred tax assets:
Amortization and fixed assets$5,271 $6,106 
Inventories2,224 2,893 
Pension obligations3,010 2,467 
Warranty obligations193 226 
Accrued benefits739 792 
Operating leases8,878 9,486 
Tax credit carryforwards9,347 8,612 
Net operating loss carryforwards23,032 18,233 
Other temporary differences12,233 8,883 
Total noncurrent deferred tax assets$64,927 $57,698 
Valuation allowance(41,777)(35,934)
Net noncurrent deferred tax assets$23,150 $21,764 
Noncurrent deferred tax liabilities:
Amortization and fixed assets$(1,104)$(1,132)
Inventories— (59)
Operating leases(9,615)(9,242)
Other temporary differences(1,228)(571)
Total noncurrent tax liabilities(11,947)(11,004)
Net noncurrent deferred tax liabilities$(11,947)$(11,004)
Total net deferred tax asset$11,203 $10,760 
Deferred taxes are reflected in the Consolidated Balance Sheet as follows:
Net non-current deferred tax assets$11,349 $11,084 
Non-current deferred tax liabilities (included in Other long-term liabilities)$(146)$(324)
Total net deferred tax asset$11,203 $10,760 

We assess whether valuation allowances should be established against deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. In making such judgments, the most weight is given to the cumulative three-year income (loss) position as it can be objectively verified. During 2023, the Company reversed the valuation allowance on its U.S. deferred tax assets of $22.0 million as the three-year cumulative income position was sufficient to overcome the weight of the negative evidence during the year ended December 31, 2023. During 2024, we recorded a valuation allowance of $26.6 million primarily related to establishing a full valuation allowance on our U.S. deferred tax assets due to the cumulative three-year loss position.

During 2025, we remained in a full valuation allowance position on our U.S. deferred tax assets due to the cumulative three-year loss position. We recorded an additional valuation allowance of $5.8 million primarily related to certain U.S. federal and state tax attribute carryforwards and interest expense carryforwards generated as a result of the limitation on business interest expense deductibility under Section 163(j) of the Internal Revenue Code. We expect to be able to realize the benefits of all of our deferred tax assets that are not currently offset by a valuation allowance, as discussed above. In the event that our actual results differ from our estimates or we adjust these estimates in future periods, the effects of these adjustments could materially impact our financial position and results of operations.
Activity for the years ended December 31 is as follows (in thousands):
202520242023
Balance - Beginning of the year$35,934 $9,340 $31,090 
Provisions5,843 26,594 297 
Utilizations and reversals— — (22,047)
Balance - End of the year$41,777 $35,934 $9,340 
As of December 31, 2025, the Company had net operating loss carryforwards of $145.8 million, of which $33.7 million related to foreign jurisdictions, $59.8 million related to U.S. Federal, and $52.3 million related to U.S. state jurisdictions, $5.2 million of U.S. foreign tax credit carryforwards, and $3.8 million of research and development tax credit carryforwards. The carryforward periods for these net operating losses range from five years to indefinite, foreign tax credits begin to expire in 2027, and research and development tax credits begin to expire in 2037. Utilization of these carryforwards is subject to the tax laws of the applicable tax jurisdiction and may be limited by the ability of certain subsidiaries to generate taxable income in the associated tax jurisdiction. As noted above, we recorded a full valuation allowance on all deferred tax assets that are not more likely than not able to be utilized before they expire.
As of December 31, 2025, cash of $33.0 million was held by foreign subsidiaries. During the year ended December 31, 2025, $12.1 million was repatriated from the Company's foreign subsidiaries. The Company had a $0.1 million deferred tax liability as of December 31, 2025 for the expected future income tax implications of repatriating cash from the foreign subsidiaries for which indefinite reinvestment is not expected.
Net income tax payments after the prospective adoption of ASU 2023-09, as described in Note 1, consisted of the following:
2025
United States - federal
$(2,275)
United States - state and local
(774)
International:
    Czech Republic
1,165 
 China1,159 
    Mexico
503 
    India
351 
    Thailand
247 
 Other foreign
(112)
Total income taxes paid, net of refunds
$264 
For the twelve months ended December, 31 2024 and 2023, cash paid for taxes, net of refunds received, were $8.4 million and $10.9 million, respectively.
We file federal income tax returns in the U.S. and income tax returns in various states and foreign jurisdictions. In the U.S., we are generally no longer subject to tax assessment for tax years prior to 2018. In our major non-U.S. jurisdictions including China, Czech Republic, Mexico and the United Kingdom, tax years are typically subject to examination for three to five years.
As of December 31, 2025, and 2024, we provided a liability of $1.0 million and $0.9 million, respectively, for unrecognized tax benefits associated with our U.S. federal and state, and foreign jurisdictions. The unrecognized tax benefits were recorded in Other long-term liabilities on the Consolidated Balance Sheets.
We accrue interest and penalties related to unrecognized tax benefits through income tax expense. We had $0.9 million and $0.8 million accrued for the payment of interest and penalties as of December 31, 2025 and December 31, 2024, respectively. Accrued interest and penalties are included in the $1.0 million of unrecognized tax benefits.
A reconciliation of the beginning and ending amount of unrecognized tax benefits (including interest and penalties) at December 31 follows:
202520242023
Balance - Beginning of the year $941 $1,338 $1,089 
Gross increase - tax positions in prior periods 154 154 60 
Gross decreases - tax positions in prior periods (68)— — 
Gross increases - current period tax positions — — 149 
Lapse of statute of limitations— (571)— 
Currency translation adjustment(40)20 40 
Balance - End of the year $987 $941 $1,338