Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
19. Income Taxes:
Income before income taxes within or outside the United States are shown below:
Years ended December 31,
2024 2023 2022
Domestic $ (17,186) $ 73,774  $ 86,695 
Foreign 12,164  8,165  8,040 
Total $ (5,022) $ 81,939  $ 94,735 
The provision for income taxes as shown in the accompanying consolidated statements of income consists of the following:
Years ended December 31,
2024 2023 2022
Current:  
Federal $ 6,044  $ 21,647  $ 18,210 
State 2,691  3,695  3,100 
Foreign 822  2,515  1,978 
9,557  27,857  23,288 
Deferred:
Federal $ (7,053) $ (3,644) $ 4,544 
State (2,747) (11,993) (2,288)
Foreign 1,873  (1,435) (604)
(7,927) (17,072) 1,652 
Provision for income taxes $ 1,630  $ 10,785  $ 24,940 
A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax expense is as follows:

Years ended December 31,
2024 2023 2022
Tax at statutory rate $ (1,055) $ 17,207  $ 19,894 
State income taxes, net of federal income tax benefit 183  748  248 
Changes in uncertain tax positions (9,413) 985  558 
State credit - valuation allowance release —  (10,203) — 
Rate changes —  (101) — 
Stock compensation 427  1,803  1,876 
Compensation disallowance under 162(m) 148  2,344  3,146 
Foreign tax credits (900) (848) — 
Impairment of investment in affiliated companies 13,272  —  — 
Research and development tax credits (600) (400) (366)
Other, net (432) (750) (416)
Provision for income taxes $ 1,630  $ 10,785  $ 24,940 
For the year ended December 31, 2024, certain components of the rate reconciliation have been aggregated within “Other, net” in the income tax rate reconciliation table, including the tax related to the US Foreign inclusion provisions, the effect of rates different than statutory, return-to-provision tax impact and a few immaterial items, as the impact of the $65,000 impairment to the investment in affiliated companies to the Company’s pre-tax book income (loss) resulted in a significantly reduced pre-tax book income (loss) for the year ended December 31, 2024.
Deferred tax assets (liabilities) are comprised of the following:
December 31,
2024 2023
Deferred tax assets:
Net operating loss carryforwards $ 13,820  $ 14,680 
Interest disallowance carryforward 2,968  1,169 
Pension 288  569 
Operating lease liability 8,281  5,940 
Other 18,367  10,806 
State credits 14,359  14,659 
Foreign withholding tax credits 9,083  9,083 
Total deferred tax assets, gross 67,166  56,906 
Valuation allowance (16,824) (18,325)
Total deferred tax assets, net 50,342  38,581 
Deferred tax liabilities:
Depreciation $ (68,361) $ (66,816)
Inventory (3,306) (3,427)
Intangibles (69,953) (67,250)
Operating lease right-of-use assets (8,307) (5,954)
Other (5,452) (8,675)
Total deferred tax liabilities (155,379) (152,122)
Net deferred tax liabilities $ (105,037) $ (113,541)
Under the tax laws of various jurisdictions in which we operate, deductions or credits that cannot be fully utilized for tax purposes during the year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future year. As of December 31, 2024, the Company has indefinite carryforwards of $9,083 foreign withholding tax credits. The Company has recorded a full valuation allowance against the foreign withholding tax credits as it is more likely than not that the benefit from these foreign tax credits will never be realized. The Company has $14,359 of deferred tax assets related to state tax credits, which are subject to a 16-year carryforward period. The Company expects to fully utilize its state tax credits before each expiration. As of December 31, 2024, the valuation allowance associated with its state tax credits was zero. The Company has $13,820 of deferred tax assets related to state net operating losses and foreign losses, which are subject to various carryforward periods of 5 to 20 years or an indefinite carryforward period. A partial valuation allowance of $7,741 has been recorded due to the expected expiration of these state and foreign net operating losses before they are able to be utilized.
The change in net deferred tax liabilities for the years ended December 31, 2024 and 2023 was primarily related to differences between book and tax basis depreciation, activity connected to book amortization of intangible assets with no corresponding tax basis reducing those deferred tax liabilities, activity with respect to tax deductible goodwill, activity with respect to interest rate caps recorded against other comprehensive income, activity with respect to the interest disallowance carryforward, activity with respect to the capitalization and related amortization of research and experimentation costs and activity with respect to the investment in the Zeolyst Joint Venture.
The net change in the total valuation allowance was a decrease of $1,501 in 2024. The valuation allowance at December 31, 2024 was related to state and foreign net operating loss carryforwards and foreign withholding tax credits that, in the judgment of management, are not more likely than not to be realized. In assessing the ability to realize deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies that are prudent in making this assessment. In order to fully realize deferred tax assets, the Company will need to generate future taxable income prior to the expiration of the net operating loss and credit carryforwards. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.
The cumulative unremitted earnings of foreign subsidiaries outside the United States are considered permanently reinvested, for which no withholding taxes have been provided. Such earnings are expected to be reinvested indefinitely and, as a result, no deferred tax liability has been recognized with regard to such earnings. Determination of the deferred withholding tax liability on these unremitted earnings is not practicable. Undistributed earnings of foreign subsidiaries and related companies that are deemed to be indefinitely reinvested amounted to $199,650 at December 31, 2024.
The following table summarizes the activity related to the Company’s gross unrecognized tax benefits. The amounts listed in the below table also represents the total unrecognized tax benefits that, if recognized, would impact the effective tax rate as of December 31, 2024 and 2023, respectively:
Years ended December 31,
2024 2023
Balance at beginning of period $ 8,110  $ 7,787 
Increases related to prior year tax positions —  323 
Uncertain tax benefit sustained due to lapsing of statue of limitations (8,023) — 
Balance at end of period $ 87  $ 8,110 
To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment. The total amount of interest and penalties recognized in provision for income taxes on continuing operations was $1,390 and $855 for the years ended December 31, 2024 and 2023, respectively. The Company recorded cumulative accrued interest and penalties amounting to $23 as of December 31, 2024 in other long-term liabilities on its consolidated balance sheets.
The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The following describes the open tax years, by significant tax jurisdiction, as of December 31, 2024:
Jurisdiction Period
United States-Federal 2021-2024
United States-State 2020-2024
Given that the Company has utilized state net operating loss in the current and prior years, the statute for examination by the state taxing authorities will typically remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above.

As of December 31, 2024, it is reasonably possible that the Company may recognize approximately $87 of previously net unrecognized tax benefits, excluding interest and penalties, related to various U.S. federal tax positions, primarily due to the expiration of statutes of limitations within the next twelve months.
As of December 31, 2024 and 2023, the Company no longer has a federal net operating loss or foreign tax credit carryforward.
Cash payments for income taxes, net of refunds, are as follows:
Years ended December 31,
2024 2023 2022
Domestic $ 22,860  $ 21,973  $ 13,277 
Foreign 3,399  464  359 
$ 26,259  $ 22,437  $ 13,636 
On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA imposes a 15% corporate alternative minimum tax for certain large corporations with average annual adjusted financial statement income in excess of $1 billion for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. Historically the Company has made discretionary share repurchases under its share repurchase programs. Beginning in 2023, these transactions will be subject to the excise tax of the IRA. See Note 7 to these consolidated financial statements for information on the accrued excise tax related to these stock repurchases.