Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Schedule of income from continuing operations before provision (benefit) for income taxes Income from continuing operations before provision (benefit) for income taxes are taxed under the following jurisdictions (dollar amounts in thousands):
Year Ended December 31, 2021 2020
Domestic $ 14,932  $ 3,273 
Foreign 16,890  19,548 
Total $ 31,822  $ 22,821 
Schedule of components of the provision (benefit) for income taxes Components of the provision (benefit) for income taxes for each of the two years in the period ended December 31, 2021 are as follows (dollar amounts in thousands):
Year Ended December 31, 2021 2020
Current:    
Federal $   $ (1,056)
State 54  147 
Foreign 5,690  5,129 
Subtotal 5,744  4,220 
Deferred:    
Federal (5,679) (2,332)
State 146  52 
Foreign 1,404  (2,077)
Subtotal (4,129) (4,357)
Total provision (benefit) for income taxes $ 1,615  $ (137)
Schedule of differences between the statutory U.S. federal income tax rate and the provision (benefit) for income taxes, as a percentage of income before provision for income taxes The provision (benefit) for income taxes, as a percentage of income from continuing operations before provision (benefit) for income taxes, differs from the statutory U.S. federal income tax rate due to the following:
Year Ended December 31, 2021 2020
Statutory U.S. federal income tax rate 21.0  % 21.0  %
State income taxes, net of U.S. federal income tax benefit 0.4  1.3 
U.S. tax impact of foreign operations (6.3) 6.7 
Valuation allowance change (19.7) (25.0)
Unrecognized tax benefits 0.5  (6.1)
Permanent foreign items 2.4  3.1 
Withholding tax on royalties 3.4  2.8 
Executive compensation 4.9  1.3 
Stock compensation (4.0) (0.4)
Tax return to provision differences 0.4  (3.3)
Elimination of provision on intercompany transactions 1.7  (2.0)
Other 0.4  — 
Effective income tax rate 5.1  % (0.6) %
Schedule of components of U.S. tax impact of foreign operations Adjustments relating to the U.S. impact of foreign operations decreased the effective tax rate by 6.3 percentage points in 2021 and increased the effective tax rate by 6.7 percentage points in 2020. The components of this calculation were:
Components of U.S. tax impact of foreign operations 2021 2020
Foreign tax credits (7.4) % (4.0) %
Foreign tax rate differentials 0.6  3.1 
Foreign withholding taxes 1.9  2.8 
Transfer pricing adjustment 0.6  4.3 
Impact of GILTI 0.7  0.6 
Impact of FDII (2.7) (0.1)
Total (6.3) % 6.7  %
Schedule of significant components of the deferred tax assets (liabilities) The significant components of the deferred tax assets (liabilities) are as follows (dollar amounts in thousands):
As of December 31, 2021 2020
Inventory $ 1,173  $ 1,011 
Accrued liabilities 2,364  2,274 
Operating lease liabilities 2,871  3,273 
Deferred compensation 228  233 
Share-based compensation 877  1,332 
Intangible assets 131  149 
Bad debts 30  102 
Net operating losses 4,861  5,978 
Foreign tax and withholding credits 14,116  14,453 
Accrued compensation 1,726  1,422 
Other deferred tax assets 2,160  1,933 
Valuation allowance (8,650) (15,262)
Total deferred tax assets 21,887  16,898 
Accelerated depreciation (5,171) (4,197)
Right of use assets (2,544) (2,943)
Tax on unremitted earnings (2,107) (2,318)
Other deferred tax liabilities (41) (138)
Total deferred tax liabilities (9,863) (9,596)
Total deferred taxes, net $ 12,024  $ 7,302 
Schedule of components of deferred tax assets (liabilities), net The components of deferred tax assets (liabilities), net are as follows (dollar amounts in thousands):
As of December 31, 2021 2020
Net deferred tax assets $ 13,590  $ 8,693 
Net deferred tax liabilities (1,566) (1,391)
Total deferred taxes, net $ 12,024  $ 7,302 
Schedule of reconciliation of the beginning and ending amount of liabilities associated with uncertain tax benefits, excluding interest and penalties A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax benefits, excluding interest and penalties, is as follows for the years (dollar amounts in thousands):
Year Ended December 31, 2021 2020
Unrecognized tax benefits, opening balance $ 56  $ 1,385 
Settlement of liability reclassified as income tax payable   — 
Payments on liability (175) — 
Tax positions taken in a prior period    
Gross increases 412  — 
Gross decreases (237) (106)
Tax positions taken in the current period    
Gross increases   — 
Gross decreases   — 
Lapse of applicable statute of limitations (52) (1,210)
Currency translation adjustments (4) (13)
Unrecognized tax benefits, ending balance $   $ 56