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

Income Taxes (Tables)

v3.25.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
Income before income tax consisted of the following:

Year Ended December 31,
(in thousands)
 2025 2024 2023
U.S. operations
 $ (1,738) $ 83,120  $ 125,578 
Foreign operations 231,362  215,067  200,614 
Income before income tax $ 229,624  $ 298,187  $ 326,192 

Components of the provision for income taxes consisted of the following:

Year Ended December 31,
(in thousands)
 2025 2024 2023
Current:
Federal $ 7,757  $ 32,073  $ 39,939 
State and local 4,588  8,394  6,879 
Non-U.S.
 39,633  40,651  33,109 
51,978  81,118  79,927 
Deferred:
Federal (3,732) (11,925) (5,492)
State and local (2,986) (1,258) (1,589)
Non-U.S.
 7,140  6,979  1,946 
422  (6,204) (5,135)
Income tax expense $ 52,400  $ 74,914  $ 74,792 
Reconciliation of Statutory Federal Income Tax Rate to Effective Rate
The following table presents a reconciliation of the federal statutory tax rate to the effective tax rate reported in the financial statements:

Year Ended December 31,
2025 2024 2023
(in thousands, except for percentages of income before tax) Amount % Amount % Amount %
U.S. federal statutory tax rate $ 48,221  21.0  % $ 62,619  21.0  % $ 68,500  21.0  %
State and local income taxes, net of federal income tax effect 1,717  0.7  5,802  1.9  5,567  1.7 
Foreign tax effects:
Canada:
Non-federal taxes 3,044  1.3  3,811  1.3  4,198  1.3 
Other 948  0.4  689  0.2  859  0.3 
China:
Other
 7,181  3.1  2,430  0.8  4,372  1.3 
Korea:
Changes in valuation allowance 480  0.2  6,355  2.1  —  — 
Other 95  —  244  0.1  956  0.3 
Switzerland:
Statutory tax rate difference between Switzerland and the U.S. (20,208) (8.8) (17,489) (5.9) (15,113) (4.6)
Non-federal taxes 10,935  4.8  9,536  3.2  7,137  2.2 
Changes in valuation allowance
 (141) (0.1) (538) (0.2) 7,001  2.1 
Intangible assets —  —  —  —  (9,458) (2.9)
Other 27  —  (745) (0.2) (2,059) (0.6)
Other foreign jurisdictions 490  0.3  1,062  0.4  1,542  0.5 
Enactment of new tax laws:
Section 987 regulations
 (2,860) (1.2) —  —  —  — 
Effect of cross-border tax laws:
Other
 509  0.3  2,981  1.0  4,118  1.3 
Tax credits:
Research and developments tax credits (622) (0.3) (2,223) (0.7) (2,373) (0.7)
Foreign tax credits (3,640) (1.6) (1,676) (0.6) (1,674) (0.5)
Nontaxable or nondeductible items:
Impairment of goodwill
 2,553  1.1  —  —  —  — 
Other
 1,571  0.7  1,733  0.6  1,141  0.3 
Changes in unrecognized tax benefits 1,598  0.7  323  0.1  790  0.2 
Other adjustments
 502  0.2  —  —  (712) (0.3)
Effective tax rate $ 52,400  22.8  % $ 74,914  25.1  % $ 74,792  22.9  %
(a) State taxes in Oregon, California, Texas, Florida, New Jersey, and Georgia in the current period made up the majority (greater than 50 percent) of the tax effect in this category.
Significant Components of Deferred Taxes
Significant components of the Company's deferred taxes consisted of the following:

As of December 31,
(in thousands)
 2025
2024
Deferred tax assets:
Accruals and allowances $ 41,251  $ 37,436 
Operating lease liabilities
 120,198  114,079 
Capitalized inventory costs 18,087  17,895 
Sales reserves 15,083  16,648 
Share-based compensation
 11,529  10,682 
Net operating loss carryforwards 3,156  2,550 
Depreciation and amortization 6,398  10,473 
Capitalized research and development expenditures 18,087  23,392 
Tax credits 3,241  153 
Other 1,399  3,153 
Gross deferred tax assets 238,429  236,461 
Valuation allowance (11,182) (10,670)
Net deferred tax assets 227,247  225,791 
Deferred tax liabilities:
Depreciation and amortization (1,540) (3,149)
Prepaid expenses (3,044) (3,216)
Operating lease ROU assets
 (104,927) (100,475)
Deferred tax liability associated with future repatriations (7,953) (7,849)
Foreign currency (2,689) (7,209)
Gross deferred tax liabilities (120,153) (121,898)
Total net deferred taxes $ 107,094  $ 103,893 
Schedule of Cash Flow, Supplemental Disclosures
Net cash paid (refunds received) for income taxes consisted of the following:

Year Ended December 31,
(in thousands)
 2025 2024 2023
Federal $ 36,065  $ 25,606  $ 43,000 
Aggregated state and local jurisdictions 1,940  4,875  5,855 
Disaggregated state and local jurisdictions:
California 654  1,870  1,700 
Oregon (303) 1,165  921 
Illinois —  —  845 
New Jersey 375  475  750 
New York 428  492  929 
Minnesota
 346  —  — 
Texas
 314  —  — 
Florida
 317  —  — 
Pennsylvania
 290  —  — 
Aggregated foreign jurisdictions 4,497  7,978  6,432 
Disaggregated foreign jurisdictions:
Canada 10,931  12,313  14,447 
China 16,567  11,289  9,461 
Switzerland 13,973  10,041  6,167 
Net cash paid for income taxes
 $ 86,394  $ 76,104  $ 90,507 
Schedule of Unrecognized Tax Benefits Roll Forward
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

Year Ended December 31,
(in thousands)
 2025 2024 2023
Balance at beginning of year $ 10,064  $ 10,318  $ 10,177 
Increases related to prior year tax positions 728  264  578 
Decreases related to prior year tax positions (523) (307) — 
Increases related to current year tax positions 2,169  1,247  1,376 
Expiration of statute of limitations (1,402) (1,458) (1,813)
Balance at end of year $ 11,036  $ 10,064  $ 10,318