Astronics Corporation Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

The provision for (benefit from) income taxes at December 31 consists of the following:

The effective tax rates differ from the statutory federal income tax rate as follows:


	2023		2022		2021
Statutory Federal Income Tax Rate	21.0	%	21.0	%	21.0	%
Permanent Items
Stock Compensation Expense	(1.4)	%	(2.2)	%	(2.1)	%

Contingent Consideration Liability Fair Value Adjustment	—	%	—	%	1.7	%
Other	(1.4)	%	(0.3)	%	(0.7)	%
Foreign Tax Rate Differential	(0.4)	%	(2.8)	%	(2.7)	%
State Income Tax, Net of Federal Income Tax Effect	(4.6)	%	1.0	%	2.2	%
Research and Development Tax Credits	14.1	%	7.7	%	12.8	%
Change in Valuation Allowance	(26.1)	%	(44.6)	%	(29.8)	%
Net GILTI and FDII Tax (Benefit) Expense	(1.0)	%	1.8	%	—	%
Foreign Tax Credit for Dividend Withholding	—	%	(1.5)	%	1.7	%
Tax Rate Change on 2020 Federal Net Operating Loss (NOL) Carryback	—	%	—	%	0.9	%
Other	(0.6)	%	(0.1)	%	0.1	%
Effective Tax Rate	(0.4)	%	(20.0)	%	5.1	%

Significant components of the Company’s deferred tax assets and liabilities at December 31, are as follows:


(In thousands)	2023		2022
Deferred Tax Assets:
Asset Reserves	$	19,609	$	17,680
Deferred Compensation	6,968		6,798
Section 163(j) - Interest Expense Limitation	1,777		—
State Investment and Research and Development Tax Credit Carryforwards, Net of Federal Tax	1,430		1,128
Customer Advanced Payments and Deferred Revenue	870		1,917
Net Operating Loss Carryforwards and Other	11,178		11,307
Goodwill and Intangible Assets	1,001		1,277
ASC 606 Revenue Recognition	92		197
Research & Development Costs	25,659		19,892
Lease Liabilities	6,952		3,201
Other	5,308		6,135
Total Gross Deferred Tax Assets	80,844		69,532
Valuation Allowance	(65,640)		(57,369)
Deferred Tax Assets	15,204		12,163
Deferred Tax Liabilities:
Depreciation	8,593		8,886
ASC 606 Revenue Recognition - Section 481(a) Adjustment	227		525
Lease Assets	6,595		2,905
Earnout Income Accrual	99		—
Other	997		1,005
Deferred Tax Liabilities	16,511		13,321
Net Deferred Tax Liabilities	$	(1,307)	$	(1,158)

The net deferred tax assets and liabilities presented in the Consolidated Balance Sheets are as follows at December 31:


(In thousands)	2023		2022
Other Assets — Long-term	$	—	$	712

Deferred Tax Liabilities — Long-term	(1,307)		(1,870)

Net Deferred Tax Liabilities	$	(1,307)	$	(1,158)

A reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, is as follows:


(in thousands)	2023		2022		2021
Balance at Beginning of the Year	$	443	$	1,412	$	1,890
Decreases as a Result of Tax Positions Taken in Prior Years	(343)		(969)		(478)

Balance at End of the Year	$	100	$	443	$	1,412