LEMAITRE VASCULAR INC Income Taxes Disclosure
9. Income Taxes
Income before income taxes is as follows:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
United States |
|
$ |
75,030 |
|
|
$ |
52,829 |
|
|
$ |
37,356 |
|
Foreign |
|
|
154 |
|
|
|
4,046 |
|
|
|
2,119 |
|
Total |
|
$ |
75,184 |
|
|
$ |
56,875 |
|
|
$ |
39,475 |
|
Certain of the Company’s foreign subsidiaries are included in the Company’s U.S. tax return as branches but are included as foreign for purposes of the table above.
The provision (benefit) for income taxes is as follows:
|
|
Year ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
11,663 |
|
|
|
10,308 |
|
|
|
6,203 |
|
State |
|
|
2,035 |
|
|
|
1,840 |
|
|
|
1,300 |
|
Foreign |
|
|
1,440 |
|
|
|
1,140 |
|
|
|
1,084 |
|
Current total |
|
|
15,138 |
|
|
|
13,288 |
|
|
|
8,587 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
1,899 |
|
|
|
(363 |
) |
|
|
616 |
|
State |
|
|
362 |
|
|
|
(94 |
) |
|
|
122 |
|
Foreign |
|
|
51 |
|
|
|
6 |
|
|
|
45 |
|
Deferred total |
|
|
2,312 |
|
|
|
(451 |
) |
|
|
783 |
|
Provision for income taxes |
|
$ |
17,450 |
|
|
$ |
12,837 |
|
|
$ |
9,370 |
|
Reconciliation of the U.S. federal statutory rate to the Company's effective tax rate is as follows:
|
|
Year ended December 31, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||||||||||||||
|
|
Total |
|
|
Percentage |
|
|
Total |
|
|
Percentage |
|
|
Total |
|
|
Percentage |
|
||||||
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
(in thousands) |
|
|
|
|
||||||
U.S. Federal Statutory Rate |
|
$ |
15,789 |
|
|
|
21.0 |
% |
|
$ |
11,944 |
|
|
|
21.0 |
% |
|
$ |
8,290 |
|
|
|
21.0 |
% |
, Net of Federal Income Tax Effect(1) |
|
|
2,057 |
|
|
|
2.7 |
% |
|
|
1,472 |
|
|
|
2.6 |
% |
|
|
1,231 |
|
|
|
3.1 |
% |
Foreign Tax Effects |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Germany |
|
|
1,156 |
|
|
|
1.5 |
% |
|
|
118 |
|
|
|
0.2 |
% |
|
|
397 |
|
|
|
1.0 |
% |
Other foreign jurisdictions |
|
|
562 |
|
|
|
0.7 |
% |
|
|
370 |
|
|
|
0.7 |
% |
|
|
383 |
|
|
|
1.0 |
% |
Effect of Changes in Tax Laws or Rates Enacted in the Current Period |
|
|
- |
|
|
|
0.0 |
% |
|
|
- |
|
|
|
0.0 |
% |
|
|
- |
|
|
|
0.0 |
% |
Effect of Cross-Border Tax Laws |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Global intangible low-taxed income |
|
|
40 |
|
|
|
0.1 |
% |
|
|
110 |
|
|
|
0.2 |
% |
|
|
133 |
|
|
|
0.3 |
% |
Foreign-derived intangible income |
|
|
(568 |
) |
|
|
(0.8 |
)% |
|
|
(466 |
) |
|
|
(0.8 |
)% |
|
|
(238 |
) |
|
|
(0.6 |
)% |
Tax Credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Research and development tax credits |
|
|
(337 |
) |
|
|
(0.4 |
)% |
|
|
(406 |
) |
|
|
(0.7 |
)% |
|
|
(231 |
) |
|
|
(0.6 |
)% |
Changes in Valuation Allowances |
|
|
3 |
|
|
|
0.0 |
% |
|
|
(21 |
) |
|
|
0.0 |
% |
|
|
(21 |
) |
|
|
(0.1 |
)% |
Nontaxable or Nondeductible Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
162(m) officers compensation |
|
|
914 |
|
|
|
1.2 |
% |
|
|
538 |
|
|
|
0.9 |
% |
|
|
478 |
|
|
|
1.2 |
% |
Share-based payment awards |
|
|
(1,330 |
) |
|
|
(1.8 |
)% |
|
|
(1,226 |
) |
|
|
(2.2 |
)% |
|
|
(912 |
) |
|
|
(2.3 |
)% |
Other nontaxable or nondeductible items |
|
|
(648 |
) |
|
|
(0.9 |
)% |
|
|
316 |
|
|
|
0.6 |
% |
|
|
(23 |
) |
|
|
(0.1 |
)% |
Changes in Unrecognized Tax Benefits |
|
|
(72 |
) |
|
|
0.0 |
% |
|
|
1 |
|
|
|
0.0 |
% |
|
|
45 |
|
|
|
0.1 |
% |
Other Adjustments |
|
|
(116 |
) |
|
|
(0.1 |
)% |
|
|
87 |
|
|
|
0.1 |
% |
|
|
(162 |
) |
|
|
(0.3 |
)% |
Effective Tax Rate |
|
$ |
17,450 |
|
|
|
23.2 |
% |
|
$ |
12,837 |
|
|
|
22.6 |
% |
|
$ |
9,370 |
|
|
|
23.7 |
% |
(1) During the year ended December 31, 2025, state taxes in California, New Jersey, New York, Illinois, Pennsylvania, Florida, Georgia, and Tennessee comprised greater than 50% of the tax effect in this category. During the year ended December 31, 2024, state taxes in California, New York, Pennsylvania, Florida, Illinois, Louisiana, New Jersey, Georgia, and Alabama comprised greater than 50% of the tax effect in this category. During the year ended December 31, 2023, state taxes in California, New York State, New Jersey, Pennsylvania, Florida, Illinois, Georgia, and Texas comprised greater than 50% of the tax effect in this category.
The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. As of December 31, 2025, the gross amount of unrecognized tax benefits exclusive of interest and penalties was $0.4 million, which may increase within the year ending December 31, 2026. The Company remains subject to examination until the statute of limitations expires for each remaining respective tax jurisdiction. The statute of limitations will be open with respect to these tax positions through 2031. A reconciliation of the beginning and ending amount of the Company’s unrecognized tax benefits is as follows:
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Unrecognized tax benefits at the beginning of year |
|
$ |
515 |
|
|
$ |
587 |
|
|
$ |
612 |
|
Additions/adjustments for tax positions of current year |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Additions/adjustments for tax positions of prior years |
|
|
2 |
|
|
|
(33 |
) |
|
|
(25 |
) |
Reductions for settlements with taxing authorities |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Reductions for lapses of the applicable statutes of limitations |
|
|
(107 |
) |
|
|
(39 |
) |
|
|
- |
|
Unrecognized tax benefits at the end of the year |
|
$ |
410 |
|
|
$ |
515 |
|
|
$ |
587 |
|
Deferred taxes were attributable to the following temporary differences:
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Deferred tax assets: |
|
|
|
|
|
|
||
Inventory |
|
$ |
3,184 |
|
|
$ |
2,682 |
|
Net operating loss carryforwards |
|
|
655 |
|
|
|
774 |
|
Tax credit carryforwards |
|
|
1,119 |
|
|
|
1,138 |
|
Capital loss carryforwards |
|
|
453 |
|
|
|
422 |
|
Reserves and accruals |
|
|
1,280 |
|
|
|
908 |
|
Operating lease liabilities |
|
|
3,125 |
|
|
|
3,419 |
|
Intangible assets |
|
|
4,408 |
|
|
|
4,488 |
|
Stock options |
|
|
1,020 |
|
|
|
746 |
|
Other |
|
|
80 |
|
|
|
2,526 |
|
Total deferred tax assets |
|
|
15,324 |
|
|
|
17,103 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Property and equipment |
|
|
(3,223 |
) |
|
|
(3,166 |
) |
Goodwill |
|
|
(7,792 |
) |
|
|
(7,039 |
) |
Operating lease right-of-use assets |
|
|
(2,850 |
) |
|
|
(3,152 |
) |
Foreign branch deferred offset |
|
|
(566 |
) |
|
|
(593 |
) |
Other |
|
|
(181 |
) |
|
|
(160 |
) |
Total deferred tax liabilities |
|
|
(14,612 |
) |
|
|
(14,110 |
) |
Net deferred tax assets before valuation allowance |
|
|
712 |
|
|
|
2,993 |
|
Valuation allowance |
|
|
(1,688 |
) |
|
|
(1,653 |
) |
Net deferred tax (liability) asset |
|
$ |
(976 |
) |
|
$ |
1,340 |
|
Deferred tax classification |
|
|
|
|
|
|
||
Long-term deferred tax asset |
|
$ |
759 |
|
|
$ |
1,425 |
|
Long-term deferred tax liability |
|
|
(1,735 |
) |
|
|
(85 |
) |
Net long-term deferred tax (liability) asset |
|
$ |
(976 |
) |
|
$ |
1,340 |
|
In 2025, the Company increased its valuation allowance by less than $0.1 million mainly attributable to Australian net operating loss carry forwards and Massachusetts credit carryforwards. In 2024, the Company decreased its valuation allowance by $0.1 million mainly attributable to Australian net operating loss carry forwards and Massachusetts credit carryforwards.
As of December 31, 2025, the Company has a valuation allowance of $1.7 million for deferred tax assets primarily related to Australian net operating loss and capital loss carry forwards and Massachusetts tax credit carry forwards that are not expected to be realized. The valuation allowance against the Company’s deferred tax assets may require adjustment in the future based on changes in the mix of temporary differences, changes in tax laws, and operating performance.
Realization of the Company’s deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. Although the Company believes it is more likely than not that future taxable income will be sufficient to allow it to recover substantially all of the value of its deferred tax assets remaining after the Company applies the valuation allowances, realization is not assured and future events could cause the Company to change its judgment. In the event that actual results differ from the Company’s estimates, or the Company adjusts these estimates in the future periods, further adjustments to the Company’s valuation allowance may be recorded, which could materially impact its financial position and net income (loss) in the period of the adjustment.
As of December 31, 2025, the Company had net operating loss carryforwards in Australia of $0.9 million that do not expire, in France of $1.2 million that do not expire, in Spain of $0.3 million that do not expire, in Norway of $0.1 million that do not expire, and in China of $0.2 million that expire in two years. The Company has a capital loss carryforward in Australia of $1.5 million that does not expire. The Company also has state tax credit carryforwards of approximately $1.7 million that are available to reduce future tax liabilities, which begin to expire in 2030, or can be carried forward indefinitely.
In December 2018, the Company reevaluated its international operations and as a result, is no longer indefinitely reinvested with respect to undistributed earnings from its German and Australian subsidiaries. There was no material deferred tax expense recorded for foreign and state tax costs associated with the future remittance of these undistributed earnings. The Company remains permanently reinvested with respect to undistributed earnings from its other foreign subsidiaries. The Company has determined that it is not practicable to estimate the amount of deferred tax liability, if any, with respect to these permanently reinvested undistributed earnings.
The Company has been notified of an income tax audit in France and does not expect any material liability that may result from this audit.
As of December 31, 2025, the Company remains subject to examination in our most significant tax jurisdictions as follows:
United States |
|
Foreign |
Supplemental disclosures of cash flow information are as follows:
|
|
For the Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Cash paid for income taxes, net |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
10,500 |
|
|
$ |
9,700 |
|
|
$ |
5,600 |
|
State |
|
|
1,657 |
|
|
|
2,008 |
|
|
|
811 |
|
Foreign |
|
|
1,282 |
|
|
|
1,129 |
|
|
|
1,138 |
|
Total |
|
$ |
13,439 |
|
|
$ |
12,837 |
|
|
$ |
7,549 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 11, 2019 | |
| 2017 | Mar 9, 2018 | |
| 2016 | Mar 9, 2017 | |
| 2015 | Mar 10, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.