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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 14: INCOME TAXES The components of the income tax expense for continuing operations are as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Current |  |  |  |  |  |  |  |  |
Domestic |  | $ | 54,406 |  |  | $ | 37,333 |  |  | $ | 40,405 |
Foreign |  |  | 39,792 |  |  |  | 22,732 |  |  |  | 18,485 |
Total current |  |  | 94,198 |  |  |  | 60,065 |  |  |  | 58,890 |
Deferred |  |  |  |  |  |  |  |  |
Domestic |  |  | (25,195 | ) |  |  | (17,238 | ) |  |  | (14,742 | )
Foreign |  |  | 1,780 |  |  |  | (2,647 | ) |  |  | (1,152 | )
Total deferred |  |  | (23,415 | ) |  |  | (19,885 | ) |  |  | (15,894 | )
Income tax expense |  | $ | 70,783 |  |  | $ | 40,180 |  |  | $ | 42,996 |
Income from continuing operations before taxes for U.S. and foreign operations are as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Domestic |  | $ | (130,387 | ) |  | $ | (105,986 | ) |  | $ | (79,328 | )
Foreign |  |  | 212,144 |  |  |  | 111,105 |  |  |  | 101,324 |
Income from continuing operations before income taxes |  | $ | 81,757 |  |  | $ | 5,119 |  |  | $ | 21,996 |
Accumulated other comprehensive income at December 31, 2024 and 2023, has been reported net of a $3.5 million deferred tax asset and a $2.4 million deferred tax asset, respectively. The Company has the intent and ability to assert that undistributed foreign earnings are indefinitely or “permanently” reinvested outside the U.S. The Company is aware that there may be withholding taxes on an actual distribution of the undistributed foreign earnings. If the undistributed earnings were not considered permanently reinvested, deferred tax liabilities would have been provided for any applicable income taxes and withholding taxes payable in various countries, which would not be significant. A determination of the unrecognized deferred tax liabilities on the other outside basis differences reinvested indefinitely at December 31, 2024, is not practicable due to the complexities in the calculations. The items accounting for the difference between income taxes computed at the U.S. statutory rate and the expense for income taxes for continuing operations are as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Income tax expense at the U.S. statutory rate, 21% |  | $ | 17,169 |  |  | $ | 1,075 |  |  | $ | 4,619 |
State taxes, net |  |  | 919 |  |  |  | 1,175 |  |  |  | 1,418 |
Effect of foreign tax rates |  |  | (4,093 | ) |  |  | (5,325 | ) |  |  | (2,940 | )
GILTI |  |  | 13,094 |  |  |  | 7,919 |  |  |  | 6,452 |
Effect of change in tax rates |  |  | 1,636 |  |  |  | 4,193 |  |  |  | 1,572 |
Non-taxable income |  |  | (215 | ) |  |  | (431 | ) |  |  | (221 | )
Non-deductible expenses |  |  | 5,991 |  |  |  | 5,698 |  |  |  | 5,869 |
Stock based compensation |  |  | 2,186 |  |  |  | — |  |  |  | — |
Valuation allowance |  |  | 22,838 |  |  |  | 31,854 |  |  |  | 29,514 |
Tax credits |  |  | — |  |  |  | — |  |  |  | 120 |
Adjustments in respect of prior years |  |  | 11,122 |  |  |  | (5,509 | ) |  |  | (3,072 | )
Other, net |  |  | 136 |  |  |  | (469 | ) |  |  | (335 | )
Income tax expense |  | $ | 70,783 |  |  | $ | 40,180 |  |  | $ | 42,996 |
The Company has adopted a position of indefinitely reinvesting earnings in its foreign operations. Despite the Company’s position of indefinitely reinvesting earnings in its foreign operations, the Tax Cuts and Jobs Act of 2017 made significant changes to the way U.S. multinationals’ foreign profits are taxed. GILTI was introduced as an outbound anti-base erosion provision. In 2021, the Organization for Economic Cooperation and Development (“OECD”) released Pillar Two Global Anti-Base Erosion model rules (“Pillar Two Rules”), designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. On June 20, 2024, as part of Bill C-69, Canada enacted its Pillar Two legislation effective January 1, 2024. Canada Bill C-59 was also enacted on June 20, 2024, and included the excessive interest and financing expenses limitation (EIFEL) regime effective for tax years beginning on or after December 31, 2023. The Company has performed a quantitative and qualitative assessment and determined the effects are not materially significant to the 2024 financial statements. The Company will continue to evaluate Pillar Two and EIFEL for their potential impact on future periods as further legislation is proposed or enacted. Deferred income tax liabilities consist of the following:
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
|  | (in thousands) |
Deferred tax assets consist of the following: |  |  |  |  |  |
Capitalized research & development |  | $ | 4,653 |  |  | $ | — |
Deferred finance charges |  |  | 4,275 |  |  |  | 2,322 |
Inventory reserve |  |  | 26,534 |  |  |  | 12,927 |
Other |  |  | 23,278 |  |  |  | 19,191 |
Disallowed business interest expense |  |  | 180,571 |  |  |  | 163,739 |
Operating lease liability |  |  | 43,744 |  |  |  | 40,894 |
Pension |  |  | 1,134 |  |  |  | 3,632 |
Tax losses carried forward |  |  | 11,397 |  |  |  | 15,055 |
Deferred tax assets, before valuation allowance |  |  | 295,586 |  |  |  | 257,760 |
Valuation allowance |  |  | (117,650 | ) |  |  | (94,812 | )
Deferred tax assets |  |  | 177,936 |  |  |  | 162,948 |
Deferred tax liabilities consist of the following: |  |  |  |  |  |
Property, plant and equipment |  |  | (35,836 | ) |  |  | (36,824 | )
Intangible assets |  |  | (246,422 | ) |  |  | (244,076 | )
Operating lease right of use asset |  |  | (55,966 | ) |  |  | (53,314 | )
Other |  |  | (8,457 | ) |  |  | (6,309 | )
Deferred tax liabilities |  |  | (346,681 | ) |  |  | (340,523 | )
Net deferred tax liability |  | $ | (168,745 | ) |  | $ | (177,575 | )
Changes to the Company’s valuation allowance are as follows:
|  | As of December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Balance, beginning of the year |  | $ | 94,812 |  |  | $ | 62,958 |  |  | $ | 33,444 |
Additions charge to income tax expense |  |  | 26,050 |  |  |  | 31,953 |  |  |  | 29,514 |
Reductions credited to income tax expense |  |  | (3,212 | ) |  |  | (99 | ) |  |  | — |
Change in valuation allowance |  |  | 22,838 |  |  |  | 31,854 |  |  |  | 29,514 |
Balance, end of the year |  | $ | 117,650 |  |  | $ | 94,812 |  |  | $ | 62,958 |
The total increase in valuation allowance was $22.8 million, $31.9 million and $29.5 million for the years ending December 31, 2024, 2023 and 2022, respectively. A “more likely than not” criterion is applied when evaluating the realizability of a deferred tax asset. A valuation allowance of $117.7 million and $94.8 million as of December 31, 2024 and 2023, respectively, has been recorded against the foreign net operating losses in various countries and U.S. Section 163(j) interest expense carryforwards. The Company has determined that it is more likely than not that the amount of the deferred tax assets will not be realized. A portion of the foreign losses may be carried forward indefinitely, as well as the U.S. Section 163(j) limitation. 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. The Company considers the scheduled reversal of deferred tax liabilities, available taxes in the carryback periods, projected future taxable income and tax planning strategies in making this assessment. The Company’s policy is to recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of December 31, 2024 and December 31, 2023, the Company has no liability recorded for the payment of interest and penalties and has not included an amount in the current year’s tax provision. Unrecognized tax benefits were nil as at December 31, 2024 and December 31, 2023. It is expected that the amount of unrecognized tax benefits will not change in the next 12 months. The Company files a U.S. federal income tax return as part of a consolidated group as well as income tax returns in various states and other foreign jurisdictions. The Company is open to examination in the United States. for 2019 onward, and Canada for 2020 onward. Generally, for the remaining tax jurisdictions, years from 2019 onward are still open to examination.

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