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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes In December 2019, COVID-19 emerged and spread throughout the world causing severe disruption to the global economy. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law after COVID-19 was declared a pandemic. There were several income tax provisions and other non-tax matters incorporated into law as a result of the enactment of the CARES Act. The Company applied certain articles of the CARES Act in the income tax provision, including the increased interest deduction allowed up to 50 percent of adjusted taxable income for tax years 2019 and 2020. For the year ended December 31, 2019, the Company deducted an additional $4.7 million in interest expense in the 2019 federal income tax return as a result of the increased adjusted taxable income limitation. In addition, the Company elected to delay the employer-side of the FICA payments until 2021 as provided under the CARES Act, which were paid on September 15, 2021. Income before income taxes consisted of:
|  | For the Year Ended December 31, |  |
($ in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |  |
U.S. |  | $ | 77,101 |  |  | $ | 6,429 |  |  | $ | 33,655 |  |
Foreign |  |  | (9,200 | ) |  |  | (5,576 | ) |  |  | (2,998 | ) |
Total income before incomes taxes |  | $ | 67,901 |  |  | $ | 853 |  |  | $ | 30,657 |  |
The income tax provision consisted of the following items:
|  | For the Year Ended December 31, |
($ in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | 25,361 |  |  | $ | 4,169 |  |  | $ | 16,901 |
State |  |  | 10,523 |  |  |  | 5,399 |  |  |  | 7,316 |
Foreign |  |  | 160 |  |  |  | 652 |  |  |  | 673 |
Total current |  |  | 36,044 |  |  |  | 10,220 |  |  |  | 24,890 |
Deferred |  |  |  |  |  |  |  |  |
Federal |  |  | (7,434 | ) |  |  | (1,308 | ) |  |  | (8,542 | )
State |  |  | (1,627 | ) |  |  | (2,615 | ) |  |  | (2,092 | )
Foreign |  |  | (531 | ) |  |  | (866 | ) |  |  | (675 | )
Total deferred |  |  | (9,592 | ) |  |  | (4,789 | ) |  |  | (11,309 | )
Income tax provision |  | $ | 26,452 |  |  | $ | 5,431 |  |  | $ | 13,581 |
A reconciliation to the income tax provision from the amounts computed by applying the statutory U.S. federal income tax rate is as follows:
|  | For the Year Ended December 31, |
($ in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Income tax provision at statutory rate |  | $ | 14,259 |  |  | $ | 179 |  |  | $ | 6,438 |
State income taxes, net of federal income tax effect |  |  | 6,748 |  |  |  | 1,188 |  |  |  | 2,360 |
Tax rate changes/ valuation of deferred tax items |  |  | 586 |  |  |  | 1,353 |  |  |  | 998 |
162(m) limitation |  |  | 1,325 |  |  |  | 1,179 |  |  |  | 1,289 |
Non-deductible expenses |  |  | 174 |  |  |  | 1,786 |  |  |  | 450 |
Stock-based compensation |  |  | (752 | ) |  |  | (38 | ) |  |  | (716 | )
Unrecognized tax benefits |  |  | 174 |  |  |  | (929 | ) |  |  | (741 | )
Tax impact for change in fair value of warrants |  |  | 1,596 |  |  |  | 237 |  |  |  | 3,416 |
Change in valuation allowance |  |  | 1,435 |  |  |  | 924 |  |  |  | 317 |
Non-deductible transaction costs |  |  | 1,078 |  |  |  | 19 |  |  |  | 270 |
Research and development credits |  |  | (125 | ) |  |  | (121 | ) |  |  | (232 | )
Other |  |  | (46 | ) |  |  | (346 | ) |  |  | (268 | )
Total income tax provision |  | $ | 26,452 |  |  | $ | 5,431 |  |  | $ | 13,581 |
Significant components of the Company’s deferred income tax assets and liabilities consist of the following at December 31:
($ in thousands) |  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |
Accrued expenses and other |  | $ | 7,334 |  |  | $ | 1,027 |
Allowance for credit losses |  |  | 4,927 |  |  |  | 4,838 |
Net operating loss carryforward |  |  | 18,193 |  |  |  | 3,626 |
Interest expense limitation carryforward |  |  | 5,935 |  |  |  | 1,070 |
Federal and state income tax credits |  |  | 5,295 |  |  |  | 1,132 |
ASC 842 operating lease liabilities |  |  | 9,578 |  |  |  | 8,679 |
Transaction costs |  |  | 446 |  |  |  | 319 |
Other |  |  | 1,042 |  |  |  | 1,210 |
Gross deferred tax assets |  |  | 52,750 |  |  |  | 21,901 |
Valuation allowance |  |  | (3,785 | ) |  |  | (3,422 | )
Deferred tax assets, net of valuation allowance |  |  | 48,965 |  |  |  | 18,479 |
Deferred tax liabilities: |  |  |  |  |  |
Intangible assets and transaction costs |  |  | (62,116 | ) |  |  | (16,358 | )
Property and equipment |  |  | (13,562 | ) |  |  | (10,285 | )
Financing costs |  |  | (3,077 | ) |  |  | (3,730 | )
Prepaid assets |  |  | (1,235 | ) |  |  | (957 | )
ASC 842 operating lease assets |  |  | (9,104 | ) |  |  | (8,297 | )
481(a) adjustment, net |  |  | (857 | ) |  |  | — |
Gross deferred tax liabilities |  |  | (89,951 | ) |  |  | (39,627 | )
Total deferred tax liabilities, net |  | $ | (40,986 | ) |  | $ | (21,148 | )
In accordance with ASC 740, Income Taxes, deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets can be affected by, among other things, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, the Company’s experience with utilizing operating losses and tax credit carryforwards by jurisdiction, and tax planning alternatives and strategies that may be available. The Company performed an analysis of the reversal of the deferred tax assets and considered the overall business environment, historical earnings and the outlook for future years. The Company determined that it is more likely than not that the benefit from certain state and foreign net operating loss carryforwards will not be realized as of the years ended December 31, 2021 and 2020, and as such provided a valuation allowance of $3.8 m illion and $3.4 million, respectively. The valuation allowance could be adjusted in future periods if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present. The net operating loss carryforwards represent $158.7 million and $31.1 million of federal, state and foreign net operating losses at December 31, 2021 and 2020, respectively. The federal net operating loss carryforward at December 31, 2021 consists of $12.1 million of losses that were generated prior to 2018 and will expire by 2036 if not previously utilized and $26.0 million of losses that were generated after 2017 with no expiration date. The Company also has certain tax credits of $6.4 million and $1.5 million at December 31, 2021 and 2020, respectively, which if unused will begin to expire in 2025. The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31:
($ in thousands) |  | 2021 |  |  | 2020 |
Balance at the beginning of the year |  | $ | 953 |  |  | $ | 1,735 |
Increases/(decreases) related to current year tax positions |  |  | 447 |  |  |  | 126 |
Increases/(decreases) related to prior year tax positions |  |  | 1,478 |  |  |  | 299 |
Expiration due to statute of limitations |  |  | — |  |  |  | (1,207 | )
Balance at the end of the year |  | $ | 2,878 |  |  | $ | 953 |
Included in the balance of unrecognized tax benefits as of December 31, 202 1 were $1.7 millio n of tax benefits that, if recognized, would impact the effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. The Company recognized less than $0.1 million for fiscal year 2021 and $1.0 million for fiscal year 2020, in interest and penalties. At December 31, 2021 and 2020, the Company had accrued interest and penalties of less than $0.1 million at the end of both periods. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based on technical merits, it is more likely than not that the tax position will be sustained under examination. The Company is subject to examination by the Internal Revenue Service and taxing authorities in various states. The Company files U.S. federal and various foreign income tax returns which are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they are filed. The Company’s state income tax returns are generally no longer subject to income tax examination by tax authorities prior to 2017; however, the Company’s net operating loss carryforwards and research credit carryforwards arising prior to that year are subject to adjustment. The Company is currently under audit by various state tax jurisdictions for the years 2018 and 2019, however, no material adjustments are anticipated. The Company regularly assesses the likelihood of tax deficiencies in each of the tax jurisdictions and, accordingly, makes appropriate adjustments to the tax provision as deemed necessary.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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