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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income Tax Expense The components of loss before income taxes are as follows (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Domestic | $ | 4,559 |  |  | $ | (24,658) |  |  | $ | (13,798) |
Foreign | (12,073) |  |  | 3,072 |  |  | (1,186) |
Loss before income taxes | $ | (7,514) |  |  | $ | (21,586) |  |  | $ | (14,984) |
Income tax expense consists of the following (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 5,857 |  |  | $ | 5,573 |  |  | $ | 1,606 |
State | 834 |  |  | 1,004 |  |  | 367 |
Foreign | 665 |  |  | 3,851 |  |  | 3,120 |
| 7,356 |  |  | 10,428 |  |  | 5,093 |
Deferred: |  |  |  |  |
Federal | 538 |  |  | 222 |  |  | 236 |
State | 277 |  |  | 157 |  |  | 234 |
Foreign | (2,326) |  |  | (1,703) |  |  | (1,355) |
| (1,511) |  |  | (1,324) |  |  | (885) |
Income tax expense | $ | 5,845 |  |  | $ | 9,104 |  |  | $ | 4,208 |
Effective Tax Rate Reconciliation The income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Loss differs from the income tax benefit computed by applying the US federal statutory income tax rate of 21% to loss before income taxes due to the following (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Income tax benefit at statutory rate | $ | (1,578) |  |  | $ | (4,533) |  |  | $ | (3,147) |
Increase (reduction) in income taxes resulting from: |  |  |  |  |
Valuation allowance change | 4,091 |  |  | 9,964 |  |  | 4,779 |
Nondeductible executive compensation | 1,432 |  |  | 989 |  |  | 878 |
State income taxes, net of federal benefit | 936 |  |  | 281 |  |  | 484 |
Equity compensation | 577 |  |  | 872 |  |  | 472 |
Provision to return adjustments | 536 |  |  | (937) |  |  | 336 |
Research and development credit | (425) |  |  | (800) |  |  | (961) |
Foreign income taxes | (323) |  |  | 2,969 |  |  | 415 |
Nondeductible entertainment expenses | 201 |  |  | 262 |  |  | 117 |
Foreign derived intangible income deduction | (60) |  |  | (501) |  |  | (133) |
Net change in uncertain tax positions | (56) |  |  | 652 |  |  | 527 |
Foreign interest disallowance | — |  |  | — |  |  | 151 |
Foreign deferred items | — |  |  | — |  |  | (112) |
Other | 514 |  |  | (114) |  |  | 402 |
Income tax expense | $ | 5,845 |  |  | $ | 9,104 |  |  | $ | 4,208 |
Deferred Taxes The tax effects of temporary differences which give rise to deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Finance and operating leases | $ | 11,774 |  |  | $ | 13,254 |
Excess interest carryforward | 9,203 |  |  | 6,438 |
Loan revaluation | 5,240 |  |  | 3,859 |
Property | 2,974 |  |  | 1,786 |
Loss carryforwards | 2,880 |  |  | 3,205 |
Non-cash compensation | 2,545 |  |  | 2,761 |
Inventory and deferred preservation costs write-downs | 2,441 |  |  | 302 |
Deferred compensation | 2,055 |  |  | 1,790 |
Unrealized gains and losses | 1,119 |  |  | 5,424 |
Debt costs | 475 |  |  | — |
Credit carryforwards | 323 |  |  | 336 |
Accrued expenses | 165 |  |  | 2,567 |
Other | 672 |  |  | 1,422 |
Total deferred tax assets | 41,866 |  |  | 43,144 |
Less: Valuation allowance | (32,607) |  |  | (32,860) |
Total deferred tax assets, net | 9,259 |  |  | 10,284 |
Deferred tax liabilities: |  |  |
Intangible assets | (14,746) |  |  | (16,106) |
Finance and operating leases | (11,972) |  |  | (12,777) |
Prepaid items | (455) |  |  | (370) |
Debt costs | — |  |  | (626) |
Other | (1,201) |  |  | (1,169) |
Total deferred tax liabilities | (28,374) |  |  | (31,048) |
Total deferred tax liabilities, net | $ | (19,115) |  |  | $ | (20,764) |
We regularly assess the realizability of deferred tax assets and establish valuation allowances if it is more likely than not that some or all deferred tax assets will not be realized. The following table reflects changes in the valuation allowance (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Beginning balance | $ | 32,860 |  |  | $ | 17,942 |  |  | $ | 13,282 |
Additions charged to income tax expense | 4,091 |  |  | 9,964 |  |  | 4,779 |
(Reductions) additions related to Other comprehensive income, net | (4,081) |  |  | 5,109 |  |  | — |
Currency translation and other | (263) |  |  | (155) |  |  | (119) |
Ending balance | $ | 32,607 |  |  | $ | 32,860 |  |  | $ | 17,942 |
As of December 31, 2024 and 2023 we maintained a net deferred tax liability of $19.1 million and $20.8 million, respectively. As of December 31, 2024 and 2023 we maintained valuation allowances against our deferred tax assets of $32.6 million and $32.9 million, respectively, primarily related to net operating loss carryforwards and disallowed excess interest carryforwards. As of December 31, 2024 we had $4.6 million of federal net operating loss carryforwards related to prior acquisitions for which we have a full valuation allowance against and will fully expire at the end of 2032, $17.5 million of state net operating loss carryforwards, the majority of which will expire in 2025, $7.0 million of foreign net operating loss carryforwards, the majority of which have an indefinite carryforward period, and $0.3 million in research and development tax credit carryforwards, the majority of which will expire in 2032. As of December 31, 2024 we had a deferred tax asset of $9.2 million of disallowed interest expense deduction carryforwards as a result of the interest deductibility rule imposed by the “Tax Cuts and Jobs Act” of 2017 (“Tax Act”), and later modified by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). This deferred tax asset can be carried forward indefinitely. This rule disallows interest expense to the extent it exceeds 30% of adjusted taxable income. For the years ended December 31, 2024 and 2023 our interest deduction was limited to $18.5 million and $20.4 million, respectively. Reinvestment of Unremitted Earnings We intend to reinvest substantially all of the unremitted earnings of our non-US subsidiaries to fund working capital, strategic investments, and debt repayment and postpone their remittance indefinitely. Accordingly, no provision for state and local taxes or foreign withholding taxes was recorded on these unremitted earnings in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company is permanently reinvested with respect to the outside basis differences in its significant non-US subsidiaries. Uncertain Tax Positions The following table reflects changes in our uncertain tax position liability, excluding interest and penalties (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Beginning balance | $ | 4,832 |  |  | $ | 4,508 |  |  | $ | 4,089 |
Decrease related to prior year tax positions | (467) |  |  | (508) |  |  | (103) |
Increase related to current year tax positions | 338 |  |  | 2,728 |  |  | 847 |
(Decrease) increase for foreign exchange differences | (267) |  |  | 116 |  |  | (145) |
Increase related to prior year tax positions | 199 |  |  | 26 |  |  | 20 |
Decrease due to the lapsing of statutes of limitations | (175) |  |  | (158) |  |  | (200) |
Decrease due to settlements of prior year tax positions | — |  |  | (1,880) |  |  | — |
Ending balance | $ | 4,460 |  |  | $ | 4,832 |  |  | $ | 4,508 |
We recorded non-current liabilities of $0.6 million and $0.4 million related to interest and penalties on uncertain tax positions in our Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. We included expense of less than $0.1 million for December 31, 2024 and 2023, and expense of $0.1 million for December 31, 2022, for interest and penalties related to unrecognized tax benefits in our Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2024 our uncertain tax liability of $5.1 million, including interest and penalties, was recorded as a reduction to deferred tax assets of $0.5 million, and a non-current liability of $4.6 million in our Consolidated Balance Sheets. The amount of uncertain tax liabilities that are expected to affect our tax rate if recognized were $4.0 million, $4.4 million and $3.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2023 our total uncertain tax liability, including interest and penalties of $5.2 million, was recorded as a reduction to deferred tax assets of $0.1 million and as a non-current liability of $5.1 million in our Consolidated Balance Sheets. We believe it is reasonably possible that approximately $0.2 million of our uncertain tax liability will be recognized in 2025 due to the lapsing of various federal and state and foreign statutes of limitations, of which substantially all would affect the tax rate. Other Our tax years 2019 and forward generally remain open to examination by the major taxing jurisdictions to which we are subject. However, certain returns from years prior to 2019, in which net operating losses and tax credits have arisen, are still open for examination by the tax authorities.

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