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Supplemental Information | 9 Months Ended
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Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Supplemental Information | Supplemental InformationImpairment and Other Losses The Company recognized a charge of $19,159 for the nine months ended September 30, 2020 consisting of a goodwill impairment of $13,382 and an impairment of right-of-use lease assets and losses of $5,777. Given the impact of the COVID-19 pandemic, the Company performed an interim goodwill impairment test in the second quarter of 2020 that resulted in a goodwill impairment, as discussed above, and the fair value of one reporting unit, with goodwill of approximately $130,780, exceeding its carrying value by a minimal percentage. If the duration of the COVID-19 pandemic is longer and the operational impact is greater than estimated, the Company could recognize an impairment of goodwill in the future. The Company used an income approach to measure its goodwill for impairment. This methodology incorporates the use of the discounted cash flow method. The income approach requires the exercise of significant judgment and inputs, including judgment about the amount and timing of expected future cash flows, assumed terminal value and appropriate discount rates. See Note 6 of the Notes to the Unaudited Condensed Consolidated Financial Statements included herein for additional information regarding the impairment of right-of-use lease assets and losses. During the first quarter of 2020, the Company reassessed its estimate of the useful life of a trademark in the amount of $14,600, acquired as a result of a business combination. The Company revised the useful life to 5 years from indefinite lived. Income Taxes Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in interim periods. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted into law and the new legislation contains several key tax provisions, including the five-year net operating loss carryback, an adjusted business interest limitation, and payroll tax deferral. The Company is required to recognize the effect of tax law changes in the period of enactment, which required the Company to reassess the net realizability of its deferred tax assets and liabilities. The Company has assessed the applicability of the CARES Act and determined there is no impact. The Company had an income tax expense for the three months ended September 30, 2020 of $1,452 (on a pre-tax income of $16,287 resulting in an effective tax rate of 8.9%) compared to income tax expense of $3,457 (on pre-tax income of $8,907 resulting in an effective tax rate of 38.8%) for the three months ended September 30, 2019. The difference in effective tax rate of 8.9% in the three months ended September 30, 2020 as compared to 38.8% in the same period in 2019 results from a decrease in the estimated annual effective tax rate which is applied to the pre-tax income in the current period. Such decrease was primarily attributable to an increase in forecasted foreign earnings for which there is no tax expense provided due to valuation allowance, partially offset by an increase in base erosion and anti-abuse tax (“BEAT”). The Company had income tax expense for the nine months ended September 30, 2020 of $7,029 (on pre-tax income of $26,964 resulting in an effective tax rate of 26.1%) compared to an expense of $6,292 (on pre-tax income of $19,102 resulting in an effective tax rate of 32.9%) for the nine months ended September 30, 2019. The difference in effective tax rate of 26.1% in the nine months ended September 30, 2020 as compared to 32.9% in same period in 2019 results from a decrease in the estimated annual effective tax rate which is applied to the pre-tax income in the current period, such decrease primarily attributable to an increase in forecasted foreign earnings for which there is no tax expense provided due to valuation allowance, partially offset by an increase in base erosion and anti-abuse tax (“BEAT”). Payroll Taxes In accordance with the payroll tax deferral provision under the CARES Act, the Company is deferring the employer portion of the social security payroll tax of 6.2%. The Company anticipates the deferral through December 31, 2020 to be approximately $16,000 which is payable in equal installments on December 31, 2021 and 2022.

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