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Income Tax Matters | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Tax Matters | 14. Income Tax Matters The following table presents Income (loss) before income taxes by geographic area (in millions of dollars):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Domestic |  | $ | 53.5 |  |  | $ | 48.0 |  |  | $ | (44.6 | )
Foreign |  |  | 10.0 |  |  |  | 8.3 |  |  |  | 6.7 |
Income (loss) before income taxes |  | $ | 63.5 |  |  | $ | 56.3 |  |  | $ | (37.9 | )
Tax (Provision) Benefit. Income taxes are classified as either domestic or foreign based on whether payment is made or due to the United States or a foreign country. Certain income classified as foreign is also subject to domestic income taxes. The following table presents the components of Income tax (provision) benefit (in millions of dollars):
|  | Federal |  |  | Foreign |  |  | State |  |  | Total |
Year Ended December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (3.5 | ) |  | $ | (3.1 | ) |  | $ | (3.3 | ) |  | $ | (9.9 | )
Deferred |  |  | (10.9 | ) |  |  | 0.6 |  |  |  | 1.3 |  |  | $ | (9.0 | )
Benefit applied to decrease AOCI |  |  | 1.9 |  |  |  | — |  |  |  | 0.3 |  |  | $ | 2.2 |
Income tax (provision) benefit |  | $ | (12.5 | ) |  | $ | (2.5 | ) |  | $ | (1.7 | ) |  | $ | (16.7 | )
Year Ended December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | (2.2 | ) |  | $ | 0.6 |  |  | $ | (1.6 | )
Deferred |  |  | (11.6 | ) |  |  | 0.1 |  |  |  | 1.0 |  |  |  | (10.5 | )
Benefit applied to decrease AOCI |  |  | 2.5 |  |  |  | 0.1 |  |  |  | 0.4 |  |  |  | 3.0 |
Income tax (provision) benefit |  | $ | (9.1 | ) |  | $ | (2.0 | ) |  | $ | 2.0 |  |  | $ | (9.1 | )
Year Ended December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | — |  |  | $ | (1.1 | ) |  | $ | (2.5 | ) |  | $ | (3.6 | )
Deferred |  |  | 8.9 |  |  |  | (0.8 | ) |  |  | 1.6 |  |  |  | 9.7 |
Benefit applied to decrease AOCI |  |  | 1.7 |  |  |  | 0.2 |  |  |  | 0.3 |  |  |  | 2.2 |
Income tax benefit (provision) |  | $ | 10.6 |  |  | $ | (1.7 | ) |  | $ | (0.6 | ) |  | $ | 8.3 |
The following table presents a reconciliation between the (provision) benefit for income taxes and the amount computed by applying the federal statutory income tax rate to Income (loss) before income taxes (in millions of dollars):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Amount of federal income tax (provision) benefit based on the statutory rate |  | $ | (13.3 | ) |  | $ | (11.8 | ) |  | $ | 8.0 |
Decrease in federal valuation allowances |  |  | — |  |  |  | — |  |  |  | 1.1 |
Non-deductible compensation expense |  |  | (2.2 | ) |  |  | (1.6 | ) |  |  | (0.9 | )
Non-deductible (expense) benefit |  |  | (0.2 | ) |  |  | 0.2 |  |  |  | (1.0 | )
State income tax (provision) benefit, net of federal benefit 1 |  |  | (1.4 | ) |  |  | 1.5 |  |  |  | (0.5 | )
Research and development credit |  |  | 1.2 |  |  |  | 3.2 |  |  |  | 2.2 |
Foreign income tax expense |  |  | (0.4 | ) |  |  | (0.3 | ) |  |  | (0.3 | )
Foreign undistributed earnings |  |  | (0.4 | ) |  |  | (0.3 | ) |  |  | (0.3 | )
Income tax (provision) benefit |  | $ | (16.7 | ) |  | $ | (9.1 | ) |  | $ | 8.3 |
1. The total state income tax (provision) benefit, net of federal benefit was ($1.4) million in 2024, which was primarily a result of: (i) a current state income tax provision of ($1.5) million in 2024; (ii) a benefit of $2.9 million due to state NOL, return to provision and tax rate true-ups in various states, partially offset by (iii) an increase to the provision for a state tax valuation allowance of ($2.8) million related to the expiration of certain state net operating losses and credits. The total state income tax (provision) benefit, net of federal benefit was $1.5 million in 2023, which was primarily a result of: (i) a current state income tax provision of ($1.4) million in 2023; (ii) a benefit of $1.9 million due to state NOL and tax rate true-ups in various states; and (iii) a benefit of $1.0 million for a decrease to the state tax valuation allowance related to certain state net operating losses. The total state income tax (provision) benefit, net of federal benefit was ($0.5) million in 2022, which was primarily a result of: (i) a current state income tax benefit of $1.1 million in 2022; (ii) an increase of ($1.5) million to the provision due to state NOL and tax rate true-ups in various states; and (iii) an increase to the provision of ($0.1) million for an increase to the state tax valuation allowance related to the expiration of certain state net operating losses. Deferred Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The following table presents the components of our net deferred income tax assets and liabilities (in millions of dollars):
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
Deferred income tax assets: |  |  |  |  |  |
Loss and credit carryforwards |  | $ | 17.3 |  |  | $ | 39.6 |
Defined benefit plans |  |  | 3.1 |  |  |  | 3.6 |
Other assets |  |  | 35.8 |  |  |  | 36.8 |
Lease assets |  |  | 7.2 |  |  |  | 8.7 |
Inventories |  |  | 39.8 |  |  |  | 29.5 |
Excess interest carryforward |  |  | 10.2 |  |  |  | 14.0 |
Research & development capitalization |  |  | 19.1 |  |  |  | 16.9 |
Valuation allowances |  |  | (5.5 | ) |  |  | (2.7 | )
Total deferred income tax assets |  |  | 127.0 |  |  |  | 146.4 |
Deferred income tax liabilities: |  |  |  |  |  |
Property, plant and equipment |  |  | (133.3 | ) |  |  | (142.6 | )
Lease liabilities |  |  | (7.2 | ) |  |  | (8.7 | )
Undistributed foreign earnings |  |  | (3.4 | ) |  |  | (3.0 | )
Total deferred income tax liabilities |  |  | (143.9 | ) |  |  | (154.3 | )
Net deferred income tax liabilities |  | $ | (16.9 | ) |  | $ | (7.9 | )
Tax Attributes. At December 31, 2024, we had $12.6 million of federal research and development (“R&D”) credit carryforwards to offset regular federal income tax requirements. Our R&D credit carryforwards expire periodically through 2044. We also had $3.9 million of state credit carryforwards that will expire periodically through 2049. In assessing the realizability of deferred tax assets, management considers whether it is “more likely than not” that some portion or all of the deferred tax assets will not be realized. 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. Management considers taxable income in carryback years, the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. Due to uncertainties surrounding the realization of some of our deferred tax assets, primarily including state NOL carryforwards sustained during the prior years and expiring tax benefits, we have a valuation allowance against certain deferred tax assets. When recognized, the tax benefits relating to any reversal of this valuation allowance will be recorded as a reduction of income tax expense. There was an increase in the valuation allowance of $2.8 million in 2024 and a decrease in the valuation allowance of $1.0 million in 2023. The increase in the valuation allowance for 2024 was primarily due to unutilized state NOL and credit carryforwards. The decrease in the valuation allowance for 2023 was primarily due to the expiration of state NOL carryforwards and the related reversal of their valuation allowances. Other. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company has various state income tax examinations that are currently in progress. Generally, with few exceptions, the Company’s 2020 and later tax years remain open for examination by the various state taxing authorities. We have evaluated the effects of the Global anti-Base Erosion rules set forth by the Organization for Economic Co-Operation and Development, referred to as “Pillar 2,” which establishes a global minimum corporate tax rate of 15 percent. We have (i) determined that Pillar 2 legislation has been enacted in one or more of the jurisdictions in which the Company operates and the Company is within the scope of such legislation, (ii) assessed such enacted legislation and, as applicable, the Transitional Safe Harbor provisions for Pillar 2 that apply, and (iii) determined the impact will be immaterial to our financial results. We intend to file a Qualified Country-by-Country Report for the current year for each jurisdiction in which we intend to rely on the Transitional Country-by-Country Reporting Safe Harbor provisions. We have gross unrecognized benefits relating to uncertain tax positions. The following table presents a reconciliation of changes in the gross unrecognized tax benefits (in millions of dollars):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Gross unrecognized tax benefits at beginning of period |  | $ | 6.5 |  |  | $ | 5.0 |  |  | $ | 4.1 |
Gross increases for tax positions of current year |  |  | 0.5 |  |  |  | 1.3 |  |  |  | 0.9 |
Gross increases for tax positions of prior years |  |  | — |  |  |  | 0.2 |  |  |  | 0.1 |
Gross decreases for tax positions of prior years |  |  | (0.1 | ) |  |  | — |  |  |  | (0.1 | )
Gross unrecognized tax benefits at end of period |  | $ | 6.9 |  |  | $ | 6.5 |  |  | $ | 5.0 |
If and when the $6.9 million of gross unrecognized tax benefits at December 31, 2024 are recognized, $6.9 million will be reflected in our income tax provision and thus affect the effective tax rate in future periods. In addition, we recognize interest and penalties related to unrecognized tax benefits in the income tax provision. We had $0.1 million and $0.2 million accrued for interest and penalties at December 31, 2024 and December 31, 2023, respectively, and we recognized interest and penalties of $0.1 million in our tax provision in 2022. Of the amounts accrued, no ne were considered current and, as such, were included in Long-term liabilities on our Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023. We do not expect our gross unrecognized tax benefits to significantly change within the next 12 months.

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