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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

8. INCOME TAXES

The Company’s income tax provision (benefit) for the years ended December 31, 2022, 2021 and 2020 are as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Income tax provision (benefit)

 

$

(9,360

)

 

$

13,391

 

 

$

20,187

 

 

The Company’s income (loss) before income tax from domestic and foreign operations for the years ended December 31, 2022, 2021 and 2020 is as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Domestic operations

 

$

(43,179

)

 

 

65,708

 

 

$

94,826

 

Foreign operations

 

 

(236

)

 

 

(2,885

)

 

 

(8,536

)

Total income (loss) before income

 

$

(43,415

)

 

$

62,823

 

 

$

86,290

 

 

The provision (benefit) for income taxes as of December 31, 2022, 2021 and 2020 is as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Federal:

 

 

 

 

 

 

 

 

 

Current

 

$

—

 

 

$

—

 

 

$

—

 

Deferred

 

 

(9,754

)

 

 

11,020

 

 

 

17,464

 

State:

 

 

 

 

 

 

 

 

 

Current

 

 

(90

)

 

 

1,080

 

 

 

128

 

Deferred

 

 

484

 

 

 

1,291

 

 

 

3,023

 

Foreign:

 

 

 

 

 

 

 

 

 

Current

 

 

—

 

 

 

—

 

 

 

(428

)

Deferred

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

(9,360

)

 

$

13,391

 

 

$

20,187

 

 

The Company’s income tax provision (benefit) reconciles to the provision (benefit) at the statutory U.S. federal income tax rate of 21% for the years ended December 31, 2022, 2021 and 2020 , as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Tax provision (benefit) at statutory U.S. federal income tax rate

 

$

(9,117

)

 

$

13,193

 

 

$

18,121

 

State income tax — net of federal income tax benefit

 

 

(3,952

)

 

 

2,144

 

 

 

3,124

 

Adjustment to deferred tax depreciation

 

 

—

 

 

 

(1,414

)

 

 

—

 

Stock based compensation

 

 

(414

)

 

 

(1,318

)

 

 

(1,212

)

Nondeductible officer compensation

 

 

244

 

 

 

1,195

 

 

 

1,212

 

Research and development tax credits

 

 

(518

)

 

 

(642

)

 

 

(674

)

Changes in valuation allowance

 

 

4,365

 

 

 

—

 

 

 

—

 

Other

 

 

32

 

 

 

233

 

 

 

(384

)

Income tax provision (benefit)

 

$

(9,360

)

 

$

13,391

 

 

$

20,187

 

At December 31, 2022 and 2021, the Company had loss carryforwards for federal income tax purposes of $54,376 and $55,554 respectively. Of the loss carryforwards at December 31, 2022 $43,334 expires in 2037 and the remaining $11,042 may be carried forward indefinitely. The Company also has indefinite life carryforwards as a result of interest limitations. Starting in 2022, the Company has research costs attributable to research and development that are currently expensed but are required to be capitalized for U.S. tax purposes and amortized primarily over 5 or 15 years.

At December 31, 2022 and 2021, the Company had gross net operating loss carryforwards for state income tax purposes totaling $188,884 and $157,245, respectively, which expire between 2027 and 2042. The Company has established a valuation allowance that was $5,988 and $1,623 as of December 31, 2022 and 2021, respectively. The Company believes that the remaining net operating losses, net of the valuation allowance, will be fully utilized in future periods.

The Company also has foreign gross net operating loss carryforwards of approximately $69 and $2,469 as of December 31, 2022 and 2021, respectively, which expire between 2023 and 2028. At December 31, 2022 and 2021, a full valuation allowance has been established for the deferred tax asset of $24 and $864 related to foreign net operating loss carryforwards, respectively, as the Company believes it is more likely than not that the net operating loss carryforwards will not be realized.

The Company does not expect that total unrecognized tax benefits will significantly increase or decrease within the next 12 months.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2022, 2021 and 2020 the Company had no interest and penalties recorded.

The Company files income tax returns at the U.S. federal level and in various state and foreign jurisdictions. U.S. federal income tax years prior to 2019 are closed and no longer subject to examination. With few exceptions, the statute of limitations in state taxing jurisdictions in which the Company operates has expired for all years prior to 2018. In foreign jurisdictions in which the Company operates, years prior to 2016 are closed and are no longer subject to examination.

The Company’s deferred tax assets (liabilities) at December 31, 2022 and 2021 are as follows:

 

 

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease assets

 

$

23,200

 

 

$

15,835

 

Accrued liabilities

 

 

5,381

 

 

 

7,130

 

Federal NOLs and interest limitations

 

 

15,042

 

 

 

11,666

 

Foreign NOLs

 

 

24

 

 

 

864

 

State NOLs

 

 

10,291

 

 

 

6,682

 

Research costs

 

 

3,175

 

 

 

—

 

Tax credit carryforwards

 

 

4,411

 

 

 

3,892

 

Valuation allowance

 

 

(6,012

)

 

 

(2,487

)

Total deferred tax assets

 

 

55,512

 

 

 

43,582

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Depreciation and amortization

 

 

(91,923

)

 

 

(96,207

)

Operating lease liabilities

 

 

(22,657

)

 

 

(15,713

)

Other liabilities

 

 

(47

)

 

 

(159

)

Total deferred tax liabilities

 

 

(114,627

)

 

 

(112,079

)

Net noncurrent deferred tax liabilities

 

$

(59,115

)

 

$

(68,497

)

 

Deferred tax assets relate primarily to reserves and other liabilities for costs and expenses not currently deductible for tax purposes as well as net operating loss and other carryforwards. Deferred tax liabilities relate primarily to the cumulative difference between book depreciation and amounts deducted for tax purposes. The Company evaluates its ability to realize deferred tax assets by considering all available positive and negative evidence. This evidence includes its cumulative earnings or losses in recent years. The Company further considers the impact on these cumulative earnings or losses of discontinued operations and other divested operations and joint ventures, restructuring charges and other nonrecurring adjustments that are not indicative of its ability to generate taxable income in future periods. The Company also considers sources of taxable income, such as the amount and timing of realization of its deferred tax liabilities relative to the timing of expiration of loss carryforwards. When it is estimated to be more likely than not that all or some portion of deferred tax assets will not be realized, the Company establishes a valuation allowance for the amount of such deferred tax assets considered to be unrealizable. After evaluating the positive and negative evidence for future realization of deferred tax assets, the Company recorded valuation allowances for foreign net operating loss carryforwards and certain state net operating loss carryforwards to reduce the balance of these deferred tax assets at December 31, 2022 and 2021 as it was more likely than not that the balance of these tax items would not be realized. By contrast, after evaluating the positive and negative evidence, the Company concluded that it was more likely than not that the deferred federal income tax asset and remaining state net operating loss carryforwards recorded at December 31, 2022 and 2021 would ultimately be realized and determined that no valuation allowance was required.