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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

8. INCOME TAXES

The Company’s income tax provision (benefit) for the years ended December 31, 2023, 2022 and 2021 are as follows:

 

 

2023

 

 

2022

 

 

2021

 

Income tax provision (benefit)

 

$

4,406

 

 

$

(9,360

)

 

$

13,391

 

 

The Company’s income (loss) before income tax from domestic and foreign operations for the years ended December 31, 2023, 2022 and 2021 is as follows:

 

 

2023

 

 

2022

 

 

2021

 

Domestic operations

 

$

19,549

 

 

$

(43,179

)

 

$

65,708

 

Foreign operations

 

 

(1,237

)

 

 

(236

)

 

 

(2,885

)

Total income (loss) before income tax

 

$

18,312

 

 

$

(43,415

)

 

$

62,823

 

 

The provision (benefit) for income taxes as of December 31, 2023, 2022 and 2021 is as follows:

 

 

2023

 

 

2022

 

 

2021

 

Federal:

 

 

 

 

 

 

 

 

 

Current

 

$

—

 

 

$

—

 

 

$

—

 

Deferred

 

 

3,292

 

 

 

(9,754

)

 

 

11,020

 

State:

 

 

 

 

 

 

 

 

 

Current

 

 

422

 

 

 

(90

)

 

 

1,080

 

Deferred

 

 

442

 

 

 

484

 

 

 

1,291

 

Foreign:

 

 

 

 

 

 

 

 

 

Current

 

 

250

 

 

 

—

 

 

 

—

 

Deferred

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

4,406

 

 

$

(9,360

)

 

$

13,391

 

 

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, 2023, 2022 and 2021, as follows:

 

 

2023

 

 

2022

 

 

2021

 

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

 

$

3,846

 

 

$

(9,117

)

 

$

13,193

 

State income tax — net of federal income tax benefit

 

 

774

 

 

 

(3,952

)

 

 

2,144

 

Adjustment to deferred tax depreciation

 

 

—

 

 

 

—

 

 

 

(1,414

)

Stock based compensation

 

 

315

 

 

 

(414

)

 

 

(1,318

)

Nondeductible officer compensation

 

 

178

 

 

 

244

 

 

 

1,195

 

Research and development tax credits

 

 

(796

)

 

 

(518

)

 

 

(642

)

Changes in valuation allowance

 

 

—

 

 

 

4,365

 

 

 

—

 

Other

 

 

89

 

 

 

32

 

 

 

233

 

Income tax provision (benefit)

 

$

4,406

 

 

$

(9,360

)

 

$

13,391

 

At December 31, 2023 and 2022, the Company had loss carryforwards for federal income tax purposes of $14,012 and $54,376 respectively. Of the loss carryforwards at December 31, 2023 $996 expires in 2037 and the remaining $13,016 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, 2023 and 2022, the Company had gross net operating loss carryforwards for state income tax purposes totaling $182,445 and $188,884, respectively, which expire between 2027 and 2043. The Company has established a valuation allowance that was $6,558 and $5,988 as of December 31, 2023 and 2022, 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 zero and $69 as of December 31, 2023 and 2022, respectively, which expire between 2023 and 2028. At December 31, 2023 and 2022, a full valuation allowance has been established for the deferred tax asset of zero and $24 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, 2023, 2022 and 2021 the Company had no interest and penalties recorded.

The Organisation for Economic Co-operation and Development has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 countries. During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. The Company will continue to analyze the law to determine potential impacts. At this time, the Company does not expect the Pillar 2 legislation to have a material impact on its consolidated financial statements.

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 2020 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 2019. In foreign jurisdictions in which the Company operates, years prior to 2017 are closed and are no longer subject to examination.

The Company’s deferred tax assets (liabilities) at December 31, 2023 and 2022 are as follows:

 

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease assets

 

$

23,685

 

 

$

23,200

 

Accrued liabilities

 

 

7,378

 

 

 

5,381

 

Federal NOLs and interest limitations

 

 

4,979

 

 

 

15,042

 

Foreign NOLs

 

 

—

 

 

 

24

 

State NOLs

 

 

9,953

 

 

 

10,291

 

Research costs

 

 

5,193

 

 

 

3,175

 

Tax credit carryforwards

 

 

5,457

 

 

 

4,411

 

Valuation allowance

 

 

(6,558

)

 

 

(6,012

)

Total deferred tax assets

 

 

50,087

 

 

 

55,512

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Depreciation and amortization

 

 

(88,906

)

 

 

(91,923

)

Operating lease liabilities

 

 

(23,245

)

 

 

(22,657

)

Other liabilities

 

 

(168

)

 

 

(47

)

Total deferred tax liabilities

 

 

(112,319

)

 

 

(114,627

)

Net noncurrent deferred tax liabilities

 

$

(62,232

)

 

$

(59,115

)

 

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, 2023 and 2022 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, 2023 and 2022 would ultimately be realized and determined that no valuation allowance was required.