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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

8. INCOME TAXES

The Company’s income tax provision (benefit) for the years ended December 31, 2024, 2023 and 2022 are as follows:

 

 

2024

 

 

2023

 

 

2022

 

Income tax (provision) benefit

 

$

18,120

 

 

$

4,406

 

 

$

(9,360

)

 

The Company’s income (loss) before income tax from domestic and foreign operations for the years ended December 31, 2024, 2023 and 2022 are as follows:

 

 

2024

 

 

2023

 

 

2022

 

Domestic operations

 

$

77,285

 

 

 

19,549

 

 

$

(43,179

)

Foreign operations

 

 

(1,900

)

 

 

(1,237

)

 

 

(236

)

Total income (loss) before income taxes

 

$

75,385

 

 

$

18,312

 

 

$

(43,415

)

 

The provision (benefit) for income taxes as of December 31, 2024, 2023 and 2022 is as follows:

 

 

2024

 

 

2023

 

 

2022

 

Federal:

 

 

 

 

 

 

 

 

 

Current

 

$

156

 

 

$

—

 

 

$

—

 

Deferred

 

 

15,814

 

 

 

3,292

 

 

 

(9,754

)

State:

 

 

 

 

 

 

 

 

 

Current

 

 

1,780

 

 

 

422

 

 

 

(90

)

Deferred

 

 

584

 

 

 

442

 

 

 

484

 

Foreign:

 

 

 

 

 

 

 

 

 

Current

 

 

(214

)

 

 

250

 

 

 

—

 

Deferred

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

18,120

 

 

$

4,406

 

 

 

(9,360

)

 

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, 2024, 2023 and 2022, as follows:

 

 

2024

 

 

2023

 

 

2022

 

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

 

$

15,831

 

 

$

3,846

 

 

$

(9,117

)

State income tax — net of federal income tax benefit

 

 

1,990

 

 

 

774

 

 

 

(3,952

)

Adjustment to deferred tax depreciation

 

 

—

 

 

 

—

 

 

 

—

 

Stock based compensation

 

 

132

 

 

 

315

 

 

 

(414

)

Nondeductible officer compensation

 

 

894

 

 

 

178

 

 

 

244

 

Research and development tax credits

 

 

(600

)

 

 

(796

)

 

 

(518

)

Changes in valuation allowance

 

 

—

 

 

 

—

 

 

 

4,365

 

Other

 

 

(127

)

 

 

89

 

 

 

32

 

Income tax provision (benefit)

 

$

18,120

 

 

$

4,406

 

 

$

(9,360

)

At December 31, 2024 and 2023, the Company had loss carryforwards for federal income tax purposes of $2.9 million and $14.0 million respectively. The loss carryforwards at December 31, 2024 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, 2024 and 2023, the Company had gross net operating loss carryforwards for state income tax purposes totaling $184.5 million and $182.4 million, respectively, which expire between 2029 and 2044. The Company has established a valuation allowance that was $7.3 million and $6.6 million as of December 31, 2024 and 2023, 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 no foreign gross net operating loss carryforwards as of December 31, 2024 and 2023, respectively

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, 2024, 2023 and 2022 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 2021 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 2020. In foreign jurisdictions in which the Company operates, years prior to 2018 are closed and are no longer subject to examination.

The Company’s deferred tax assets (liabilities) at December 31, 2024 and 2023 are as follows:

 

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Operating lease assets

 

$

25,753

 

 

$

23,685

 

Accrued liabilities

 

 

5,030

 

 

 

7,378

 

Federal NOLs and interest limitations

 

 

4,364

 

 

 

4,979

 

State NOLs

 

 

10,216

 

 

 

9,953

 

Research costs

 

 

7,681

 

 

 

5,193

 

Tax credit carryforwards

 

 

5,292

 

 

 

5,457

 

Valuation allowance

 

 

(7,315

)

 

 

(6,558

)

Total deferred tax assets

 

 

51,021

 

 

 

50,087

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Depreciation and amortization

 

 

(104,643

)

 

 

(88,906

)

Operating lease liabilities

 

 

(25,308

)

 

 

(23,245

)

Other liabilities

 

 

(55

)

 

 

(168

)

Total deferred tax liabilities

 

 

(130,006

)

 

 

(112,319

)

Net noncurrent deferred tax liabilities

 

$

(78,985

)

 

$

(62,232

)

 

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, 2024 and 2023 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, 2024 and 2023 would ultimately be realized and determined that no valuation allowance was required.