XML 32 R22.htm IDEA: XBRL DOCUMENT v3.23.3
Note 14 - Income Taxes
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 14 INCOME TAXES

 

Income tax (benefit) expense for the three and nine months ended September 30, 2023 and September 30, 2022 varies from the amount that would result by applying the applicable U.S. federal corporate income tax rate of 21% to (loss) income from continuing operations before income tax (benefit) expense. The following table summarizes the differences:

 

(in thousands)

 

Three months ended September 30,

  

Nine months ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Income tax expense (benefit) at U. S. statutory income tax rate

 $(187) $9,450  $5,456  $7,856 

Valuation allowance

  (212)  (9,609)  (5,876)  (9,140)

Non-deductible compensation

  166   695   232   763 

Investment income

  (54)  (161)  29   (172)

State income tax

  80   2,488   690   2,683 

Indefinite life intangibles

  59   (78)  198   29 

Disposition of subsidiary

  18   3,267   18   3,267 

Contingent consideration

  —   4   14   319 

Other

  28   5   49   15 

Income tax expense

 $(102) $6,061  $810  $5,620 

 

The Company maintains a valuation allowance for its gross deferred tax assets at September 30, 2023 and December 31, 2022. The Company's operations have generated substantial operating losses in prior years. These losses can be available to reduce income taxes that might otherwise be incurred on future taxable income; however, it is uncertain whether the Company will generate the taxable income necessary to utilize these losses or other reversing temporary differences. This uncertainty has caused management to place a full valuation allowance on its September 30, 2023 and December 31, 2022 net deferred tax asset, excluding the deferred income tax liability amounts set forth in the paragraph below which were determined to not reverse and offset existing deferred tax assets.  For each of the three months ended  September 30, 2023 and  September 30, 2022, the Company released into income $0.3 million ($0.3 million and $0.8 million for the nine months ended  September 30, 2023 and  September 30, 2022, respectively), of its valuation allowance associated with business interest expense carryforwards with an indefinite life and deferred tax liabilities from acquisitions.

 

The Company carries net deferred income tax liabilities of $4.5 million and $4.2 million at September 30, 2023 and December 31, 2022, respectively, that consists of:

 

 

•

$4.0 million and $3.8 million of deferred income tax liabilities related to indefinite lived intangible assets; and

 

•

$0.5 million and $0.4 million of deferred state income tax liabilities.

 

As of September 30, 2023 and December 31, 2022, the Company carried a liability for unrecognized tax benefits of zero. The Company classifies interest and penalty accruals, if any, related to unrecognized tax benefits as income tax expense.  The Company recorded income tax expense of zero and less than $0.1 million related to interest and penalty accruals for the three months ended  September 30, 2023 and  September 30, 2022, respectively (zero and $0.1 million for the nine months ended  September 30, 2023 and  September 30, 2022, respectively).