XML 41 R23.htm IDEA: XBRL DOCUMENT v3.24.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
 
The Company’s operations are conducted through various subsidiaries in a number of countries throughout the world. The Company has provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned.
 
Income tax expense (benefit). Pre-tax income (loss) for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands): 
 202320222021
Canada operations  $5,524 $3,040 $2,498 
Foreign operations34,839 7,692 3,375 
Total$40,363 $10,732 $5,873 
 
The components of the income tax expense (benefit) for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands): 
 202320222021
Current:
Canada 
$142 $31 $141 
Foreign3,685 194 165 
Total$3,827 $225 $306 
Deferred:
Canada 
$— $— $— 
Foreign6,806 4,177 3,070 
Total$6,806 $4,177 $3,070 
Net income tax expense (benefit)$10,633 $4,402 $3,376 
The net income tax expense (benefit) differs from an amount computed at Canadian statutory rates as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands):
 202320222021
Canadian federal tax benefit at statutory rates $6,054 15.0 %$1,610 15.0 %$779 13.3 %
Canadian provincial income tax497 1.2 %282 2.6 %215 3.7 %
Effect of foreign income tax, net 5,481 13.6 %1,809 16.9 %1,189 20.2 %
Valuation allowance (2,556)(6.3)%153 1.4 %1,028 17.5 %
Noncontrolling interest125 0.3 %(562)(5.2)%— — %
Non-deductible compensation1,009 2.5 %808 7.5 %526 9.0 %
Unrealized intercompany foreign currency translation gain(148)(0.4)%(250)(2.3)%(708)(12.1)%
Deemed income from foreign subsidiaries322 0.8 %331 3.1 %297 5.1 %
Other, net(151)(0.4)%221 2.0 %50 0.8 %
Net income tax expense (benefit)$10,633 26.3 %$4,402 41.0 %$3,376 57.5 %
 
Deferred Tax Liabilities and Assets. The significant items giving rise to the deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows (in thousands): 
 20232022
Deferred tax assets:
Net operating loss 
$54,274 $75,326 
Employee benefits 
1,796 2,810 
Deductible goodwill and other intangibles 
48,201 48,432 
Land3,461 3,159 
Other reserves 
7,890 7,439 
Deferred revenue 2,381 — 
Operating lease liabilities
3,199 4,133 
Capital losses2,036 1,930 
Other 
1,770 2,303 
Deferred tax assets125,008 145,532 
Valuation allowance 
(78,769)(82,905)
Deferred tax assets, net 
$46,239 $62,627 
Deferred tax liabilities:
Intangibles$(18,949)$(20,098)
Depreciation(36,048)(43,394)
Operating lease right-of-use assets
(3,045)(3,913)
Deferred tax liabilities 
(58,042)(67,405)
Net deferred tax liabilities, net$(11,803)$(4,778)

At December 31, 2023 and 2022, we had no undistributed earnings of foreign subsidiaries that would be subject to income tax upon distribution to Canada from a foreign subsidiary. As such, as of December 31, 2023 and 2022, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries.

NOL Carryforwards. The following table summarizes net operating loss (NOL) carryforwards at December 31, 2023 (in thousands): 
 AmountExpiration Period
Net operating loss carryforwards:
Canada – Federal and provincial$144,242 Begins to expire in 2035
U.S. – Federal  34,028 Begins to expire in 2036
U.S. – Federal  30,655 Does not expire
U.S. – State, tax effected6,073 Begins to expire in 2024
 
Change in Valuation Allowance. Realization of our deferred tax assets is dependent upon, among other things, our ability to generate taxable income of the appropriate character in the future.
 
Changes in our valuation allowance for the years ended December 31, 2023 and 2022 are as follows (in thousands): 
 
Balance as of December 31, 2021$(85,351)
Change in income tax provision(153)
Other change(1,178)
Foreign currency translation3,777 
Balance as of December 31, 2022(82,905)
Change in income tax provision2,556 
Other change1,767 
Foreign currency translation(187)
Balance as of December 31, 2023$(78,769)
 
As of each reporting date, management considers new evidence, both positive and negative, that could affect our view of the future realization of deferred tax assets. As of December 31, 2023, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Canadian and U.S. net deferred tax assets are realizable, therefore we have maintained the valuation allowance in both of these jurisdictions. As of December 31, 2023, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Australia deferred tax assets related to certain capital assets are realizable, therefore we have maintained a partial valuation allowance in Australia.

Unrecognized Tax Benefits. We file tax returns in the jurisdictions in which they are required. All of these returns are subject to examination or audit and possible adjustment as a result of assessments by taxing authorities. We believe that we have recorded sufficient tax liabilities and do not expect the resolution of any examination or audit of our tax returns to have a material adverse effect on our operating results, financial condition or liquidity.
 
Our Canadian federal tax returns subsequent to 2018 are subject to audit by the Canada Revenue Agency. Our Australian subsidiary’s federal income tax returns subsequent to 2018 are open for review by the Australian Taxation Office. Our U.S. subsidiary’s federal tax returns subsequent to 2019 are subject to audit by the U.S. Internal Revenue Service.
 
The total amount of unrecognized tax benefits as of December 31, 2023, 2022 and 2021 was zero. Unrecognized tax benefits, if recognized, would affect the effective tax rate. We accrue interest and penalties, if applicable, related to unrecognized tax benefits as a component of our provision for income taxes. As of December 31, 2023, 2022 and 2021, we had accrued zero of interest expense and penalties.