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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 12 — INCOME TAXES The income tax (benefit) provision were calculated based upon the following components of income before income taxes:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. (loss) income |  | $ | (64.5 | ) |  | $ | 0.7 |  |  | $ | 9.0 |
Foreign (loss) income |  |  | (1.8 | ) |  |  | 1.8 |  |  |  | 1.6 |
Total (loss) income before taxes |  | $ | (66.3 | ) |  | $ | 2.5 |  |  | $ | 10.6 |
The income tax (benefit) expense consisted of the following:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 1.7 |  |  | $ | 0.7 |  |  | $ | 1.9 |
U.S. state |  |  | 3.9 |  |  |  | 1.7 |  |  |  | 0.6 |
Foreign |  |  | — |  |  |  | 0.4 |  |  |  | — |
Deferred |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (2.1 | ) |  |  | (5.2 | ) |  |  | (0.7 | )
U.S. state |  |  | (7.5 | ) |  |  | (5.3 | ) |  |  | (0.8 | )
Foreign |  |  | (0.2 | ) |  |  | 1.3 |  |  |  | 0.3 |
Total income tax (benefit) expense |  | $ | (4.2 | ) |  | $ | (6.4 | ) |  | $ | 1.3 |
The reconciliation of the income tax (benefit) expense in the consolidated financial statements and the amount computed by applying the statutory U.S. federal and state related income tax rates to the pre-tax (loss) income before income taxes was as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Income tax (benefit) expense at statutory U.S. federal rate |  | $ | (13.9 | ) |  | $ | 0.5 |  |  | $ | 2.2 |
Income tax (benefit) expense at statutory U.S. states rate, net |  |  | (2.8 | ) |  |  | 0.2 |  |  |  | (0.4 | )
Permanent differences: |  |  |  |  |  |  |  |  |
Foreign rate differential |  |  | (0.1 | ) |  |  | 0.1 |  |  |  | 0.1 |
Valuation allowance |  |  | 12.4 |  |  |  | (8.8 | ) |  |  | 0.8 |
Fixed asset basis adjustments |  |  | — |  |  |  | — |  |  |  | (1.6 | )
Other |  |  | 0.2 |  |  |  | 1.6 |  |  |  | 0.2 |
Total income tax (benefit) expense |  | $ | (4.2 | ) |  | $ | (6.4 | ) |  | $ | 1.3 |
For the year ended December 31, 2024, the income tax benefit was primarily attributable to the Company's pre-tax losses partially offset by a valuation allowance against a portion of the deferred tax asset relating to U.S. disallowed interest expense carryforwards created by the provisions of the Tax Cuts and Jobs Act of 2018 ("TCJA"). During the year ended December 31, 2023, the income tax benefit was primarily attributable to the release of the valuation allowance on certain U.S. federal and state deferred tax assets. The effective tax rate for the years ended December 31, 2024, 2023 and 2022 was 6.3%, (256.0)% and 12.3%, respectively. The effective income tax rate in 2024 and 2023 is primarily the result of the discrete items noted above. The effective tax rate in 2022 was primarily related to income tax expense associated with tax filing jurisdictions with no associated valuation allowance. The Company intends to indefinitely reinvest the undistributed earnings of our foreign subsidiaries and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs. The undistributed earnings of foreign subsidiaries and related unrecognized deferred tax liability are not material as of December 31, 2024 and 2023. If the Company determines that all or a portion of such foreign earnings are no longer indefinitely reinvested, the Company may be subject to foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax. The components of deferred tax assets and liabilities were as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Deferred Tax Assets |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 34.4 |  |  | $ | 41.3 |
Deferred revenue |  |  | 0.5 |  |  |  | 0.6 |
Accounts receivable and inventories |  |  | 6.6 |  |  |  | 6.6 |
Accrued liabilities |  |  | 3.7 |  |  |  | 4.8 |
Lease liability |  |  | 39.9 |  |  |  | 39.1 |
Interest limitation carryforward |  |  | 35.6 |  |  |  | 20.5 |
Deferred payroll taxes and other |  |  | 3.6 |  |  |  | 2.0 |
Gross deferred tax assets |  | $ | 124.3 |  |  | $ | 114.9 |
Valuation allowance |  |  | (12.4 | ) |  |  | — |
Deferred tax assets |  | $ | 111.9 |  |  | $ | 114.9 |
Deferred Tax Liabilities |  |  |  |  |  |
Property and equipment |  |  | (62.9 | ) |  |  | (73.5 | )
Goodwill & intangibles |  |  | (1.2 | ) |  |  | (2.2 | )
Prepaid expenses |  |  | (1.7 | ) |  |  | (1.4 | )
Lease right-of-use assets |  |  | (39.2 | ) |  |  | (37.6 | )
Gross deferred tax liabilities |  | $ | (105.0 | ) |  | $ | (114.7 | )
Deferred tax (liabilities) assets, net |  | $ | 6.9 |  |  | $ | 0.2 |
For the years ended December 31, 2024 and 2023, the net change in the valuation allowance was an increase of $12.4 million and decrease of $8.8 million, respectively. The valuation allowance increased in 2024 due to the aforementioned valuation allowance against a portion of the deferred tax asset relating to U.S. disallowed interest expense carryforwards. The decrease in 2023 was due to the release of the valuation allowance on certain U.S. federal and state deferred tax assets. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets as well as the nature of the deferred tax attribute to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis. All of the factors that the Company considers in evaluating whether and when to establish or release all or a portion of the deferred tax asset valuation allowance involve significant judgment. As of December 31, 2024 and 2023, the Company had federal net operating tax loss carryforwards of approximately $160.9 million and $194.6 million, respectively, primarily due to taking bonus depreciation. These federal net operating tax loss carryforwards may be carried forward indefinitely and are eligible to offset 80% of future taxable income. The Company also has Canadian and state net operating loss carryforwards of $2.1 million and $9.2 million, respectively, with varying carryforward expiration periods ranging from 2040 to 2045. The Company has open tax years from 2021 through 2024 for U.S. federal and Canadian income taxes. The Company also files tax returns in numerous states for which various tax years are subject to examination and currently involved in audits. Typically states remain open for three years from filing, with the majority of the open years being 2021 to 2024.

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