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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 12. INCOME TAXES The components of income (loss) before income taxes for the years ended December 31, 2024, 2023 and 2022 (in millions):
|  | 2024 |  |  | 2023 |  |  | 2022 |
Domestic |  | $ | (40.7 | ) |  | $ | (38.5 | ) |  | $ | 16.7 |
Foreign |  |  | (25.5 | ) |  |  | (3.0 | ) |  |  | 5.6 |
Income (loss) before income taxes |  | $ | (66.2 | ) |  | $ | (41.5 | ) |  | $ | 22.3 |
The income tax expense (benefit) from continuing operations for the years ended December 31, 2024, 2023 and 2022 (in millions):
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | 6.0 |  |  | $ | (1.0 | ) |  | $ | 6.3 |
State |  |  | 1.7 |  |  |  | 0.5 |  |  |  | 1.6 |
Foreign |  |  | 6.7 |  |  |  | 1.5 |  |  |  | 1.6 |
|  | $ | 14.4 |  |  | $ | 1.0 |  |  | $ | 9.5 |
Deferred |  |  |  |  |  |  |  |  |
Federal |  | $ | (4.9 | ) |  | $ | (5.6 | ) |  | $ | (1.8 | )
State |  |  | (2.1 | ) |  |  | (2.0 | ) |  |  | — |
Foreign |  |  | (3.3 | ) |  |  | (1.8 | ) |  |  | 1.2 |
|  |  | (10.3 | ) |  |  | (9.4 | ) |  |  | (0.6 | )
Income tax expense (benefit) |  | $ | 4.1 |  |  | $ | (8.4 | ) |  | $ | 8.9 |
The income tax expense (benefit) differs from the amount of income tax expense (benefit) determined by applying the Company’s federal corporate income tax rate of 21% to pre-tax income for the years ended December 31, 2024, 2023 and 2022 due to the following (in millions):
|  | 2024 |  |  | 2023 |  |  | 2022 |
Computed “expected” income tax expense (benefit) |  | $ | (13.9 | ) |  | $ | (8.7 | ) |  | $ | 4.7 |
Change in income tax resulting from: |  |  |  |  |  |  |  |  |
State taxes, net of federal benefit |  |  | (5.3 | ) |  |  | (1.3 | ) |  |  | 1.0 |
Change in fair value of earnout |  |  | (0.2 | ) |  |  | 0.2 |  |  |  | (0.4 | )
Non-deductible executive compensation |  |  | 0.7 |  |  |  | 1.8 |  |  |  | 2.1 |
Non-deductible expenses |  |  | 0.2 |  |  |  | 0.3 |  |  |  | 0.2 |
Foreign GILTI income |  |  | (0.1 | ) |  |  | (0.5 | ) |  |  | 0.4 |
Foreign Permanent Differences including U.S. GAAP to Statutory Differences |  |  | (2.2 | ) |  |  | (1.5 | ) |  |  | — |
Foreign rate differential |  |  | (1.9 | ) |  |  | — |  |  |  | — |
Foreign Withholdings |  |  | 0.6 |  |  |  | 0.5 |  |  |  | 0.1 |
Foreign non-deductible expenses |  |  | 10.0 |  |  |  | — |  |  |  | — |
Other foreign permanent differences |  |  | 1.0 |  |  |  | — |  |  |  | (0.2 | )
Discontinued operations transaction costs |  |  | 0.1 |  |  |  | 0.2 |  |  |  | 0.1 |
Change in valuation allowance |  |  | 13.2 |  |  |  | 1.8 |  |  |  | 1.7 |
Change in tax rate |  |  | 0.9 |  |  |  | (0.8 | ) |  |  | (0.6 | )
Disposal of subsidiary tax benefit |  |  | (9.8 | ) |  |  | — |  |  |  | — |
Stock compensation |  |  | 2.7 |  |  |  | 1.2 |  |  |  | 1.6 |
Change in unrecognized tax benefits |  |  | 15.8 |  |  |  | (0.1 | ) |  |  | (2.3 | )
Impairment |  |  | 5.9 |  |  |  | — |  |  |  | — |
Worthless stock deduction |  |  | (13.9 | ) |  |  | (0.7 | ) |  |  | — |
Other |  |  | 0.3 |  |  |  | (0.8 | ) |  |  | 0.5 |
|  | $ | 4.1 |  |  | $ | (8.4 | ) |  | $ | 8.9 |
The components of the deferred tax assets and liabilities at December 31, 2024 and 2023 consist of the following (in millions):
|  |  | 2024 |  |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Accrued expenses |  | $ | 1.7 |  |  | $ | 1.9 |
Accounts receivable |  |  | 0.6 |  |  |  | 0.5 |
Net operating loss carryforward |  |  | 4.9 |  |  |  | 4.6 |
Stock-based compensation |  |  | 2.4 |  |  |  | 2.7 |
Interest expense carryforward |  |  | 1.1 |  |  |  | 1.4 |
Lease obligations |  |  | 13.3 |  |  |  | 13.0 |
Capital loss |  |  | 11.9 |  |  |  | — |
Other |  |  | 1.3 |  |  |  | 1.2 |
Total deferred tax assets |  |  | 37.2 |  |  |  | 25.3 |
Valuation allowance |  |  | (14.2 | ) |  |  | (3.4 | )
Net deferred tax assets |  | $ | 23.0 |  |  | $ | 21.9 |
Deferred tax liabilities: |  |  |  |  |  |
Intangible assets |  | $ | (45.5 | ) |  | $ | (53.1 | )
Property and equipment |  |  | (1.7 | ) |  |  | (2.8 | )
Lease assets |  |  | (10.8 | ) |  |  | (10.7 | )
Other |  |  | (1.2 | ) |  |  | (1.8 | )
Total deferred tax liabilities |  |  | (59.2 | ) |  |  | (68.4 | )
Net deferred tax liabilities |  | $ | (36.2 | ) |  | $ | (46.5 | )
Reported as: |  |  |  |  |  |
Deferred tax assets |  | $ | 2.7 |  |  | $ | 0.3 |
Accounts payable and accrued expenses |  |  | (0.4 | ) |  |  | — |
Deferred tax liabilities |  |  | (38.4 | ) |  |  | (46.8 | )
Net Deferred tax liabilities |  | $ | (36.2 | ) |  | $ | (46.5 | )
As of December 31, 2024, the Company has certain U.S. federal, U.S. state and foreign net operating loss carryforwards of approximately $17.0 million, $65.8 million, and $12.2 million, respectively, available to offset future taxable income. The state net operating loss carryforwards will expire during the years 2029 through 2043, to the extent they are not utilized. The net operating loss carryforwards includes the U.S. and state losses on as filed tax return basis which includes the impact of the worthless stock deduction. The foreign net operating loss carryforwards will expire during the years 2027 through 2038 in va rious jurisdictions; in various other jurisdictions, net operating loss carryforwards do not expire. Utilization of the Company’s state net operating loss may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code (the "Code") or similar state provisions. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization. As of December 31, 2024, the Company believes that utilization of its federal and state net operating losses are not limited under any ownership change limitations provided under the Code or under similar state statutes. Due to the enactment of Tax Cuts and Jobs Act (“the Tax Act”) in December 2017, the Company is subject to a tax on global intangible low-taxed income (“GILTI”). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. Companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences including outside basis differences expected to reverse as GILTI. The Company has elected to account for GILTI as a period cost, and therefore has included GILTI expense in its effective tax rate calculation for the period. The Company periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets is highly subjective and requires significant judgment. The Company has considered the following possible sources of taxable income when assessing the realization of the deferred tax assets: (1) future reversals of existing taxable temporary differences; (2) taxable income in prior carryback years; (3) future taxable income exclusive of reversing temporary differences and carryforwards; and (4) tax planning strategies. Based on the Company’s analysis and a review of all positive and negative evidence such as historical operations, future projections of taxable income and tax planning strategies that are prudent and feasible, the Company has determined that it is more likely than not that certain foreign deferred tax assets of approximately $1.1 million at December 31, 2024 will not be realized and therefore the Company has established a valuation allowance on those assets. In addition, the Company has a capital loss generated from the sale of subsidiaries during 2024. The Company has determined that it is more likely than not that its capital loss generated of $11.9 million will not be utilized and accordingly has recorded a valuation allowance of $11.9 million. In addition, the Company has determined that it is more likely than not its foreign tax credits carryovers of $1.2 million will not be utilized and accordingly has recorded a valuation allowance of $1.2 million. The Company addresses uncertainty in tax positions according to the provisions of ASC 740, “Income Taxes”, which clarifies the accounting for income taxes by establishing the minimum recognition threshold and a measurement attribute for tax positions taken or expected to be taken in a tax return in order to be recognized in the financial statements. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions):
|  | Amount |
Balance at December 31, 2022 |  | $ | 2.9 |
Decrease in balances related to prior year tax positions |  |  | (0.3 | )
Interest accrued |  |  | 0.2 |
Balance at December 31, 2023 |  | $ | 2.8 |
Decrease in balances related to prior year tax positions |  |  | (3.0 | )
Increase in balances related to current year tax positions |  |  | 17.5 |
Balance at December 31, 2024 |  | $ | 17.3 |
As of December 31, 2024, the Company had $17.3 million of gross unrecognized tax benefits for uncertain tax positions, of which all $18.0 million would affect the effective tax rate if recognized. As of December 31, 2024, the Company does no t anticipate that the amount of unrecognized tax benefits to decrease within the next 12 months. The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. As of December 31, 2024, the Company had no accrued interest and penalties related to uncertain tax positions. The Company is subject to taxation in the United States, various states and various foreign jurisdictions. The tax years 2021 to 2024 and 2020 to 2023 remain open to examination by federal and state taxing jurisdictions, respectively. For foreign jurisdictions, the tax years 2011 to 2023 may remain open to examination by certain foreign jurisdictions. The Company intends to indefinitely reinvest its unremitted earnings in its foreign subsidiaries. The Company has not determined at this time an estimate of total amount of other entities unremitted earnings, as it is not practical at this time.

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