XML 34 R19.htm IDEA: XBRL DOCUMENT v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities from continuing operations are as follows at the respective year ends: 
(in thousands)20232022
Deferred income tax assets:  
Inventory valuation reserves$1,829 $963 
Inventory capitalization360 907 
Accrued bonus127 150 
State net operating loss carryforwards2,239 1,572 
Federal net operating loss carryforwards2,209 1,088 
Lease liabilities7,415 7,744 
Interest Limitation Carryforwards1,396 555 
Intangible asset basis differences2,564 3,262 
Other1,932 1,192 
Total deferred income tax assets20,071 17,433 
State valuation allowance(1,641)(1,371)
       Total net deferred income tax assets18,430 16,062 
Deferred income tax liabilities:
Fixed asset basis differences5,478 7,184 
Prepaid expenses445 418 
Lease assets6,699 7,107 
Total deferred income tax liabilities12,622 14,709 
Deferred income taxes, net$5,808 $1,353 

Significant components of the provision for income taxes are as follows:
(in thousands)20232022
Current:  
Federal$(561)$(189)
State191 137 
Total current(370)(52)
Deferred: 
Federal(5,965)(4,903)
State(589)(613)
Total deferred(6,554)(5,516)
Total$(6,924)$(5,568)
The reconciliation of income tax computed at the U. S. federal statutory tax rates to income tax expense is:
(in thousands)20232022
Amount%Amount%
Tax at U.S. statutory rates$(8,616)21.0 %$2,522 21.0 %
State income taxes, net of federal tax benefit
(585)1.4 %184 1.5 %
Federal and State valuation allowance270 (0.7)%(2,366)(19.7)%
Stock option compensation87 (0.2)%(173)(1.4)%
Tax Benefits Associated with Palmer Closure— — %(5,707)(47.5)%
Other nondeductible expenses33 (0.1)%51 0.4 %
Goodwill impairment2,049 (5.0)%— — %
Other, net(162)0.5 %(79)(0.7)%
Total$(6,924)16.9 %$(5,568)(46.4)%

The Company's effective tax rate for 2023 was less than the U.S. statutory rate of 21% primarily driven by tax benefits associated with non-deductible goodwill impairment. The Company's effective tax rate for 2022 was less than the U.S. statutory rate of 21% primarily driven by tax benefits associated with the closure of Palmer and the release of valuation allowances on certain deferred tax assets, partially offset by state taxes.

The Company made income tax payments of $0.9 million and $7.8 million in 2023 and 2022, respectively. The Company has $10.5 million of U.S. Federal net operating loss carryforwards and $6.6 million of interest limitation carryforwards at the end of 2023 compared to $5.2 million of U.S. Federal net operating loss carryforwards and $2.6 million interest limitation carryforwards at the end of 2022. The Company believes that these carryforwards are more likely than not to be utilized in future periods. The majority of these carryforwards are not subject to expiration.

In addition, on a gross basis the Company had state net operating loss carryforwards of $49.0 million and $37.2 million at the end of 2023 and 2022, respectively. As of the end of 2023, the Company had recognized a state valuation allowance of $1.6 million. This represents a $0.3 million increase year-over-year primarily driven by losses in jurisdictions for which we believe it is not more likely than not to be utilized in future periods. The majority of these losses will expire between the years of 2023 and 2043, while certain losses are not subject to expiration.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal examinations for years before 2020 or state examinations for years before 2019.

The Company had no uncertain tax position activity during 2023 or 2022. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in the provision for income taxes. The Company had no accruals for uncertain tax positions including interest and penalties at the end of 2023.