INCOME TAXES

6 Months Ended

Jun. 30, 2022

INCOME TAXES

INCOME TAXES

5.    INCOME TAXES:

The Company uses the estimated annual effective tax rate method under ASC 740-270, “Interim Reporting” to calculate the provision for income taxes. The Company recorded a provision for income taxes of approximately $9.3 million on pre-tax income from continuing operations of approximately $42.2 million for the six months ended June 30, 2022, which results in an effective tax rate of approximately 22.1%. This rate is based on the estimated annual effective tax rate of approximately 27.1%, and discrete tax benefits of approximately $2.1 million primarily related to non-taxable income forgiveness of the PPP Loan.

In accordance with ASC 740, “Accounting for Income Taxes,” the Company continues to evaluate the realizability of its net DTAs by assessing the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns, tax planning strategies, and future profitability. As of June 30, 2022, the Company believes it is more likely than not that these DTAs will be realized.  

The Company is subject to the continuous examination of our income tax returns by the IRS and other domestic tax authorities. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. The Company believes that it is reasonably possible that a decrease of up to $680,000 of unrecognized tax benefits related to state tax exposures may occur within the next twelve months.