INCOME TAXES

3 Months Ended

Mar. 31, 2024

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 $2.5 million on pre-tax income from consolidated operations of approximately $10.6 million for the three months ended March 31, 2024, which results in an effective tax rate of approximately 23.5%. This rate is based on the estimated annual effective tax rate of approximately 24.5%.

In accordance with ASC 740, “Accounting for Income Taxes,” the Company continues to evaluate the realizability of its net deferred tax assets (“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 March 31, 2024, the Company believes it is more likely than not that these DTAs will be realized.  

The Company is subject to the continuous examination of the Company’s income tax returns by the IRS and other domestic tax authorities. The Company believes 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 approximately $0.1 million of unrecognized tax benefits related to state tax exposures may occur within the next twelve months.