Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

16.INCOME TAXES

Income tax provision (benefit) consists of the following (in thousands):

	Year Ended December 31,
	2024			2023		2022
Current income tax provision:
Federal	$	75,552		$	52,634	$	28,830
State		20,147			13,966		9,126
		95,699			66,600		37,956
Deferred income tax provision:
Federal		(14,907	)		2,869		20,000
State		(1,500	)		1,346		4,256
		(16,407	)		4,215		24,256
Total income tax provision	$	79,292		$	70,815	$	62,212

The Company’s effective tax rate for the year ended December 31, 2024, was 25.9% and was comparable to the effective tax rate for the year ended December 31, 2023, of 25.6%, which resulted in income tax expense of $79.3 million and $70.8 million, respectively.

The income tax provision differs from the amount of income tax determined by applying the U.S. Federal statutory rate to income before taxes as a result of the following (in thousands):

	Year Ended December 31,
	2024			2023			2022
U.S. Federal statutory taxes	$	64,194		$	58,002		$	51,836
State and local taxes, net of U.S. Federal benefit		13,890			12,296			10,608
Permanent items		948			1,320			(208	)
Excess tax benefits from vesting or settlement of stock    compensation awards		(756	)		(656	)		(11	)
Federal credits		(636	)		(755	)		(598	)
Other		1,652			608			585
Total income tax provision	$	79,292		$	70,815		$	62,212

Deferred tax assets and liabilities consist of the following (in thousands):

	As of December 31,
	2024			2023
Deferred tax assets:
Operating lease liability		13,632			6,886
Product and surface flaking warranty reserves		5,833			5,645
State tax credit carryforwards		3,621			4,250
Deferred revenue		4,230			4,215
Tax Cut and Jobs Act capitalization of research and    development costs		5,397			3,956
Stock-based compensation		1,828			2,361
Inventories		3,342			639
Gross deferred tax assets, before valuation allowance		37,883			27,952
Valuation allowance		(2,638	)		(3,307	)
Gross deferred tax assets, after valuation allowance		35,245			24,645
Deferred tax liabilities:
Depreciation		(70,572	)		(74,794	)
Inventories		(2,150	)		(10,627	)
Operating lease right-of-use asset		(13,332	)		(6,677	)
Goodwill amortization		(3,584	)		(3,536	)
Other		(1,639	)		(1,450	)
Gross deferred tax liabilities		(91,277	)		(97,084	)
Net deferred tax liability	$	(56,032	)	$	(72,439	)

The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax laws and statutory tax rates. In accordance with accounting standards, the Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized, primarily certain state income tax credits. As of December 31, 2024, the Company had a valuation allowance of $2.6 million against deferred tax assets it estimates will not be realized. The Company will analyze its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets.

The Company recognizes interest and penalties related to tax matters as a component of “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. As of December 31, 2024, the Company has identified no uncertain tax position and, accordingly, has not recorded any unrecognized tax benefits or associated interest and penalties.

The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company has accrued a liability when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with accounting

standards. As of December 31, 2024, for certain tax jurisdictions, tax years 2020 through 2024 remain subject to examination. The Company believes that adequate provisions have been made for all tax returns subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdictions as the Company does not have a taxable presence