Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s operations are located in the United States, therefore, the tax footnote includes only federal and state domestic tax obligations. For the years ended December 2025 and 2024, the Company recognized pretax income of $103.4 million and $70.2 million, respectively.

Income tax (benefit) expense was as follows:

(in thousands)	For the Year Ended December 31,
	2025		2024
Current tax expense
Federal	$	2,510	$	443
State	1,757		389
Total current tax expense	$	4,267	$	832
Deferred tax (benefit) expense
Federal	$	(4,949)	$	229
State	(9,941)		(139)
Total deferred tax (benefit) expense	(14,890)		90
Total tax (benefit) expense	$	(10,623)	$	922

A reconciliation between the Company’s effective tax rate on income before income taxes and the statutory tax rate in accordance with ASU 2023-09 is as follows: 

(in thousands)	For the Year Ended December 31,
	2025				2024
	Amount		Percent		Amount		Percent
Statutory U.S. Federal tax rate	$	21,706	21.0	%	$	14,742	21.0	%
State income tax, net of federal benefit 1	(8,520)		(8.3)	%	469		0.7	%
Tax credits	(839)		(0.8)	%	(670)		(1.0)	%
Changes in valuation allowance	(24,091)		(23.3)	%	(13,390)		(19.0)	%
Nontaxable and nondeductible items	520		0.5	%	27		—	%
Changes in unrecognized tax benefits	(443)		(0.4)	%	(110)		(0.2)	%
Other 2	1,044		1.0	%	(146)		(0.2)	%
Effective Tax Rate	$	(10,623)	(10.3)	%	$	922	1.3	%

1    The state and local jurisdictions contributing to the majority (greater than 50%) of the tax effect in this category include Wisconsin, Pennsylvania, Illinois, and Texas.

2    Other represents the aggregation of individually insignificant reconciling items that do not meet the quantitative threshold for separate presentation in accordance with ASC 740, as amended by ASU 2023-09.

Qualitative Explanation of Effective Tax Rate Drivers

The Company’s effective tax rate of (10.3)% for 2025 differed significantly from the statutory U.S. federal rate of 21.0% primarily due to a large decrease in the valuation allowance following the Company’s removal of substantial doubt about its

ability to continue as a going concern and improved financial performance. The reduction in the valuation allowance resulted in a significant tax benefit in 2025.

Significant components of deferred income tax assets and liabilities consisted of the following:

(in thousands)	As of December 31,
	2025		2024
Deferred tax assets:
Operating lease liability	$	14,203	$	6,420
Net operating loss carryforwards	6,035		7,454
Research and development credits	2,584		4,818
Other state credits	2,284		3,142
Inventory	2,213		3,925
Accrued warranty	2,029		3,392
Other accrued expenses	1,544		5,042
Capitalized research and development costs	—		9,884
Other	2,266		2,973
Total deferred tax assets	33,158		47,050
Valuation allowance	(183)		(38,498)
Total deferred tax assets, net of valuation allowance	$	32,975	$	8,552
Deferred tax liabilities:
ROU operating lease asset	$	(13,452)	$	(5,827)
Intangible amortization	(2,844)		(1,846)
Depreciation on property, plant and equipment	(3,357)		(2,008)
Other	—		(439)
Total deferred tax liabilities	$	(19,653)	$	(10,120)
Net deferred tax asset (liability)	$	13,322	$	(1,568)

A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The guidance on accounting for income taxes provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient taxable income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset.

Through March 31, 2025, the Company maintained a full valuation allowance against its deferred tax assets due to significant negative evidence, about realizability of the assets, including cumulative losses and substantial doubt about its ability to continue as a going concern. Due to the successful refinancing of its debt, the Company concluded that substantial doubt about its ability to continue as a going concern no longer exists. After evaluating all available evidence, including the alleviation of substantial doubt about the Company’s ability to continue as a going concern, recent and forecasted earnings, historical performance, and the Company’s improved financial condition, management determined that it is more likely than not that its deferred tax assets will be realized. As a result, the Company released most of its valuation allowance during the second quarter of 2025 and now maintains a valuation allowance related to a capital loss carryforward resulting in total valuation allowance of $0.2 million and $38.5 million as of December 31, 2025 and 2024, respectively. For 2025, the release of the valuation allowance of $38.3 million consisted of $24.1 million of federal and $14.2 million of state deferred tax assets.

As of December 31, 2025, the Company had $6.1 million in research and development and state tax credit carryforwards which begin to expire in 2026. As of December 31, 2025, the Company had $7.6 million of state net operating loss carryforwards that are available to offset taxable income in the future. The state net operating loss carryforwards begin to expire in 2031.

Cash payments for income taxes, disaggregated by jurisdiction, were as follows:

(in thousands)	For the Year Ended December 31,
	2025		2024
Federal	$	7,310	$	652
State	1,708		962
Total	$	9,018	$	1,614

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:

(in thousands)	For the Year Ended December 31,
	2025		2024
State
Wisconsin	$	744	*
Pennsylvania	460		*
Illinois	*		700
Minnesota	*		126

*Jurisdiction below the threshold for the period presented

The change in unrecognized tax benefits excluding interest and penalties were as follows:

(in thousands)	For the Year Ended December 31,
	2025		2024
Balance at beginning of year	$	1,696	$	1,819
Additions based on tax positions related to the current year	153		129
Additions for tax positions of prior years	35		12
Reduction for tax positions of prior years	(623)		$	(264)
Balance at end of year	$	1,261	$	1,696

The amount of unrecognized tax benefits, that if recognized, would affect the annual effective tax rate was approximately $1.3 million and $0 million as of December 31, 2025 and 2024, respectively. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2025 and 2024, the amount accrued for interest and penalties was not material.

The major jurisdictions subject to examination by the relevant tax authorities and open tax years, stated as the Company’s fiscal years, are as follows:

Jurisdiction	Open Tax Years
U.S. Federal	2017	to	2025
U.S. States	2017	to	2025

Recent Tax Legislation

The One, Big, Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025. The Act contains significant tax law changes with various effective dates affecting business taxpayers. Among the tax law changes that will impact the Company relate to the timing of certain tax deductions including depreciation expense, R&D expenditures and interest expense. As a result, the Company recognized incremental tax timing benefits primarily related to the restoration of 100% bonus depreciation and the ability to immediately expense R&D costs under Section 174. These changes did not have a material impact on the Company’s overall income tax expense for the year.