Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of the Company's (loss) income before income taxes are as follows:

	Year Ended December 31,
	2024		2023		2022
	(amounts in thousands)
United States	$	(17,435)	$	102,200	$	252,433
Foreign	1,037		694		664
(Loss) income before income taxes	$	(16,398)	$	102,894	$	253,097

 The components of the Company’s income tax (benefit) expense are as follows:

	Year Ended December 31,
	2024		2023		2022
	(amounts in thousands)
Current:
Federal	$	(104)	$	19,871	$	48,017
State	(75)		8,940		13,769
Foreign	281		148		219
Total	102		28,959		62,005
Deferred:
Federal	(2,004)		554		387
State	(105)		596		4,667
Foreign	165		154		56
Total	(1,944)		1,304		5,110
Income tax (benefit) expense	$	(1,842)	$	30,263	$	67,115

Deferred income taxes reflect the Company's net tax effect of temporary differences between the carrying amount 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 are as follows:

	December 31,
	2024		2023
	(amounts in thousands)
Deferred Tax Assets:
Accrued other and prepaid expenses	$	432	$	912
Allowance for credit losses	2,379		5,321
Intangible assets	7,784		7,072
Net operating loss carryforwards	6,571		1,080
Accrued professional liability	1,907		851
Accrued workers’ compensation	3,215		3,097
Share-based compensation	918		1,197
Operating lease liabilities	659		1,319
Depreciation	203		—
Credit carryforwards	170		—
Other	1,127		1,016
Gross deferred tax assets	25,365		21,865
Valuation allowance	(178)		(2)
	25,187		21,863
Deferred Tax Liabilities:
Depreciation	—		(967)
Indefinite-lived intangibles	(16,763)		(14,296)
Operating lease right-of-use assets	(320)		(620)
Tax on unrepatriated earnings	(565)		(401)
	(17,648)		(16,284)
Net deferred taxes	$	7,539	$	5,579

As of December 31, 2024 and 2023, the Company had immaterial valuation allowances on its deferred tax assets.

As of December 31, 2024, the Company had approximately $25.8 million of federal net operating loss carryforwards, $43.6 million of state net operating loss carryforwards, and an immaterial amount of foreign net operating loss carryforwards. The net operating losses (NOLs) expire as follows: state between 2026 and 2041 and foreign between 2025 and 2028. As a result of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act), the federal NOL and certain state NOLs generated in 2024, 2020, 2019, and 2018 carry forward indefinitely.

The reconciliation of income tax computed at the U.S. federal statutory rate to income tax (benefit) expense is as follows:

	Year Ended December 31,
	2024		2023		2022
	(amounts in thousands)
Tax at U.S. statutory rate	$	(3,444)	$	21,608	$	53,150
State taxes, net of federal benefit	(653)		6,834		15,352
Non-deductible items(a)	588		573		179
Foreign tax expense	228		155		136
Valuation allowances	—		1		1
Uncertain tax positions	867		2,771		(1,694)
Officers' compensation	313		(275)		404
Tax credits	(170)		(441)		—
Return to provision	465		(482)		(169)
Other	(36)		(481)		(244)
Income tax (benefit) expense	$	(1,842)	$	30,263	$	67,115

________________

(a) Includes non-deductible meals and incidentals and other miscellaneous non-deductible items.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: 

	Year Ended December 31,
	2024		2023		2022
	(amounts in thousands)
Balance at January 1	$	10,377	$	7,581	$	9,179
Additions based on tax positions related to the current year	1,336		2,737		349
Additions (reductions) based on tax positions related to prior years	(851)		59		(1,947)
Balance at December 31	$	10,862	$	10,377	$	7,581

There were no short-term unrecognized tax benefits as of December 31, 2024 and 2023. Long-term unrecognized tax benefits are included in uncertain tax positions in the consolidated balance sheets and were $10.1 million and $10.6 million as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the Company had unrecognized tax benefits, which would affect the effective tax rate if recognized, of $10.7 million and $10.0 million, respectively.

The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. During the years ended December 31, 2024, 2023, and 2022, interest and penalties, and accruals for the payment of interest and penalties, were immaterial. Tax years 2012 through 2024 remain open to examination by certain taxing jurisdictions to which the Company is subject to tax.

An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward if such carryforward would offset the disallowance of the tax position. As a result of the Company’s generation of a net operating loss, the Company reclassified $1.3 million of unrecognized tax benefits from long-term liabilities to deferred tax assets in the year ended December 31, 2024. As a result of the Company’s utilization of its federal net operating loss carryforward and a material amount of state net operating loss carryforwards, the Company reclassified $0.4 million of unrecognized tax benefits from deferred tax assets to long-term liabilities in the year ended December 31, 2022.