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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes consists of the following:
Year Ended December 31,
(in thousands)202420232022
U.S.$429,899 $410,326 $29,012 
International1,078 617 (2,293)
Income before income taxes$430,977 $410,943 $26,719 
The Company’s income tax expense (benefit) consists of the following:
Year Ended December 31,
(in thousands)202420232022
Current
Federal$114,645 $110,108 $42,532 
State33,919 29,806 4,302 
International— — (166)
148,564 139,914 46,668 
Deferred
Federal(26,960)(45,252)(39,920)
State(3,657)(10,739)(8,315)
International588 359 219 
(30,029)(55,632)(48,016)
Income tax expense (benefit)$118,535 $84,282 $(1,348)
The reconciliation of income taxes at the U.S. federal statutory rate to the income tax expense (benefit) is as follows:
Year Ended December 31,
(in thousands)202420232022
U.S. statutory rate$90,506 $86,298 $5,611 
Permanent items(413)1,042 2,309 
Sale of RELISTOR licensed intangible asset associated with net sales royalties— (10,817)— 
Section 162(m)407 307 247 
Uncertain tax positions2,466 (5,045)(12,629)
Tax credits(5,247)(2,118)(4,085)
State and local taxes21,724 18,726 67 
Impact on deferred taxes of change in tax rate(970)(330)4,169 
Changes in fair value of contingent assets and liabilities(567)(1,948)5,422 
Foreign tax rate differential66 128 68 
Valuation allowance12,123 (4)(30)
Stock compensation(206)(3,941)(4,612)
Change in indemnification deferred tax asset(28)1,240 2,343 
Other(1,326)744 (228)
Income tax expense (benefit)$118,535 $84,282 $(1,348)
The components of deferred income tax assets (liabilities) are as follows:
December 31,
(in thousands)20242023
Deferred Tax Assets
Federal benefit of state taxes payable$867 $263 
Reserves, accruals and other30,382 18,923 
Capitalized research and development29,799 17,142 
Stock compensation13,876 9,266 
Unrealized loss on investments10,707 — 
Intangible assets33,771 25,214 
Net operating loss carryforwards71,502 80,184 
Lease liability14,100 14,365 
Deferred tax assets205,004 165,357 
Deferred Tax Liabilities
Right-of-use asset(9,241)(11,543)
Depreciation(9,881)— 
Deferred tax liability(19,122)(11,543)
Less: valuation allowance(15,649)(3,616)
$170,233 $150,198 
Recorded in the accompanying consolidated balance sheets as:
Noncurrent deferred tax assets, net$170,233 $150,198 
The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realizability of deferred tax assets requires significant management judgment. In determining whether its deferred tax assets are more-likely-than-not realizable, the Company evaluated all available positive and negative evidence. As of December 31, 2024 and 2023, the Company maintains a valuation allowance of $15.6 million and $3.6 million, respectively. The amount in 2024 primarily related to unrealized losses incurred during the year on its investment in equity securities and to net deferred tax assets of certain of the Company’s foreign subsidiaries. The 2023 amount only relates to the net deferred tax assets of certain of the Company’s foreign subsidiaries.
Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by IRC Section 382, results from transactions which impact the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.
At December 31, 2024, the Company had U.S. federal net operating loss carryforwards of approximately $269.9 million, $128.1 million of which will expire between 2027 and 2037, and $141.8 million of which can be carried forward indefinitely. The Company has foreign net operating losses of $29.0 million and $4.3 million which expire in 2035 and $24.7 million of which can be carried forward indefinitely. The Company’s state net operating losses are $9.1 million on a tax-effected basis, which will expire between 2025 and 2044. The Company has state research credit carryforwards of $2.1 million, which will expire between 2026 and 2039.
The Company’s U.S. federal income tax returns are subject to examination for three years after the filing date of the return. The state and foreign income tax returns are subject to examination for periods varying from three to four years after filing, depending on the specific jurisdiction’s statutes of limitation, and in the case of Sweden, up to six years after the end of the financial year.
A reconciliation of the Company’s changes in uncertain tax positions for 2024 and 2023 is as follows:
(in thousands)Amount
Balance of uncertain tax positions as of January 1, 2022$3,658 
  Additions related to current year tax positions— 
  Reductions related to prior year tax positions(1,180)
  Settlements(306)
  Lapse of statute of limitations(692)
Balance of uncertain tax positions as of December 31, 20221,480 
   Additions related to current year tax positions3,749 
   Reductions related to prior year tax positions(688)
   Settlements(442)
   Lapse of statute of limitations— 
Balance of uncertain tax positions as of December 31, 20234,099 
   Additions related to current year tax positions948 
Additions related to prior year tax positions2,694 
   Reductions related to prior year tax positions(3)
   Settlements(118)
   Lapse of statute of limitations— 
Balance of uncertain tax positions as of December 31, 2024$7,620 
In connection with the Company’s acquisition of the medical imaging business from Bristol Myers Squibb (“BMS”) in 2008, the Company recorded a liability for uncertain tax positions related to the acquired business and simultaneously entered into an indemnification agreement with BMS for any payments made to settle those uncertain tax positions with the taxing authorities.
In accordance with the Company’s accounting policy, the change in the tax liability, penalties and interest associated with these obligations (net of any offsetting federal or state benefit) is recognized within income tax expense. As these reserves change, adjustments are included in income tax expense while the offsetting adjustment is included in other income. Assuming that the receivable from BMS continues to be considered recoverable by the Company, there will be no effect on net income and no net cash outflows related to these liabilities. Included in other (income) loss for the years ended December 31, 2024, 2023 and 2022, is tax indemnification (income) expense, net of ($0.1) million, $4.9 million and $9.6 million, respectively.
As of December 31, 2024 and 2023, total liabilities for uncertain tax positions including interest and penalties were $9.4 million and $5.4 million, respectively, consisting of uncertain tax positions of $7.6 million and $4.1 million, respectively, interest accruals of $1.8 million and $1.3 million, respectively, and no penalty accruals as of December 31, 2024 and 2023. The increase in uncertain tax positions during the year ended December 31, 2024 was primarily related to state tax uncertainties. As of December 31, 2024, $1.4 million, $7.3 million, and $0.7 million of these liabilities were recorded in current liabilities, other long-term liabilities, and as a reduction of deferred tax assets, respectively. As of December 31, 2023, $1.3 million, $3.2 million and $0.9 million of these liabilities were recorded in current liabilities, other long-term liabilities, and as a reduction of deferred tax assets, respectively. Included in the 2024 tax provision are expenses of $2.5 million, primarily related to state tax position. Included in the 2023 and 2022 tax provision are benefits of $5.0 million and $12.6 million, respectively, relating to reversals of uncertain tax positions recognized upon settlements, effective settlements, or lapses of relevant statutes of limitation, partially offset by interest accruals. As of December 31, 2024, the Company has $5.7 million of unrecognized tax benefits which would impact the effective tax rate if recognized.