INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s operations are conducted through various subsidiaries in a number of countries throughout the world. The Company has provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned.

Income tax expense (benefit). Pre-tax income (loss) for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands): 

	2025		2024		2023
Canada operations	$	(48,728)	$	(39,088)	$	5,524
Foreign operations	42,272		33,151		34,839
Total	$	(6,456)	$	(5,937)	$	40,363

The components of the income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023 consisted of the following (in thousands): 

	2025		2024		2023
Current:
Canada	$	—	$	41	$	142
Foreign	18,029		20,110		3,685
Total	$	18,029	$	20,151	$	3,827
Deferred:
Canada	$	—	$	—	$	—
Foreign	(4,409)		(7,659)		6,806
Total	$	(4,409)	$	(7,659)	$	6,806
Net income tax expense	$	13,620	$	12,492	$	10,633

The net income tax expense (benefit) differs from an amount computed at Canadian statutory rates as follows for the years ended December 31, 2025 pursuant to the disclosure requirements of ASU 2023-09 (in thousands):

	2025
Canada Federal Statutory Tax Rate (1)	$	(968)	15.0	%
Canada Provincial Taxes
Provincial tax at statutory rate (2)	(3,770)		58.0	%
Changes in Valuation Allowance	3,770		(58.0)	%
Foreign Tax Effects:
Australia
Statutory tax rate difference	6,727		(104.0)	%
Withholding tax credit	(64)		1.0	%
Other	29		—	%
United States
Statutory tax rate difference	(154)		2.0	%
Nondeductible compensation	540		(8.0)	%
State income tax	137		(2.0)	%
Other	24		—	%
Effect of cross border tax laws:
Deemed income from foreign subsidiaries	155		(2.0)	%
Withholding tax	64		(1.0)	%
Changes in valuation allowance	6,871		(106.0)	%
Nontaxable or Nondeductible Items:
Nontaxable capital loss	259		(4.0)	%
Total tax expense	$	13,620	(211.0)	%

(1) Represents the Canada federal statutory rate of 15%, net of the federal tax abatement and general rate reduction.

(2) Provincial taxes in Alberta comprise the majority (more than 50%) of the taxes in this category.

The net income tax expense (benefit) differs from an amount computed at Canadian statutory rates as follows for the years ended December 31, 2024 and 2023 (in thousands):

	2024				2023
Canadian federal tax benefit at statutory rates	$	(891)	15.0	%	$	6,054	15.0	%
Canadian provincial income tax	(3,186)		53.6	%	497		1.2	%
Effect of foreign income tax, net	5,642		(95.0)	%	5,481		13.6	%
Valuation allowance	8,983		(151.2)	%	(2,556)		(6.3)	%
Noncontrolling interest	325		(5.5)	%	125		0.3	%
Non-deductible compensation	1,213		(20.4)	%	1,009		2.5	%
Unrealized intercompany foreign currency translation gain	(18)		0.3	%	(148)		(0.4)	%
Deemed income from foreign subsidiaries	243		(4.1)	%	322		0.8	%
Other, net	181		(3.1)	%	(151)		(0.4)	%
Net income tax expense (benefit)	$	12,492	(210.4)	%	$	10,633	26.3	%

Deferred Tax Liabilities and Assets. The significant items giving rise to the deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands): 

	2025		2024
Deferred tax assets:
Net operating loss	$	59,497	$	53,756
Employee benefits	2,353		1,767
Deductible goodwill and other intangibles	46,628		42,713
Land	4,780		3,495
Other reserves	8,389		8,015
Deferred revenue	1,647		2,249
Operating lease liabilities	4,646		3,171
Capital losses	2,366		1,869
Other	2,804		2,255
Deferred tax assets	133,110		119,290
Valuation allowance	(98,502)		(81,998)
Deferred tax assets, net	$	34,608	$	37,292
Deferred tax liabilities:
Intangibles	$	(16,958)	$	(15,135)
Depreciation	(15,206)		(22,641)
Other	(1,226)		—
Operating lease right-of-use assets	(4,536)		(3,074)
Deferred tax liabilities	(37,926)		(40,850)
Deferred tax liabilities, net	$	(3,318)	$	(3,558)

At December 31, 2025 and 2024, we had no undistributed earnings of foreign subsidiaries that would be subject to income tax upon distribution to Canada from a foreign subsidiary. As such, as of December 31, 2025 and 2024, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries.

NOL Carryforwards. The following summarizes net operating loss (NOL) carryforwards at December 31, 2025 (in thousands): 

	Amount		Expiration Period
Net operating loss carryforwards:
Canada – Federal and provincial	$	162,674	Begins to expire in 2032
U.S. – Federal	34,334		Begins to expire in 2036
U.S. – Federal	40,943		Does not expire
U.S. – State, tax effected	5,900		Began to expire in 2024

Change in Valuation Allowance. Realization of our deferred tax assets is dependent upon, among other things, our ability to generate taxable income of the appropriate character in the future.

Changes in our valuation allowance for the years ended December 31, 2025 and 2024 are as follows (in thousands): 

Balance as of December 31, 2023	$	(78,769)
Change in income tax provision	(8,983)
Other change	910
Foreign currency translation	4,844
Balance as of December 31, 2024	$	(81,998)
Change in income tax provision	(10,642)
Other change	(1,472)
Foreign currency translation	(4,390)
Balance as of December 31, 2025	$	(98,502)

As of each reporting date, management considers new evidence, both positive and negative, that could affect our view of the future realization of deferred tax assets. As of December 31, 2025, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Canadian and U.S. net deferred tax assets are realizable, therefore we have maintained the valuation allowance in both of these jurisdictions. As of December 31, 2025, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Australia deferred tax assets related to certain capital assets are realizable, therefore we have maintained a partial valuation allowance in Australia.

Unrecognized Tax Benefits. We file tax returns in the jurisdictions in which they are required. All of these returns are subject to examination or audit and possible adjustment as a result of assessments by taxing authorities. We believe that we have recorded sufficient tax liabilities and do not expect the resolution of any examination or audit of our tax returns to have a material adverse effect on our operating results, financial condition or liquidity.

Our Canadian federal tax returns subsequent to 2020 are subject to audit by the Canada Revenue Agency. Our Australian subsidiary’s federal income tax returns subsequent to 2020 are open for review by the Australian Taxation Office. Our U.S. subsidiary’s federal tax returns subsequent to 2021 are subject to audit by the U.S. Internal Revenue Service.

The total amount of unrecognized tax benefits as of December 31, 2025, 2024 and 2023 was zero. Unrecognized tax benefits, if recognized, would affect the effective tax rate. We accrue interest and penalties, if applicable, related to unrecognized tax benefits as a component of our provision for income taxes. As of December 31, 2025, 2024 and 2023, we had accrued zero of interest expense and penalties.