Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The Company's effective income tax rate from continuing operations was 0.9% and (0.6)% for the three and six months ended June 30, 2022, respectively. The difference between the effective rate and the statutory rate is primarily attributed to the change in the valuation allowance against net deferred tax assets.

The Company estimates an annual effective income tax rate based on projected results for the year and applies this rate to income before taxes to calculate income tax expense. When applicable, the income tax provision also includes adjustments for discrete tax items. Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period.

For the three and six months ended June 30, 2022, the Company’s tax expense (benefit) was $(0.3) million and $0.4 million, respectively. For the three and six months ended June 30, 2021, the Company’s tax expense

(benefit) was $(5.6) million and $(6.1) million, respectively. The Company recognizes the effect of income tax positions only if those positions are “more likely than not” of being sustained. As of June 30, 2022, the Company has $1.0 million of unrecognized tax benefits. Interest and penalties accrued on unrecognized tax benefits are recorded as tax expense within the condensed consolidated financial statements. The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits within the next twelve months.

The Company and its subsidiaries file U.S. federal income tax returns and various state, local and foreign income tax returns. At June 30, 2022, the Company’s statutes of limitations are open for all federal and state years filed after the year of incorporation ending December 31, 2020. Net operating loss (“NOL”) and credit carryforwards from all years, including carryforwards from acquisitions generated prior to 2020, are subject to examination and adjustments for the three years following the year in which the carryforwards are utilized. The Company is not currently under Internal Revenue Service or state examination. Pursuant to Internal Revenue Code Sections 382 and 383, the utilization of NOLs and other tax attributes may be substantially limited due to cumulative changes in ownership greater than 50% that may have occurred or could occur during applicable testing periods.