INCOME TAXES

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

A reconciliation between the income tax provision at the U.S. statutory tax rate and the Company’s income tax provision on the condensed consolidated statements of income and comprehensive income is below (in thousands, except for tax rates):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Income before income taxes	$	7,554		$	24,625		$	35,297		$	61,318
U.S statutory tax rate	21		%	21		%	21		%	21		%
Income tax expense at statutory rate	1,586			5,171			7,412			12,877
State tax expense, net of federal benefit	586			1,734			2,726			4,479
Foreign tax rates different from U.S. statutory rate	22			17			307			109
Non-deductible expenses	247			335			717			822
Stock compensation	120			(10)			369			(518)
Other	30			81			27			113
Total income tax provision	$	2,591		$	7,328		$	11,558		$	17,882

Effective income tax rates for interim periods are based upon our current estimated annual rate. The Company’s effective income tax rate varies based upon an estimate of taxable earnings as well as on the mix of taxable earnings in the various states and countries in which we operate. Changes in the annual allocation and apportionment of the Company’s activity among these jurisdictions results in changes to the effective rate utilized to measure the Company’s deferred tax assets and liabilities.

Our income tax provision includes the expected benefit of all deferred tax assets, including our net operating loss carryforwards. With certain exceptions, these net operating loss carryforwards will expire from 2030 through 2037 for federal losses, from 2028 through 2038 for state losses, and from 2038 through 2044 for foreign losses. After consideration of all evidence, both positive and negative, management has determined that no valuation allowance is required at September 30, 2025 on the Company’s U.S. federal or state deferred tax assets; however, a valuation allowance has been recorded at September 30, 2025 on deferred tax assets associated with Canadian, Spanish, Italian, German, Dutch and British net operating loss carryforwards as these foreign subsidiaries have a history of incurring taxable losses in recent years. The valuation allowance will be maintained until sufficient positive evidence exists to support their future realization. Utilization of the Company’s net operating loss carryforwards is subject to limitation under Internal Revenue Code Section 382 and similar tax provisions in the foreign jurisdictions in which we operate.

As presented in the income tax reconciliation above, the tax provision recognized on the condensed consolidated statements of income and comprehensive income was impacted by state taxes, non-deductible officer compensation and share-based compensation tax expense, and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate. Our effective state tax rate for the three and nine months ended September 30, 2025 was higher than our effective state tax rate for the three and nine ended September 30, 2024. The increase in our effective state tax rate is primarily a result of lower share-based compensation tax benefits.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and restoration of favorable tax treatment for certain business provisions. ASC 740, “Income Taxes”, requires the effect of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The legislation has multiple effective dates, with certain provisions effective in 2025, and others implemented through 2028. The Company has evaluated the impact of these provisions on the condensed consolidated financial statements and does not expect that they will have a material impact on its effective tax rate. However, the Company expects that certain provisions of the OBBBA, primarily those allowing for accelerated income tax deductions for research costs and other capital expenditures, will result in lower cash income tax payments required in the fourth quarter of 2025.