Note 4 - Income Taxes

3 Months Ended

Mar. 31, 2026

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 4. Income Taxes

            The Company's tax provision and the resulting effective tax rate for interim periods is determined based on its estimate annual effective tax rate adjusted for the effect of discrete items arising in that quarter.  The provision for income taxes consists of federal and state taxes in the US, California, Florida, and various other states.

Note 4. Income Taxes (continued)

 For the three months ended March 31, 2026, the Company recorded an income tax expense of $682, resulting in an effective tax rate of 19.8%.  The Company's taxable income is generated in the United States and taxed at a federal and state statutory rate of 27.5%.  Relative to federal and state statutory rate, the effective tax rate for the three months ended March 31, 2026, was reduced by the tax impact of research and development tax credits and stock compensation exercises and vestings.

For the three months ended March 31, 2025, the Company recorded an income tax expense of $670.  The effective tax rate for the three months ended  March 31, 2025, was 24.8%.  Relative to the federal and state statutory rate, the effective tax rate for the three months ended March 31, 2025, was primarily impacted by the tax benefit for research and development tax credits for 2025 as compared to projected income before tax.

Based on the analysis of all available evidence, both positive and negative, the Company has concluded that, except for the capital loss carryforward of approximately $851, it currently does have the ability to generate sufficient taxable income in the necessary period for the deferred tax assets.  Accordingly, the Company recorded an increase in the valuation allowance of $24 as of December 31, 2025.  The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future.  If the Company incurs future losses, it may be necessary to record additional valuation allowance amounts related to the deferred tax assets recognized as of March 31, 2026.  The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax asset may be deemed appropriate in the future.

The Company's policy is to recognize interest and penalties associated with uncertain tax benefits as part of income tax provision and included accrued interest and penalties with the related income tax liability on the Company's Condensed Consolidated Balance Sheets.  To date, the Company has not recognized any interest and penalties in its Condensed Consolidated Statement of Operations, nor has it accrued for or made payments for interest and penalties.  The Company recorded $0 and $1,419 unrecognized tax benefits as of March 31, 2026 and 2025, respectively.

          The Company imports certain materials and products that are subject to U.S. government tariffs and import duties. On February 20, 2026, a US federal court ordered the U.S. government to begin refunding certain tariffs. The Company believes that some of the tariffs it has paid may be eligible for refund; however, the amount and timing of any potential refunds are uncertain. Accordingly, the Company has not recorded, nor plans to record, any benefit related to possible tariff refunds at this time.