Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The Company's effective tax rate was 46.8%, 26.0% and 22.9% in 2024, 2023 and 2022, respectively. A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows:

	Percent of Income before Income Taxes
	2024			2023			2022
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
State income taxes - net of federal tax benefit		6.5			2.8			2.0
Foreign tax rate differential		3.3			1.5			0.6
Non-deductible expenses		17.9			0.4			0.4
Tax carryforward expiration		—			—			2.5
Changes in unrecognized tax benefits		—			—			(1.0	)
Valuation allowances		—			—			(2.3	)
Other		(1.9	)		0.3			(0.3	)
Effective tax rate for the year		46.8	%		26.0	%		22.9	%

Income before income taxes was attributable to the following sources:

	2024		2023		2022
United States	$	3,409	$	55,553	$	66,646
Foreign		10,134		10,503		11,564
Totals	$	13,543	$	66,056	$	78,210

Income tax expense consisted of the following:

	Year ended December 31,
	2024			2023		2022
Current:
Federal	$	7,877		$	11,296	$	11,583
State and local		2,013			2,237		1,739
Foreign		2,500			2,617		2,549
Total current provision		12,390			16,150		15,871
Deferred:
Federal		(5,195	)		617		1,675
State and local		(903	)		62		230
Foreign		50			360		167
Total deferred provision		(6,048	)		1,039		2,072
Provision for income taxes	$	6,342		$	17,189	$	17,943

During 2018, the Company recorded a provision and related deferred tax liability of $0.6 million related primarily to the earnings of the Company’s subsidiary in Guatemala, which were deemed by management to no longer be permanently reinvested. The earnings and profits for all foreign subsidiaries had been previously included in the calculation of the one-time deemed repatriation transition tax, and thus, should there be a repatriation of earnings from any other foreign subsidiaries in future periods, the Company expects to be subject to only foreign withholding tax. Management does not currently anticipate a repatriation of earnings from any other foreign subsidiaries, except as provided above, as these earnings are deemed to be permanently reinvested.

Significant components of the Company’s deferred taxes as of December 31, 2024 and 2023 are as follows:

	2024			2023
Deferred income tax assets
Compensation accruals	$	2,372		$	2,487
Inventory valuation		3,094			2,515
Allowance for uncollectible accounts		931			672
Non-deductible accruals		3,983			4,040
Operating lease liability		6,438			6,025
Finance lease liability		1,809			1,934
Goodwill		3,766			—
Other deductible non-goodwill intangibles		5,420			5,473
Interest limitation carryforward		2,759			—
Capital loss carryforwards		127			127
Net operating loss carryforwards		54			73
		30,753			23,346
Valuation allowance		(127	)		(127	)
		30,626			23,219
Deferred income tax liabilities
Property, plant and equipment		15,492			12,208
Goodwill and indefinite-lived intangibles		14,410			10,254
Non-deductible intangibles		22,056			—
Right of use asset - operating leases		6,418			5,878
Finance lease assets		1,665			1,820
State deferred taxes		3,256			18
Other		1,008			1,492
		64,305			31,670
Net deferred income tax liability	$	(33,679	)	$	(8,451	)

In 2022, the Company impaired its investment in a joint venture, as described in Note 1, incurring a capital loss for which a deferred tax asset of $0.1 million was recorded. As of December 31, 2022 a valuation allowance of $0.1 million was recorded against this capital loss deferred tax asset, as the recovery is not more likely than not.

As of December 31, 2024, the Company has interest limitation carryforwards of $2.8 million, which do not expire. The Company believes it is more likely than not that the interest limitation carryforwards will be realized. The determination was made based upon projections of future book and taxable income.

In 2024, the Company realized a $1.9 million benefit from an net operating loss ("NOL") carryforward acquired in the Signature acquisition described in Note 3. There is no benefit to future years after full utilization of the NOL carryforward in 2024.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	2024		2023		2022
Balance at January 1	$	—	$	—	$	774
Increases related to previous year tax positions		1,339		—		—
Reductions due to lapse of applicable statute of limitations		—		—		(774	)
Balance at December 31	$	1,339	$	—	$	—

The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $1.3 million, $0.0 million and $0.0 million at December 31, 2024, 2023 and 2022, respectively.

The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of December 31, 2024, the Company is no longer subject to U.S. Federal examinations by tax authorities for tax years before 2021. The company is subject to state and local income tax examinations for tax years 2020 through 2023. In addition, the Company is subject to non-U.S. income tax examinations for tax years of 2020 through 2023.