INCOME TAXES

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s provision for income taxes during the interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for each respective reporting period. However, the Company utilized a discrete effective tax rate method, as allowed by ASC 740-270 “Income Taxes—Interim Reporting,” to calculate taxes for this interim reporting period (the six months ended June 30, 2025). The Company made this choice because it determined that the historical method would not provide a reliable estimate for tax expense for the six months ended June 30, 2025 due to uncertainty in estimating annual pretax earnings.

For the six months ended June 30, 2025, the Company’s income tax benefit was $837,000 compared to income tax benefit of $2,118,000 for the six months ended June 30, 2024. Effective tax rates were 21% and 102% for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had income tax receivables of $2,435,000. The Company classifies interest and penalties incurred on tax payments as income tax expense.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses. We are evaluating the full effects of the legislation on our estimated annual effective tax rate and cash tax position, but we expect that the legislation will likely not have a material impact on our financial statements. As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025.