Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES

v3.25.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2024
INCOME TAXES  
INCOME TAXES

NOTE M - INCOME TAXES

Income tax (benefit) expense consists of (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

    

Current

    

Deferred

    

Total

Year ended December 31, 2024:

​

​

​

​

​

​

​

​

​

U.S. federal

​

$

(410)

​

$

1,456

​

$

1,046

U.S. state

​

 

360

​

 

562

​

 

922

Foreign

​

 

4

​

 

14

​

 

18

Total income tax (benefit) expense

​

$

(46)

​

$

2,032

​

$

1,986

​

​

​

​

​

​

​

​

​

​

​

​

    

Current

    

Deferred

    

Total

Year ended December 31, 2023:

​

​

​

​

​

​

​

​

​

U.S. federal

​

$

(1,570)

​

$

(806)

​

$

(2,376)

U.S. state

​

 

128

​

 

(110)

​

 

18

Foreign

​

 

242

​

 

-

​

 

242

Total income tax expense (benefit)

​

$

(1,200)

​

$

(916)

​

$

(2,116)

​

​

​

​

​

​

​

​

​

​

​

​

    

Current

    

Deferred

    

Total

Year ended December 31, 2022:

​

​

​

​

​

​

​

​

​

U.S. federal

​

$

10,537

​

$

(862)

​

$

9,675

U.S. state

​

 

3,015

​

 

(405)

​

 

2,610

Foreign

​

 

2,856

​

 

(1,120)

​

 

1,736

Total income tax expense (benefit)

​

$

16,408

​

$

(2,387)

​

$

14,021

​

Tax Rate Reconciliation

The provision for income taxes on pre-tax income differs from the amount computed by applying the U.S. federal statutory income tax rate of 21.0% for the years ended December 31, 2024, 2023 and 2022 due to the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

Year ended December 31,

​

    

2024

    

2023

    

2022

Provision for income tax at the federal statutory rate

​

$

1,646

​

$

(1,613)

​

$

12,155

State taxes

​

 

846

​

 

165

​

 

1,959

Permanent differences

​

 

(332)

​

 

(328)

​

 

218

Change in valuation allowance 

​

 

-

​

 

(1,313)

​

 

17

Executive compensation

​

​

-

​

​

3,016

​

​

2,562

Return to provision

​

​

(91)

​

​

151

​

​

591

FDII deduction

​

​

-

​

​

-

​

​

(3,014)

R&D credit

​

​

(538)

​

​

(1,174)

​

​

-

Stock-based compensation

​

​

467

​

​

(1,020)

​

​

-

Other

​

 

(12)

​

 

-

​

 

(467)

Total income tax (benefit) expense

​

$

1,986

​

$

(2,116)

​

$

14,021

​

Significant Components of Deferred Taxes

Deferred tax assets and liabilities reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax

effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of December 31, 2024 and 2023 are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

Year ended December 31,

​

    

2024

    

2023

Deferred tax assets:

 

​

​

​

​

  

Net operating losses

​

$

2,986

​

$

2,005

Foreign tax credit carryforwards

​

 

768

​

 

1,109

Inventory basis differences

​

 

8,544

​

 

9,269

Maintenance deposit payments

​

 

10

​

 

-

Deferred revenue

​

 

420

​

 

726

Allowance for doubtful accounts

​

 

276

​

 

237

Start up costs

​

​

566

​

​

634

Stock-based compensation

​

​

1,003

​

​

966

Business interest expense - 163(j) limitation

​

​

1,343

​

​

-

Accrued expenses

​

 

11

​

 

22

Section 174 capitalization

​

​

4,472

​

​

2,971

Lease obligations

​

​

8,010

​

​

7,010

R&D credit

​

​

1,055

​

​

434

Other

​

 

162

​

 

445

Total deferred tax assets

​

​

29,626

​

 

25,828

Deferred tax liabilities:

​

 

​

​

 

​

Fixed assets

​

 

(11,081)

​

 

(6,489)

Right-of-use assets

​

​

(7,582)

​

​

(6,659)

Intangible assets

​

​

(792)

​

​

(477)

Total deferred tax liabilities

​

 

(19,455)

​

 

(13,625)

Deferred income taxes, net

​

$

10,171

​

$

12,203

​

The deferred tax assets are adjusted by a valuation allowance if, based on the weight of available evidence, it is more likely than not that a portion or all the deferred assets will not be realized. After considering all of the evidence, both positive and negative, it was determined more likely than not that the Company's net deferred tax asset in the U.S. jurisdiction will be realizable as of December 31, 2024.

At December 31, 2024 and December 31, 2023, the Company had net operating losses available for carry-forward for Federal income tax purposes of approximately $13.8 million and $7.8 million, respectively. These net operating loss carryforwards acquired prior to 2024 will expire on various dates through 2034. Utilization of the net operating loss carryforwards as of December 31, 2024 are subject to annual limitations under Sec. 382 of the Internal Revenue Code. A deferred tax asset has been recorded only for those carryforwards that the Company expects to utilize prior to expiration.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and in Ireland. Tax years beginning in 2020 through 2023 are open for examination by the U.S. Internal Revenue Service and tax years beginning in 2019 through 2023 are open for examination by various state taxing jurisdictions in which the Company is subject to tax. Tax years beginning in 2019 through 2023 are open for examination by the Irish taxing authorities.

ASC 740, Income Taxes, provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, and disclosure and transition. As of December 31, 2024 and 2023, there was no reserve for uncertain tax positions.