INCOME TAXES |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| INCOME TAXES | |
| INCOME TAXES | (11) INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, primarily related to excess tax benefits or expense from stock option exercises, the tax impact of the change in fair value of contingent consideration, and true ups related to the filed tax return. For the three months ended March 31, 2025 discrete items adjusted were $0.2 million. For the three months ended March 31, 2024 discrete items adjusted were minimal. At March 31, 2025, the Company is estimating an annual effective tax rate of approximately 25%. As of March 31, 2024 the Company estimated an annual effective tax rate of approximately 25%. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to various factors. The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. The Company’s effective income tax rate was 25% and 23% for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025 and 2024, the Company recorded an income tax benefit of approximately $3.4 million and an income tax expense of $3,000, respectively. As of March 31, 2025, we had approximately $3.2 million in net Deferred Tax Assets (DTAs). These DTAs include approximately $3.5 million related to net operating loss carryforwards that can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that our tax benefit may need a valuation allowance if future projections are not met. Therefore, unless we are able to generate sufficient taxable income a substantial valuation allowance to reduce our DTAs may be required, which would materially increase our expenses in the period the allowance is recognized and materially adversely affect our results of operations and statement of financial condition. No taxes were paid during the three months ended March 31, 2025 and 2024. |