16. Income Taxes

Effective December 31, 2025, the Company adopted ASU 2023-09, on a prospective basis. As required under the new guidance, the Company has expanded the disaggregation of the income tax rate reconciliation with the drivers of the effective tax rate. The revised presentation includes separate quantitative disclosure of recurring and non‑recurring items, jurisdictional impacts, and other significant reconciling categories that may affect period‑over‑period comparability. The following table presents the income tax rate reconciliation prepared in accordance with ASU 2023‑09.

State taxes in California, Illinois, Maryland, New Jersey, New York and Texas made up the majority (greater than 50%) of the tax effect in this category.

For periods prior to the adoption of ASU 2023‑09, the Company’s income tax disclosures continue to reflect the presentation and categorization required under previous U.S. GAAP. The following table presents the income tax rate reconciliation for the periods reported under the prior guidance.

Income tax expense from discontinued operations was $41.3 million and $8.6 million for the fiscal years ended December 31, 2024 and 2023, respectively. Income tax expense for the fiscal years ended December 31, 2024 and 2023 was impacted primarily by the sale of the divested entities and changes in the income before income taxes from discontinued operations. The Company did not have discontinued operations in 2025.T

The Organization for Economic Co-operation and Development (“OECD”) published its model rules “Tax Challenges Arising From the Digitalization of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)” which established a global minimum corporate tax rate of 15% for certain multinational enterprises. Many countries have implemented or are in the process of implementing the Pillar Two legislation, which will apply to the Company. The Company concluded that Pillar Two did not have a material impact on the global provision and does not currently estimate a material impact in future periods. The Company will continue to monitor the impact as countries implement legislation and the OECD provides additional guidance to determine any impact in future periods.

On July 4, 2025, the “One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 and the restoration of favorable tax treatment for certain business provisions, including 100% bonus depreciation, immediate expensing of domestic research and experimental costs, and the restoration of the Section 163(j) depreciation and amortization addback for

purposes of determining the business interest expense limitation. The Company concluded no material direct impact to the effective tax rate. However, indirectly the Company concluded a favorable adjustment to the Company’s interest expense valuation allowance required for the year.

The Company held cash and cash equivalents in foreign subsidiaries of $14.0 million and $65.0 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the undistributed earnings of the Company’s foreign subsidiaries was $124.6 million and $130.7 million, respectively.

The Company has not recorded a deferred tax liability related to undistributed earnings of its foreign subsidiaries as of December 31, 2025, except for a $1.0 million deferred tax liability for unremitted earnings in Canada with respect to which the Company no longer has an indefinite reinvestment assertion. Taxes have not been provided on the remaining $116.6 million of undistributed foreign earnings. The incremental tax liability associated with these earnings is expected to be immaterial.

The Company evaluates its deferred tax assets, including a determination of whether a valuation allowance is necessary, based upon its ability to utilize the assets using a more likely than not basis. Deferred tax assets are only recorded to the extent that they are realizable based upon past and future income. The Company’s valuation allowances on its deferred tax assets as of December 31, 2025, 2024 and 2023 were $21.4 million, $3.2 million and $3.5 million, respectively.

As of December 31, 2025, the Company had $3.0 million of United States Federal Net Operating Losses (“NOL”), $45.4 million state NOL, and $4.1 million foreign NOL. The change of ownership provisions of the Tax Reform Act of 1986 may limit utilization of a portion of the Company’s domestic NOL to future periods. The United States Federal NOL expires in year 2038, $25.0 million of the state NOL expires between years 2026 and 2045 and the remaining $20.4 million of the state NOL carry forward indefinitely. Foreign NOL of $1.2 million expires between years 2026 and 2036 and the remaining $2.9 million of the foreign NOL carry forward indefinitely.

Uncertain Tax Positions

The Company accounts for uncertain tax positions when it is more likely than not that the tax position will not be sustained on examination by the taxing authorities, based on the technical merits of the position. As of December 31, 2025, 2024, and 2023, the Company’s unrecognized tax benefits were $2.3 million, $2.9 million and $2.9 million, respectively. $1.5 million out of the $2.3 million of the unrecognized tax benefits as of December 31, 2025 would be included in the effective tax rate if recognized in future periods.

The Company is unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. The Company files tax returns in the United States, various states and foreign jurisdictions. With few exceptions, as of December 31, 2025, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2021. The Company does not have any material ongoing income tax audits.

The Company has elected to classify interest and penalties as components of tax expense. These amounts were $1.4 million, $1.4 million and $0.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.