Note 8 - Income Taxes |
6 Months Ended |
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Jun. 30, 2026 | |
| Notes to Financial Statements | |
| Income Tax Disclosure [Text Block] |
The Company calculates its interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, the Company makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date income or loss. The tax expense or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.
The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year and permanent and temporary differences. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax environment changes.
For the three months ended June 30, 2026, the Company recorded a tax benefit of ($0.01) million, which represents an effective tax rate benefit of (0.8%). For the six months ended June 30, 2026, the Company recorded tax expense of $0.2 million, which represents an effective tax rate of 9.3%. The income tax expense and the effective tax rate for the three and six months ended June 30, 2026 were primarily impacted by the discrete tax benefit relating to the $2.6 million trade name impairment charge, as well as items related to the Company’s share-based compensation and long-term incentive plans. The rate for both periods was further impacted by the variability in the mix of earnings across the Company’s foreign and domestic operations, which are subject to various statutory tax rates in those jurisdictions.
For the three months ended June 30, 2025, the Company recorded tax expense of $0.3 million, which represents an effective tax rate of 15.5%. For the six months ended June 30, 2025, the Company recorded tax expense of $0.1 million, which represents an effective tax rate of 14.7%. The income tax expense and the effective tax rate for the three and six months ended June 30, 2025 were primarily impacted by the variability in the mix of earnings across the Company’s foreign and domestic operations, subject to various statutory tax rates in those jurisdictions. The tax rate was further favorably impacted by the performance of the Company’s compensation plans during the six months ended June 30, 2025.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA included significant changes to the domestic and international tax provisions, such as modifications to the global tax framework, 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. The legislation had multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has considered the estimated impact of OBBBA on its expected annual effective tax rate as part of its income tax expense for the three and six months ended June 30, 2026. The impacts include the increased unfavorable Net Controlled Foreign Corporation Tested Income (“NCTI”), formerly Global Intangible Low-Taxed Income (“GILTI”), taking effect in 2026.
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