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Income Taxes
12 Months Ended
Dec. 31, 2015
Income Taxes  
Income Taxes

 

12.   Income Taxes

        The Company's components of (loss) income before income taxes are as follows:

                                                                                                                                                                                    

 

 

Year Ended
December 31,

 

Three Months Ended
December 31,

 

Year Ended September 30,

 

 

 

2015

 

2014

 

2014

 

2013

 

(Loss) income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

(36,230,000

)

$

(6,249,000

)

$

(11,671,000

)

$

23,019,000

 

Foreign

 

 

(3,804,000

)

 

(654,000

)

 

(6,229,000

)

 

(3,449,000

)

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

$

(40,034,000

)

$

(6,903,000

)

$

(17,900,000

)

$

19,570,000

 

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        The Company recorded income tax benefit of $13,755,000 and $1,912,000 for the year ended December 31, 2015 and the three months ended December 31, 2014, respectively. In year ended September 30, 2014, the Company recorded income tax benefit of $5,280,000 as compared to expense of $9,090,000 in year ended September 30, 2013.

        Income tax benefit (expense) is comprised of the following:

                                                                                                                                                                                    

 

 

Year Ended
December 31,

 

Three Months Ended
December 31,

 

Year Ended September 30,

 

 

 

2015

 

2014

 

2014

 

2013

 

Current federal benefit (expense)

 

$

280,000

 

 

 

$

74,000

 

$

(124,000

)

Current state expense

 

 

(571,000

)

$

(39,000

)

 

(633,000

)

 

(693,000

)

Current foreign expense

 

 

 

 

 

 

(228,000

)

 

 

Deferred foreign benefit (expense)

 

 

687,000

 

 

 

 

 

 

 

Deferred federal benefit (expense)

 

 

12,499,000

 

 

1,783,000

 

 

5,489,000

 

 

(6,251,000

)

Deferred state benefit (expense)

 

 

860,000

 

 

168,000

 

 

578,000

 

 

(2,022,000

)

​  

​  

​  

​  

​  

​  

​  

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Total

 

$

13,755,000

 

$

1,912,000

 

$

5,280,000

 

$

(9,090,000

)

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        The income tax provision differs from the amount computed by applying the statutory federal income tax rate to (losses) income before income taxes as follows:

                                                                                                                                                                                    

 

 

Year Ended
December 31,

 

Three Months Ended
December 31,

 

Year Ended September 30,

 

 

 

2015

 

2014

 

2014

 

2013

 

Tax benefit (expense) computed at statutory rate of 35%

 

$

14,012,000

 

$

2,416,000

 

$

6,265,000

 

$

(6,850,000

)

Change in valuation allowance

 

 

(502,000

)

 

(170,000

)

 

(1,506,000

)

 

(1,265,000

)

State income tax benefit (expense), net of federal tax

 

 

423,000

 

 

83,000

 

 

(32,000

)

 

(1,486,000

)

Foreign losses

 

 

954,000

 

 

170,000

 

 

1,506,000

 

 

987,000

 

Transaction costs

 

 

(445,000

)

 

(522,000

)

 

(332,000

)

 

 

Other

 

 

(687,000

)

 

(65,000

)

 

(621,000

)

 

(476,000

)

​  

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Income tax benefit (expense)

 

$

13,755,000

 

$

1,912,000

 

$

5,280,000

 

$

(9,090,000

)

​  

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        The principal components of the Company's net deferred tax liability are as follows:

                                                                                                                                                                                    

 

 

December 31,
2015

 

September 30,
2014

 

Deferred tax assets:

 

 

 

 

 

 

 

Federal tax net operating loss (NOL) carryforward

 

$

23,002,000

 

$

11,205,000

 

Foreign tax NOL carryforward

 

 

3,694,000

 

 

2,441,000

 

Deferred revenue

 

 

1,193,000

 

 

297,000

 

Restricted stock

 

 

214,000

 

 

756,000

 

Workers' compensation

 

 

144,000

 

 

148,000

 

State tax NOL carryforward

 

 

850,000

 

 

792,000

 

Self-insurance

 

 

260,000

 

 

286,000

 

Canadian start-up costs

 

 

296,000

 

 

337,000

 

AMT credit carry forward

 

 

315,000

 

 

312,000

 

Foreign tax credit

 

 

1,874,000

 

 

228,000

 

Other comprehensive income

 

 

1,055,000

 

 

128,000

 

Unrecognized tax benefits

 

 

562,000

 

 

 

Other

 

 

(91,000

)

 

209,000

 

​  

​  

​  

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Total gross deferred tax assets

 

 

33,368,000

 

 

17,139,000

 

Less valuation allowance

 

 

(3,707,000

)

 

(2,771,000

)

Total net deferred tax assets

 

 

29,661,000

 

 

14,368,000

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Property and equipment

 

 

(34,980,000

)

 

(42,199,000

)

​  

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Total net deferred tax liability

 

$

(5,319,000

)

$

(27,831,000

)

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        At December 31, 2015, the Company had a gross NOL for U.S. federal income tax purposes of approximately $65,719,000. This NOL will begin to expire in 2029. The Company will carry forward the net federal NOL of approximately $23,002,000. The Company also had net state NOLs that will affect state taxes of approximately $850,000 at December 31, 2015. State NOLs began to expire in 2015. Carryback provisions are not allowed by all states, accordingly the state NOLs give rise to a deferred tax asset. Several of these carry forwards are primarily available in states where the Company believes the assets cannot be deemed to be more likely than not realizable. Based on management's belief that the net operating loss carry forwards are not realizable, a $526,000 valuation allowance, net of federal benefit was maintained to offset these deferred tax assets as of December 31, 2015. The Company also has Canadian deferred tax assets that will begin to expire in 2032. The Company has recorded a partial valuation allowance of $3,181,000 against the Canadian deferred tax assets because management believes it is currently not more likely than not to be realizable.

        In conjunction with the Merger at February 11, 2015, the Company established an accrual for unrecognized tax benefits of $715,000. At December 31, 2015, the Company increased this accrual for unrecognized tax benefits to $1,684,000. There were no unrecognized tax benefits at the three months ended December 31, 2014 or the years ended September 30, 2014 and 2013. The tax years generally subject to future examination by tax authorities are for years ended December 31, 2012 and after. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, the Company does not expect any change to have a significant impact on its results of operations. The Company's policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. There was no interest and penalties recognized in the year ended December 31, 2015, three months ended December 31, 2014 or in the years ended September 30, 2014 or 2013.