INCOME TAXES

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective tax rate for the three months ended September 30, 2023 was (10.1)% versus 21.4% for the three months ended September 30, 2022. The effective tax rate for the nine months ended September 30, 2023 and September 30, 2022 was (45.9)% and 21.9%, respectively. The effective tax rate for the three months ended September 30, 2023 was lower than the same period in the prior year due to the loss before taxes, which was primarily driven by the non-deductible goodwill impairment and loss on assets held for sale associated with the anticipated sale of the industrial motors and generators businesses. The effective tax rate for the nine months ended September 30, 2023 was lower than the same period in the prior year due to the loss before taxes, which was primarily driven by the non-deductible goodwill impairment and loss on assets held for sale associated with the anticipated sale of the industrial motors and generators businesses and the non-deductible transaction costs associated with the Altra Transaction.

As of September 30, 2023 and December 31, 2022, the Company had approximately $9.2 million and $5.7 million, respectively, of unrecognized tax benefits, all of which would impact the effective income tax rate if recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. The Company had $1.2 million of accrued interest as of September 30, 2023 and December 31, 2022.