Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 8 – Income Taxes:

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 September 30, 2022, the Company recorded a benefit from income taxes of $4.2 million, which represents an effective tax rate of 25.0%. For the three months ended September 30, 2021, the Company recorded a provision for income taxes of $1.8 million, which represents an effective tax rate of 17.8%. For the nine months ended September 30, 2022, the Company recorded a benefit from income taxes of $5.0 million, which represents an effective tax rate of 12.9%. For the nine months ended September 30, 2021, the Company recorded a provision for income taxes of $3.7 million, which represents an effective tax rate of 12.8%. Income tax expense for the three months ended September 30, 2022 was impacted by a tax benefit of $4.3 million relating to the deductible portion of the goodwill impairment. The effective tax rate for the three months ended September 30, 2022 was impacted by the nondeductible portion of the goodwill impairment charge totaling $0.8 million. Income tax expense for the nine months ended September 30, 2022 was impacted by a tax benefit of $6.4 million relating to the impairment of intangible assets and a portion of the goodwill impairment. The effective tax rate for the nine months ended September 30, 2022 was impacted by the nondeductible portion of the goodwill impairment charge totaling $21.1 million. Income tax expense for the nine months ended September 30, 2021 was favorably impacted by a reversal of $1.8 million in deferred tax liabilities associated with the termination of the Company’s two qualified defined benefit pension plans, $0.8 million of windfall tax benefits from stock options exercised and $0.6 million of stranded tax benefits recognized as a result of the Company’s termination of its pension plans.