Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
18. Income Taxes:
Income from continuing operations before income taxes is shown below:
Years ended December 31,
2025 2024 2023
$ 25,786  $ 45,205  $ 56,949 
The provision (benefit) for income taxes as shown in the accompanying consolidated statements of (loss) income consists of the following:
Years ended December 31,
2025 2024 2023
Current:  
Federal $ (10,251) $ 3,287  $ 16,707 
State (2,457) 1,423  2,401 
(12,708) 4,710  19,108 
Deferred:
Federal 17,381  (2,973) (132)
State 14,825  (2,036) (10,250)
32,206  (5,009) (10,382)
Provision (benefit) for income taxes $ 19,498  $ (299) $ 8,726 
During the year ended December 31, 2025, the Company has adopted ASU 2023-09 to enhance the income taxes disclosure regarding income taxes paid and the rate reconciliation disclosure. The Company has elected to apply the guidance in ASU 2023-09 prospectively. The income taxes paid by the Company, from both continuing and discontinued operations, are as follows:
Year ended December 31,
2025
Federal $ 5,600 
State 208 
Foreign 5,240 
Income taxes paid, net of refunds $ 11,048 
Income taxes paid (net of refunds) exceeds 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
Year ended December 31,
2025
State and local taxes
Louisiana $ (557)
Other states 765 
Foreign taxes
United Kingdom 4,606 
Other foreign 634 
Cash payments for income taxes, net of refunds, which includes activity from both continuing and discontinued operations, prior to the adoption of the guidance in ASU 2023-09 is as follows:
Years ended December 31,
2024 2023
Domestic $ 22,860  $ 21,973 
Foreign 3,399  464 
Cash payments for income taxes, net of refunds $ 26,259  $ 22,437 
The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes reported were as follows:
Year ended December 31,
2025
Income from continuing operations before income taxes $ 25,786 
U.S. federal statutory tax rate 5,415  21.0  %
State and local income taxes, net of federal income tax effect (1)
12,884  50.0  %
Nontaxable or nondeductible items
Sec. 162(m) compensation disallowance 278  1.1  %
Stock compensation 819  3.2  %
Other 218  0.8  %
Changes in unrecognized tax benefits (116) (0.4) %
Provision for income taxes $ 19,498  75.6  %
(1)     Kansas makes up the majority (greater than 50%) of the state income tax expense (benefit), net of federal income tax effect category. Additionally, this line item includes tax expense of $13,305 related to the establishment of a valuation allowance on the Company’s Kansas Investment Tax Credits (“ITCs”). After the Advanced Materials & Catalysts divestiture, the Company determined that it is no longer more likely than not that these credits will be realized as it no longer owns the Kansas property which previously qualified for the respective ITCs.
A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax (benefit) expense prior to the adoption of the guidance in ASU 2023-09 is as follows:
Years ended December 31,
2024 2023
Tax at statutory rate $ 9,493  $ 11,959 
State income taxes, net of federal income tax benefit (919) 1,859 
Changes in uncertain tax positions (9,413) 985 
State credit - valuation allowance release —  (10,203)
Stock compensation 222  1,624 
Compensation disallowance under 162(m) 148  2,088 
Other, net 170  414 
(Benefit) provision for income taxes $ (299) $ 8,726 
Deferred tax assets (liabilities) are comprised of the following:
December 31,
2025 2024
Deferred tax assets:
Net operating loss carryforwards $ 13,300  $ 13,667 
Interest disallowance carryforward —  2,968 
Pension —  280 
Inventory 1,389  — 
Operating lease liability 10,424  8,163 
Other 10,811  17,795 
State credits 13,305  14,359 
Total deferred tax assets, gross 49,229  57,232 
Valuation allowance (20,790) (7,588)
Total deferred tax assets, net 28,439  49,644 
Deferred tax liabilities:
Depreciation $ (69,470) $ (67,888)
Pension (57) — 
Inventory —  (3,306)
Intangibles (58,478) (70,677)
Operating lease right-of-use assets (10,363) (8,189)
Other (3,359) (4,979)
Total deferred tax liabilities (141,727) (155,039)
Net deferred tax liabilities $ (113,288) $ (105,395)
Under the tax laws of various jurisdictions in which we operate, deductions or credits that cannot be fully utilized for tax purposes during the year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future year. As of December 31, 2025, the Company has $13,305 of deferred tax assets related to state tax credits, which are subject to a 16-year carryforward period. The Company has recorded a full valuation allowance against the state tax credits as it is more likely than not that the benefit from these state tax credits will not be realized. The Company has $13,300 of deferred tax assets related to state net operating losses, which are subject to various carryforward periods of 5 to 20 years. A partial valuation allowance of $7,485 has been recorded due to the expected expiration of these state net operating losses before they are able to be utilized.
The change in net deferred tax liabilities for the years ended December 31, 2025 and 2024 was primarily driven by the Advanced Materials & Catalysts sale and reversal of the related deferred balances, differences between book and tax basis depreciation, activity with respect to tax deductible goodwill, activity with respect to interest rate caps recorded against other comprehensive income, activity with respect to the interest disallowance carryforward and activity with respect to the amortization of previously capitalized research and experimentation costs.
The net change in the total valuation allowance was an increase of $13,202 in 2025. The valuation allowance at December 31, 2025 was related to state net operating loss carryforwards and state tax credits that, in the judgment of management, are not more likely than not to be realized. In assessing the ability to realize deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of
deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies that are prudent in making this assessment. In order to fully realize deferred tax assets, the Company will need to generate future taxable income prior to the expiration of the net operating loss and credit carryforwards. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.
The following table summarizes the activity related to the Company’s gross unrecognized tax benefits. The amounts listed in the below table also represents the total unrecognized tax benefits that, if recognized, would impact the effective tax rate as of December 31, 2025 and 2024, respectively:
Years ended December 31,
2025 2024
Balance at beginning of period $ 87  $ 8,110 
Uncertain tax benefit sustained due to lapsing of statue of limitations (87) (8,023)
Balance at end of period $ —  $ 87 
To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment. There were no interest and penalties recognized in provision (benefit) for income taxes on continuing operations for the year ended December 31, 2025. The total amount of interest and penalties recognized in provision (benefit) for income taxes on continuing operations was $1,390 for the year ended December 31, 2024. There were no accrued interest and penalties as of December 31, 2025.
The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction. The following describes the open tax years, by significant tax jurisdiction, as of December 31, 2025:
Jurisdiction Period
United States-Federal 2022-2025
United States-State 2020-2025
Given that the Company has utilized state net operating losses in the current and prior years, the statute for examination by the state taxing authorities will typically remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above.