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 Income Taxes
In July 2025, U.S. Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which included significant provisions modifying the U.S. tax framework. While the Company continues to evaluate the impact of OBBBA, these legislative changes did not and are not expected to have a material impact on the Company’s consolidated financial statements or disclosures.
The following table summarizes the Company’s income before income taxes (in thousands):
Years Ended December 31,
2025 2024
U.S income $ 9,322  $ 3,938 
Non-U.S. income 1,301  1,121 
Income before income taxes $ 10,623  $ 5,059 
The following table summarizes the Company’s components of the consolidated provision for income taxes (in thousands):
Years Ended December 31,
2025 2024
U.S Federal income tax expense
Current $ (5) $ — 
Deferred (2,496) (1,673)
Total U.S. Federal income tax expense
 (2,501) (1,673)
State and local income tax expense
Current (750) (488)
Deferred (232) (245)
Total state and local income tax expense (982) (733)
Foreign income tax expense
Current (513) (308)
Total income tax expense
 $ (3,996) $ (2,714)
The following table summarizes a reconciliation of the Company’s income tax (expense) benefit from the effective income tax rate to the U.S. federal statutory rate (in thousands):
Years Ended December 31,
2025 2024
Amount % of Pretax Income Amount % of Pretax Income
Income tax expense at the statutory rate $ (2,231) 21.0 % $ (1,062) 21.0 %
State and local income tax expense, net of federal income tax effect (776) 7.3 % (579) 11.4 %
Nontaxable or nondeductible items
     Meals and Entertainment (127) 1.2 % (124) 2.5 %
     Stock Options — — % (471) 9.3 %
     Non-deductible Officer's Compensation (491) 4.6 % (153) 3.0 %
     Income for Canada Disregarded Entity (165) 1.6 % (171) 3.4 %
     Other 34 (0.3 %) (2) — %
Tax credits — — % (78) 1.6 %
Foreign Tax Effects (240) 2.3 % (72) 1.4 %
Reconciling Adjustment — — % — — %
Income tax (expense) benefit at effective income tax rate $ (3,996) 37.6 % $ (2,714) 53.6 %
During 2025, state and local taxes in California, Kansas, Michigan, and Texas comprised the majority of the state and local income taxes, net of federal effect category. During 2024, state and local taxes in Texas, Michigan, Kansas, Illinois, and New York comprised the majority of the state and local income taxes, net of federal effect category

The following table illustrates incomes taxes paid by jurisdiction (in thousands):
Years Ended December 31,
2025 2024
U.S. Federal
 $ —  $ — 
U.S State and local
        Florida
 28  81 
       Georgia
 (a) 51 
       Illinois
 (a) 51 
        Michigan
 (a) 65 
       New York
 47  (a)
       Pennsylvania
 (a) 61 
       Texas
 94  50 
        Other
 180  255 
349  614 
Foreign
        Canada
 $ 194  $ 139 
Total
 $ 543  $ 753 
(a) The amount of income taxes paid during the year does not meet the 5% disaggregation threshold and is included in other.
The following table summarizes the temporary differences and carryforwards that give rise to deferred tax assets and liabilities (in thousands):
December 31, 2025 December 31, 2024
Deferred Federal, state and local tax assets –
Bad debt reserves $ 5,673  $ 4,448 
Stock-based compensation 2,343  1,806 
Net operating loss (a)
 1,385  3,434 
Operating lease liabilities 1,248  1,548 
Accrued compensation 1,067  801 
Inventories 763  713 
Research & development credits
 517  555 
Other credits 23  23 
Other 120  1,128 
Total deferred Federal, state and local tax assets
 13,139  14,456 
Deferred Federal, state and local tax liabilities –
Depreciation and asset basis differences (6,502) (4,792)
Goodwill and intangible assets (731) (737)
Right-of-use assets (1,083) (1,377)
Derivative financial instruments (183) (362)
Total deferred Federal, state and local tax liabilities
 (8,499) (7,268)
Net deferred tax assets $ 4,640  $ 7,188 
(a) At December 31, 2025 and 2024, this includes state and local net operating losses of $0.2 million and $0.4 million, respectively.
The Company’s U.S. federal net operating loss carryforward for tax purposes was $5.8 million at December 31, 2025, resulting in a federal deferred tax asset of $1.2 million; such net operating loss carryforwards have an indefinite life. The Company’s state net operating loss carryforward of approximately $0.2 million is comprised of various jurisdictions. These state net operating losses can be used for a period of 5 to 20 years and vary by state, and if unused, begin to expire in 2026, though a substantial portion expires beyond 2026. Approximately less than $0.1 million of the state net operating loss carryforwards have an indefinite life. Tax benefits of operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances.
The Company continues to monitor shifts in past ownership (as defined under Section 382 of the Code). The Company had no uncertain tax positions for the years ended December 31, 2025 and 2024.
The Company is subject to taxation for Federal and various state jurisdictions in the U.S. and Canada. The Federal income tax returns of the Company for the years 2022 through 2025 are open to examination by the Internal Revenue Service. The state income tax returns and other state tax filings of the Company are subject to examination by the state taxing authorities, for various periods generally up to four years after they are filed. Canadian income tax returns of the Company for the years 2020 through 2025 are subject to examination by the Canada Revenue Agency.