Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company’s effective tax rate represents the Company’s estimated tax rate for the year based on projected income, adjusted for any discrete transactions occurring during the period. Discrete transactions during the nine months ended September 30, 2026 related to changes in the fair value of contingent consideration associated with the Passenger business sale and Keystone acquisition, receipt of the earn-out from the Passenger business sale, the 2026 Acquisitions, as well as the accelerated amortization of the Keystone and Trinity trademark intangibles.
For the three and nine months ended September 30, 2026 and 2025, no income tax expense (benefit) was recognized through continuing operations. The Company maintains a full valuation allowance on net deferred tax assets as of September 30, 2026 and December 31, 2025, primarily due to uncertainties of the future utilization of deferred tax assets relating primarily to net operating loss (“NOL”) carryforwards for U.S. federal and state income tax purposes. The Company will continue to maintain a full valuation allowance until there is sufficient evidence to support the reversal of all or some portion of the balance. Given the Company’s recent history of earnings, management believes there is a reasonable possibility that, during the year, sufficient positive evidence may become available to support a conclusion that a significant portion of the valuation allowance recorded against the deferred tax assets will be reversed. The reversal would result in an income tax benefit for the period in which the Company releases the valuation allowance. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that the Company actually achieves.
The Company’s net deferred tax liability is what is commonly referred to as a "naked credit" or "hanging credit". A naked credit exists when a company is subject to a valuation allowance and maintains a deferred tax liability that cannot be considered as a source of future taxable income for valuation allowance purposes, either because its reversal is indefinite in nature or otherwise. The result of a naked credit is a deferred tax liability that remains on the balance sheet.
|