Cadre Holdings, Inc. Income Taxes Disclosure

Consolidated income from continuing operations before provision for income taxes consisted of the following:

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The provision for income taxes is detailed below:

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The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the Company’s consolidated financial statements:

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Deferred taxes have not been recognized for the excess financial reporting basis over the tax basis of investments of foreign subsidiaries. It is the Company’s intent to permanently reinvest the earnings of those foreign subsidiaries in those jurisdictions. It is not practical to determine the amount of any unrecognized deferred tax liability on this item.

Deferred income tax assets and liabilities are determined based on the difference between the financial reporting carrying amounts and tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. The tax effects of temporary differences giving rise to significant components of the Company’s deferred income tax assets and liabilities are as follows:

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In assessing the realizability of deferred income tax assets, the Company performs an evaluation of whether it is more likely than not that some portion, or all, of its deferred income tax assets will not be realized. During the course of this evaluation, the Company considers all available positive and negative evidence and if, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded.

As of December 31, 2024, the Company had net operating loss carryforwards that expire in varying amounts beginning in 2025 through 2041 and tax credit carryforwards that expire in varying amounts beginning in 2025 through 2040.

The total amount of unrecognized benefits on uncertain tax positions that, if recognized, would affect the Company’s effective tax rate was $1,977 as of December 31, 2024. A reconciliation of the change in the unrecognized income tax benefit for the years ended December 31, 2024 and 2023 is as follows:

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The Company recognizes interest expense and penalties related to unrecognized tax benefits as income tax expense. No amounts representing penalties and interest were recorded as income tax expense during the years ended December 31, 2024, 2023 and 2022. The Company had no interest or penalties accrued in the consolidated balance sheets as of December 31, 2024 and 2023.

The Company and its subsidiaries file income tax returns in the U.S. federal, various state and local, and certain foreign jurisdictions. As of December 31, 2024, the Company’s tax years subsequent to 2017 are subject to examination by tax authorities with few exceptions.