Everforth IncEFOR
Everforth Inc Income Taxes Disclosure
Income from continuing operations before income taxes consists of the following (in millions):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| United States | $ | 146.5 | $ | 222.1 | $ | 283.5 | ||||||||||||||
| Foreign | 16.1 | 18.0 | 14.2 | |||||||||||||||||
| $ | 162.6 | $ | 240.1 | $ | 297.7 | |||||||||||||||
The provision for income taxes consists of the following (in millions):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | $ | (1.7) | $ | 19.2 | $ | 34.8 | ||||||||||||||
| State | 0.4 | 7.3 | 11.8 | |||||||||||||||||
| Foreign | 6.3 | 6.9 | 5.0 | |||||||||||||||||
| 5.0 | 33.4 | 51.6 | ||||||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal and State | 45.5 | 31.8 | 28.5 | |||||||||||||||||
| Foreign | (1.4) | (0.3) | (1.7) | |||||||||||||||||
| 44.1 | 31.5 | 26.8 | ||||||||||||||||||
| Provision for income taxes | $ | 49.1 | $ | 64.9 | $ | 78.4 | ||||||||||||||
The reconciliation between the amount computed by applying the U.S. federal statutory tax rate of 21 percent to income before income taxes and the income tax provision is as follows (in millions):
| Year Ended December 31, 2025 | ||||||||||||||
| Amount | Percent | |||||||||||||
| Income tax provision at the statutory rate | $ | 34.1 | 21.0 | % | ||||||||||
State income taxes, net of federal benefit(1) | 7.0 | 4.3 | % | |||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Nondeductible executive compensation | 3.4 | 2.1 | % | |||||||||||
| Disallowed meals and entertainment expenses | 1.0 | 0.6 | % | |||||||||||
| Stock-based compensation | 2.7 | 1.7 | % | |||||||||||
| Other | 3.3 | 2.0 | % | |||||||||||
| Tax credits | ||||||||||||||
| Work opportunity tax credit, net | (1.7) | (1.0) | % | |||||||||||
| Other | (0.7) | (0.4) | % | |||||||||||
| $ | 49.1 | 30.2 | % | |||||||||||
__________
(1)The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Illinois, New York, Texas and Virginia.
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Income tax provision at the statutory rate | $ | 50.4 | $ | 62.5 | ||||||||||
| State income taxes, net of federal benefit | 9.9 | 13.6 | ||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Nondeductible executive compensation | 1.9 | 4.2 | ||||||||||||
| Disallowed meals and entertainment expenses | 1.1 | 1.2 | ||||||||||||
| Stock-based compensation | 0.2 | (2.6) | ||||||||||||
| Tax credits | ||||||||||||||
| Work opportunity tax credit, net | (1.7) | (1.8) | ||||||||||||
| Other | 3.1 | 1.3 | ||||||||||||
| $ | 64.9 | $ | 78.4 | |||||||||||
The effective income tax rate for 2025 was 30.2 percent compared to 27.0 percent for 2024. The increase in the effective income tax rate was primarily due to higher non-deductible executive compensation related to the termination of the Company's deferred compensation plan, and tax shortfalls related to stock-based compensation arrangements. The decrease in the provision for income taxes was primarily due to lower income before income taxes in the current period.
The amounts of cash paid for taxes by jurisdiction is as follows (in millions):
| 2025 | ||||||||
| Federal | $ | — | ||||||
| State | ||||||||
| Texas | 0.7 | |||||||
| All other state | 1.8 | |||||||
| Foreign | ||||||||
| Mexico | 4.1 | |||||||
| Canada | 1.1 | |||||||
| All other foreign | 0.2 | |||||||
| Income taxes, net of amounts refunded | $ | 7.9 | ||||||
The components of deferred tax (liabilities) assets are as follows (in millions):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Intangibles | $ | (250.3) | $ | (215.6) | ||||||||||
| Depreciation expense | (21.6) | (4.6) | ||||||||||||
| Operating lease right-of-use assets | (13.3) | (15.1) | ||||||||||||
| Operating lease liabilities | 14.6 | 16.0 | ||||||||||||
| Employee-related accruals | 15.7 | 15.8 | ||||||||||||
| Stock-based compensation | 10.9 | 10.0 | ||||||||||||
| Federal tax credit carryforward | 3.8 | — | ||||||||||||
| Other | 6.3 | 6.0 | ||||||||||||
| $ | (233.9) | $ | (187.5) | |||||||||||
__________
Deferred taxes at December 31, 2025 are presented on the balance sheet as $237.3 million in deferred tax liabilities and $3.4 million in other non-current assets.
As of December 31, 2025, the Company had $2.5 million of foreign net operating losses and $6.8 million of Federal net operating loss, which will start to expire in 2030 and credit carryforwards, which will start to expire in 2045. The Company had gross deferred tax assets of $68.8 million and $59.0 million and gross deferred tax liabilities of $302.8 million and $246.2 million at December 31, 2025 and 2024, respectively. Management has determined the gross deferred tax assets are realizable. The Company has recorded an insignificant valuation allowance at December 31, 2025 and 2024, related to credits and net operating loss carryforwards.
At December 31, 2025, the Company had undistributed earnings of foreign subsidiaries of approximately $23.8 million, substantially all of which are permanently reinvested. The Company will repatriate a portion of these foreign earnings in situations it deems advantageous for business operations, tax, or cash management reasons. In doing so, the Company could be subject to state income and foreign taxes which would be insignificant. The determination of the amount of unrecognized deferred income tax liability for any basis differences on the permanently reinvested foreign earnings is not practicable due to the complexities associated with this hypothetical calculation.
At December 31, 2025 and 2024, there were $0.5 million and $1.2 million of unrecognized tax benefits, respectively, and changes during those years were not significant. If recognized, these unrecognized tax benefits would affect the annual effective tax rate. The gross unrecognized tax benefits are included in other long-term liabilities in the accompanying consolidated balance sheets. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the accompanying consolidated statements of operations and comprehensive income. The amount of interest and penalties recognized in the consolidated financial statements is not significant.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.