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Income Taxes | 12 Months Ended
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Dec. 26, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income (loss) from continuing operations before income taxes are comprised of the following (in millions):
| December 26, 2021 |  | December 27, 2020 |  | December 29, 2019
Domestic | $ | (6.7) |  |  | $ | (1.6) |  |  | $ | 6.8 |
Foreign | 11.1 |  |  | 8.4 |  |  | 8.9 |
Total | $ | 4.4 |  |  | $ | 6.8 |  |  | $ | 15.7 |
The provision (benefit) for income taxes from continuing operations are comprised of the following (in millions):
| Year Ended
| December 26, 2021 |  | December 27, 2020 |  | December 29, 2019
Federal income taxes: |  |  |  |  |
Current | $ | — |  |  | $ | — |  |  | $ | (0.2) |
Deferred | (0.1) |  |  | (68.2) |  |  | (3.9) |
Total Federal | (0.1) |  |  | (68.2) |  |  | (4.1) |
State and local income taxes: |  |  |  |  |
Current | 1.5 |  |  | 0.5 |  |  | 1.0 |
Deferred | 0.5 |  |  | (9.4) |  |  | (0.9) |
Total State and local | 2.0 |  |  | (8.9) |  |  | 0.1 |
Foreign income taxes: |  |  |  |  |
Current | 2.9 |  |  | 4.2 |  |  | 9.0 |
Deferred | (0.9) |  |  | (0.6) |  |  | (0.2) |
Total Foreign | 2.0 |  |  | 3.6 |  |  | 8.8 |
Total | $ | 3.9 |  |  | $ | (73.5) |  |  | $ | 4.8 |
A reconciliation of the total income tax provision (benefit) to the amount computed by applying the statutory federal income tax rate of 21% to the income from continuing operations before income taxes for the years ended December 26, 2021, December 27, 2020 and December 29, 2019 is as follows (in millions):
| Year Ended
| December 26, 2021 |  | December 27, 2020 |  | December 29, 2019
Income tax at federal statutory rate | $ | 0.9 |  |  | $ | 1.4 |  |  | $ | 3.3 |
State taxes, net of federal tax benefit and valuation allowance | 0.5 |  |  | 0.6 |  |  | 0.6 |
Difference in tax rates between U.S. and foreign | (0.5) |  |  | 1.3 |  |  | 1.9 |
Increase (decrease) in valuation allowance | 1.2 |  |  | (80.1) |  |  | (3.3) |
Nondeductible expense | 0.8 |  |  | 0.4 |  |  | 0.5 |
Increase in reserve for uncertain tax positions | 0.9 |  |  | 3.0 |  |  | 7.7 |
Other | (0.8) |  |  | (0.1) |  |  | 0.4 |
Officer’s compensation 162(m) limitation | 0.9 |  |  | 0.6 |  |  | 0.5 |
Release of valuation allowance due to acquisitions | — |  |  | (1.3) |  |  | (5.2) |
Stock-based compensation | — |  |  | 0.7 |  |  | (1.6) |
Total | $ | 3.9 |  |  | $ | (73.5) |  |  | $ | 4.8 |
Effective January 1, 2018, the Tax Cuts and Jobs Act (“TCJA”) required the acceleration of certain types of revenue for tax purposes. The new rules prohibit the Company from deferring revenue on unbilled accounts receivable later than when the amounts are recognized as revenue for book purposes. This change impacted several accounting methods previously used by the Company and resulted in an acceleration of taxability of such revenue as compared with prior U.S. tax laws. The additional revenue will be recognized over four years beginning in 2018. Additionally, interest deductions of the Company will be limited to 50% of tax adjusted EBITDA in 2020 and 30% in future years. Additionally, effective January 1, 2018, the TCJA imposes a U.S. tax on global intangible low taxed income (“GILTI”) that is earned by certain foreign affiliates owned by a U.S. shareholder each year. The computation of GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. The Company has made a policy election to treat future taxes related to GILTI as a current period expense in the reporting period in which the tax is incurred. The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows (in millions):
| December 26, 2021 |  | December 27, 2020
Deferred tax assets: |  |  |
Stock-based compensation | $ | 9.7 |  |  | $ | 7.9 |
Payroll related accruals | 9.2 |  |  | 11.7 |
Lease accruals | 21.8 |  |  | 21.7 |
Net operating loss carryforwards | 58.1 |  |  | 66.0 |
Tax credit carryforwards | 13.1 |  |  | 11.7 |
Deferred expenses | 10.8 |  |  | 5.7 |
Other | 16.5 |  |  | 12.8 |
| 139.2 |  |  | 137.5 |
Valuation allowance | (9.0) |  |  | (7.4) |
Total deferred tax assets, net of valuation allowance | 130.2 |  |  | 130.1 |
Deferred tax liabilities: |  |  |
Unearned revenue | (4.3) |  |  | (10.7) |
Operating lease right-of-use assets | (19.6) |  |  | (19.7) |
Other intangibles | (28.0) |  |  | (24.6) |
Property and equipment, principally due to differences in depreciation | (7.1) |  |  | (7.0) |
Other | (1.6) |  |  | (1.5) |
Total deferred tax liabilities | (60.6) |  |  | (63.5) |
Net deferred tax asset | $ | 69.6 |  |  | $ | 66.6 |
During the fourth quarter of 2021, the Company evaluated all available evidence, both positive and negative, to determine whether based on the weight of that evidence, a valuation allowance for deferred tax assets was needed. Evidence evaluated by the Company included but was not limited to, its three-year cumulative income position, the results and trend of pretax book income from core operations and its forecast of taxable income. As a result, the Company determined that the majority of the Company’s U.S. deferred tax assets were more likely than not to be realized and that a valuation allowance with respect to a majority of the Company’s deferred tax assets was not required. The remaining valuation allowance on the Company’s U.S. deferred tax assets as of December 26, 2021 relates primarily to state net operating loss and capital loss carryforwards the Company estimates it may not be able to utilize in future periods. During fiscal 2021, the Company recorded a net increase in its valuation allowance of $1.6 million. At December 26, 2021, the Company had federal tax loss carryforwards of $235.9 million and various state tax loss carryforwards of $245.9 million. The federal tax loss carryforwards will begin to expire in 2031 and state tax loss carryforwards will begin to expire in 2022 in certain states. Additionally, the state capital loss carryforward generated in 2018 will begin to expire in 2023. At December 26, 2021, the Company had federal tax credit carryforwards of $12.4 million and various state tax credit carryforwards of $0.8 million. The federal tax credit carryforwards will begin to expire in 2033 and the state tax credit carryforwards do not have an expiration. Federal and state income tax laws impose restrictions on the utilization of net operating losses (“NOLs”) and tax credit carryforwards in the event that an “ownership change” occurs for tax purposes, as defined by Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”). In general, an ownership change occurs when shareholders owning 5% or more of a “loss corporation” (a corporation entitled to use NOLs or other loss carryovers) have increased their ownership of stock in such corporation by more than 50 percentage points during any 3-year period. The annual base Section 382 limitation is calculated by multiplying the loss corporation’s value at the time of the ownership change by the greater of the long-term tax-exempt rate determined by the Internal Revenue Service in the month of the ownership change or the two preceding months. This base limitation is subject to adjustments, including an increase for built-in gains recognized in the five year period after the ownership change. In tax years 2010 and 2011 the Company experienced a Section 382 “ownership change” that will limit the utilization of NOL carryforwards. Additionally, in prior years the Company acquired corporations with NOL carryforwards at the date of acquisition (“Acquired NOLs”). The Acquired NOLs are subject to separate limitations that may further restrict the use of Acquired NOLs. For the year ended December 26, 2021, there was no impact of such Section 382 limitations on the income tax provision since the amount of taxable income did not exceed the annual limitation amount. However, future equity offerings or acquisitions that have equity as a component of the purchase price could also cause an “ownership change.” If and when any other “ownership change” occurs, utilization of the NOLs or other tax attributes may be further limited. As of December 31, 2017, all accumulated undistributed earnings of our foreign subsidiaries were subject to the one-time transition tax on foreign earnings required by the 2017 Tax Cuts and Jobs Act. It is the Company’s intention to permanently reinvest undistributed earnings of its foreign subsidiaries. As such, the Company has not provided deferred U.S. income taxes or foreign withholding taxes of approximately $11.9 million on temporary differences relating to the outside basis in its investment in foreign subsidiaries. As of December 26, 2021, the Company has $29.4 million of cash and cash equivalents available for distribution. The Company is subject to taxation in the U.S., various state tax jurisdictions and various foreign tax jurisdictions. The Company’s tax years for 2001 and later are subject to examination by the U.S. and state tax authorities due to the existence of NOL carryforwards. Generally, the Company’s tax years for 2016 and later are subject to examination by various foreign tax authorities as well. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions):
Balance as of December 30, 2018 | $ | 17.7 |
Increases related to prior periods | 0.2 |
Increases related to current year tax positions | 6.3 |
Expiration of applicable statutes of limitations | (0.1) |
Decreases related to settlement with tax authorities | (0.1) |
Balance as of December 29, 2019 | 24.0 |
Increases related to prior periods | 0.2 |
Increases related to current year tax positions | 1.5 |
Expiration of applicable statutes of limitations | (0.3) |
Balance as of December 27, 2020 | 25.4 |
Increases related to prior periods | 0.1 |
Increases related to current year tax positions | 0.5 |
Expiration of applicable statutes of limitations | (0.2) |
Increases related to acquisitions | 0.1 |
Balance as of December 26, 2021 | $ | 25.9 |
Included in the balance of unrecognized tax benefits at December 26, 2021, are $25.9 million of tax benefits that, if recognized, would affect the effective tax rate. Included in this amount is $11.7 million that would become a deferred tax asset if the tax benefit were recognized. As such, this benefit may be impacted by a corresponding valuation allowance depending upon the Company’s assessment of the realizability of the deferred tax asset at the time the benefits are recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. For the years ended December 26, 2021, December 27, 2020 and December 29, 2019, the Company recorded $0.6 million, $1.9 million, and $1.3 million, respectively, in interest or penalty expenses. These amounts are netted by a benefit for interest and penalties related to the reversal of prior positions and the disposition of PSS in 2018 of $0.1 million, $0.2 million, and $0.1 million for the years ended December 26, 2021, December 27, 2020, and December 29, 2019, respectively. As of December 26, 2021, December 27, 2020, and December 29, 2019, the Company had accrued total interest and penalties of $5.0 million, $4.5 million and $2.8 million, respectively. The Company believes that it is reasonably possible that as much as $0.5 million of the liabilities for uncertain tax positions will expire within 12 months of December 26, 2021 due to the expiration of various applicable statues of limitations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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