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Income Taxes | 12 Months Ended
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Dec. 29, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income (loss) from consolidated operations before income taxes are comprised of the following (in millions):
| December 29, 2024 |  | December 31, 2023 |  | December 25, 2022
Domestic | $ | 3.8 |  |  | $ | (9.6) |  |  | $ | (48.7) |
Foreign | 22.7 |  |  | 20.7 |  |  | 15.7 |
Total | $ | 26.5 |  |  | $ | 11.1 |  |  | $ | (33.0) |
The provision (benefit) for income taxes from consolidated operations are comprised of the following (in millions):
| Year Ended
| December 29, 2024 |  | December 31, 2023 |  | December 25, 2022
Federal income taxes: |  |  |  |  |
Current | $ | — |  |  | $ | — |  |  | $ | — |
Deferred | 7.1 |  |  | 2.4 |  |  | (4.5) |
Total Federal | 7.1 |  |  | 2.4 |  |  | (4.5) |
State and local income taxes: |  |  |  |  |
Current | 1.8 |  |  | 1.1 |  |  | (0.6) |
Deferred | (2.7) |  |  | 0.3 |  |  | 1.9 |
Total State and local | (0.9) |  |  | 1.4 |  |  | 1.3 |
Foreign income taxes: |  |  |  |  |
Current | 4.2 |  |  | 5.1 |  |  | 3.9 |
Deferred | (0.2) |  |  | (0.2) |  |  | (0.5) |
Total Foreign | 4.0 |  |  | 4.9 |  |  | 3.4 |
Total | $ | 10.2 |  |  | $ | 8.7 |  |  | $ | 0.2 |
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 consolidated operations before income taxes for the years ended December 29, 2024, December 31, 2023 and December 25, 2022 is as follows (in millions):
| Year Ended
| December 29, 2024 |  | December 31, 2023 |  | December 25, 2022
Income tax (benefit) at federal statutory rate | $ | 5.6 |  |  | $ | 2.3 |  |  | $ | (6.9) |
State taxes (benefit), net of federal tax benefit and valuation allowance | 1.9 |  |  | 3.7 |  |  | (0.3) |
Difference in tax rates between U.S. and foreign | 2.6 |  |  | 1.7 |  |  | (0.2) |
Increase (decrease) in valuation allowance | (4.2) |  |  | (2.0) |  |  | 4.9 |
Nondeductible expense | 0.5 |  |  | 0.5 |  |  | 0.5 |
Increase (decrease) in reserve for uncertain tax positions | 0.3 |  |  | 0.3 |  |  | (0.9) |
Other | 0.9 |  |  | 0.1 |  |  | 0.2 |
Officer’s compensation 162(m) limitation | 0.8 |  |  | 0.5 |  |  | 1.0 |
R&D tax credit | (0.9) |  |  | (0.9) |  |  | (0.9) |
Stock-based compensation | 2.7 |  |  | 2.5 |  |  | 2.8 |
Total | $ | 10.2 |  |  | $ | 8.7 |  |  | $ | 0.2 |
On August 16, 2022, the President signed into law the Inflation Reduction Act of 2022 which contained provisions effective January 1, 2023, including a 15% corporate minimum tax and a 1% excise tax on stock buybacks, both of which we expect to be immaterial to our financial results, financial position and cash flows. The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows (in millions):
| December 29, 2024 |  | December 31, 2023
Deferred tax assets: |  |  |
Stock-based compensation | $ | 7.3 |  |  | $ | 9.3 |
Payroll related accruals | 9.4 |  |  | 8.6 |
Lease accruals | 28.7 |  |  | 27.0 |
Net operating loss carryforwards | 33.3 |  |  | 44.7 |
Tax credit carryforwards | 12.7 |  |  | 12.2 |
Deferred expenses | 15.7 |  |  | 12.6 |
Other | 17.0 |  |  | 19.8 |
Total deferred taxes | 124.1 |  |  | 134.2 |
Valuation allowance | (7.6) |  |  | (12.6) |
Total deferred tax assets, net of valuation allowance | 116.5 |  |  | 121.6 |
Deferred tax liabilities: |  |  |
Unearned revenue | (3.2) |  |  | (2.9) |
Operating lease right-of-use assets | (25.5) |  |  | (24.2) |
Other intangibles | (19.4) |  |  | (22.2) |
Property and equipment, principally due to differences in depreciation | (6.6) |  |  | (6.3) |
Other | (2.3) |  |  | (2.0) |
Total deferred tax liabilities | (57.0) |  |  | (57.6) |
Net deferred tax asset | $ | 59.5 |  |  | $ | 64.0 |
During the fourth quarter of 2024, 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 results, and its forecast of taxable income. As a result, the Company determined that the majority of the Company’s U.S. net 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 net deferred tax assets was not required. The valuation allowance on the Company’s deferred tax assets as of December 29, 2024 relates primarily to state net operating loss carryforwards, capital loss carryforwards and research and development tax credit carryforwards the Company estimates it may not be able to utilize in future periods. During fiscal 2024, the Company recorded a net decrease in its valuation allowance of $4.2 million. At December 29, 2024, the Company had federal tax loss carryforwards of $123.2 million and various state tax loss carryforwards of $191.6 million. The federal tax loss carryforwards will begin to expire in 2034 and state tax loss carryforwards begin to expire in 2025 in certain states. At December 29, 2024, the Company had federal tax credit carryforwards of $14.7 million and various state tax credit carryforwards of $1.2 million. The federal tax credit carryforwards will begin to expire in 2025 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 tax year 2010 the Company experienced a Section 382 “ownership change” that will limit the utilization of NOL carryforwards generated before the “ownership change” date. Additionally, the Company has 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 29, 2024, there was no impact of such Section 382 limitations on the income tax provision since the amount of taxable income did not exceed NOLs available for utilization. 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 $6.5 million on temporary differences relating to the outside basis in its investment in foreign subsidiaries. As of December 29, 2024, the Company has $40.2 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 2004 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 2019 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 26, 2021 | $ | 25.9 |
Decreases related to prior periods | (0.7) |
Increases related to current year tax positions | 0.2 |
Expiration of applicable statutes of limitations | (0.4) |
Balance as of December 25, 2022 | 25.0 |
Increases related to prior periods | 0.2 |
Increases related to current year tax positions | 0.2 |
Expiration of applicable statutes of limitations | (0.1) |
Balance as of December 31, 2023 | 25.3 |
Increases related to prior periods | 0.1 |
Increases related to current year tax positions | 0.2 |
Expiration of applicable statutes of limitations | (0.2) |
Balance as of December 29, 2024 | $ | 25.4 |
Included in the balance of unrecognized tax benefits at December 29, 2024, are $22.8 million of tax benefits that, if recognized, would impact the effective tax rate. Included in this amount is $11.4 million that would become a deferred tax asset if the tax benefit were recognized. As such, this benefit may be impacted by a corresponding change in 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 29, 2024, December 31, 2023 and December 25, 2022, the Company recorded $0.3 million in interest or penalty expenses each year. These amounts are netted by a benefit for interest and penalties related to the reversal of prior positions of $0.1 million, $0.1 million, and $0.2 million for the years ended December 29, 2024, December 31, 2023, and December 25, 2022, respectively. As of December 29, 2024, December 31, 2023, and December 25, 2022, the Company had accrued total interest and penalties of $5.6 million, $5.3 million and $5.1 million, respectively.

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