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Income Taxes | 12 Months Ended
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Dec. 28, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | L. Income Taxes Significant components of the income tax provision (benefit) for fiscal 2024, 2023, and 2022 were as follows:
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 37,971 |  |  | $ | 36,556 |  |  | $ | 10,453 |
State |  |  | 9,880 |  |  |  | 7,650 |  |  |  | 4,683 |
Total current |  |  | 47,851 |  |  |  | 44,206 |  |  |  | 15,136 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (17,175 | ) |  |  | (10,816 | ) |  |  | 8,196 |
State |  |  | (2,769 | ) |  |  | (52 | ) |  |  | 841 |
Total deferred |  |  | (19,944 | ) |  |  | (10,868 | ) |  |  | 9,037 |
Total income tax provision |  | $ | 27,907 |  |  | $ | 33,338 |  |  | $ | 24,173 |
The reconciliations to statutory rates for fiscal 2024, 2023, and 2022 were as follows:
|  | 2024 |  |  | 2023 |  |  | 2022 |
Statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal benefit |  |  | 5.5 |  |  |  | 4.8 |  |  |  | 4.1 |
Non-deductible compensation under Internal Revenue Code Section 162(m) |  |  | 1.1 |  |  |  | 3.4 |  |  |  | 0.2 |
Non-deductible meals & entertainment |  |  | 2.1 |  |  |  | 1.2 |  |  |  | 0.6 |
Change in valuation allowance |  |  | 3.0 |  |  |  | 1.0 |  |  |  | 1.2 |
Deduction relating to excess stock-based compensation |  |  | 0.6 |  |  |  | 0.1 |  |  |  | (0.9 | )
Other |  |  | (1.4 | ) |  |  | (1.1 | ) |  |  | 0.2 |
|  |  | 31.9 | % |  |  | 30.4 | % |  |  | 26.4 | %
Significant components of the Company’s deferred tax assets and liabilities were as follows at:
|  | December 28, 2024 |  |  | December 30, 2023 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |
Lease liabilities |  | $ | 9,669 |  |  | $ | 12,034 |
Stock-based compensation expense |  |  | 9,415 |  |  |  | 8,062 |
Accrued expenses |  |  | 3,714 |  |  |  | 4,146 |
Inventory reserves |  |  | 8,282 |  |  |  | 4,689 |
Loss carryforwards and tax credit carryforwards |  |  | 3,216 |  |  |  | 2,553 |
Capitalized research and development |  |  | 3,598 |  |  |  | 2,954 |
Intangible assets amortization |  |  | 433 |  |  |  | — |
Other |  |  | 1,710 |  |  |  | 1,091 |
Total deferred tax assets |  |  | 40,037 |  |  |  | 35,529 |
Valuation allowance |  |  | (8,203 | ) |  |  | (5,808 | )
Total deferred tax assets, net of valuation allowance |  |  | 31,834 |  |  |  | 29,721 |
Deferred tax liabilities: |  |  |  |  |  |
Property, plant, and equipment |  |  | (84,081 | ) |  |  | (90,372 | )
Right-of-use assets |  |  | (7,643 | ) |  |  | (9,590 | )
Intangible assets amortization |  |  | — |  |  |  | (8,244 | )
Prepaid expenses |  |  | (5,913 | ) |  |  | (7,236 | )
Total deferred tax liabilities |  |  | (97,637 | ) |  |  | (115,442 | )
Net deferred tax liabilities |  | $ | (65,803 | ) |  | $ | (85,721 | )
The Company’s policy is to classify interest and penalties related to income tax matters in income tax expense. Interest and penalties included in the provision for income taxes amounted to $(0.2) million in fiscal year 2024, $0.1 million in fiscal year 2023, and $0 in fiscal years 2022. Accrued interest and penalties amounted to $0.1 million at December 28, 2024 and $0.2 million at December 30, 2023. A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal 2024 and 2023 was as follows:
|  | 2024 |  |  | 2023 |
|  | (in thousands) |
Balance at beginning of period |  | $ | 303 |  |  | $ | 243 |
Increases related to current period tax positions |  |  | 33 |  |  |  | 69 |
Increases related to prior period tax positions |  |  | 309 |  |  |  | 4 |
Decreases related to lapse of statute of limitations |  |  | (165 | ) |  |  | (13 | )
Balance at end of period |  | $ | 480 |  |  | $ | 303 |
Included in the balance of unrecognized tax benefits at December 28, 2024 and December 30, 2023 are potential net benefits of $0.5 million and $0.3 million, respectively, that would favorably impact the effective tax rate if recognized. Unrecognized tax benefits are included in accrued expenses in the accompanying consolidated balance sheets and adjusted in the period in which new information about a tax position becomes available or the final outcome differs from the amount recorded. As of December 28, 2024, the Company’s 2021, 2022, and 2023 federal income tax returns remain subject to examination by the IRS. The Company’s state income tax returns remain subject to examination for three or four years depending on the state’s statute of limitations. In addition, the Company is generally obligated to report changes in taxable income arising from federal income tax audits. The Company is not currently under any income tax audits as of December 28, 2024. As of December 28, 2024, the Company’s deferred tax assets include a valuation allowance of $8.2 million, compared to $5.8 million at December 30, 2023. The valuation allowance as of December 28, 2024 and December 30, 2023 was primarily related to stock-based compensation expected by management to be non-deductible under Internal Revenue Code, Section 162(m), as well as jurisdictional losses not expected to be utilized before expiring. The net increase in total valuation allowance was $2.4 million from December 30, 2023 to December 28, 2024, compared to a net increase of $1.2 million from December 31, 2022 to December 30, 2023 and a net increase of $1.3 million from December 25, 2021 to December 31, 2022.

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