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INCOME TAXES

12 Months Ended

Dec. 29, 2023

INCOME TAXES

INCOME TAXES

11. INCOME TAXES

The provision for income taxes is comprised of ⁽¹⁾:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Fiscal Year
​		2023			2022			2021
​	​	(in thousands)								​
Current federal taxes	​	$	61	​	$	(1,224)	​	$	(1,606)	​
Current state taxes	​		676	​		(73)	​		530	​
Current foreign taxes	​	​	—	​	​	—	​	​	—	​
Deferred federal taxes	​		2,022	​		(1,519)	​		(2,656)	​
Deferred state taxes	​		906	​		(188)	​		(255)	​
​	​	$	3,665	​	$	(3,004)	​	$	(3,987)	​

(1) Revenue from the Company’s foreign operations was immaterial for fiscal years 2023, 2022 and 2021.

The provision for income taxes reconciles to the amounts computed by applying the statutory federal tax rate of 21% for fiscal years 2023, 2022 and 2021 to the Company’s income before income taxes. The sources and tax effects of the differences for fiscal years 2023, 2022 and 2021 are as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​		2023			2022			2021
​	​	(in thousands)								​
Computed “expected” federal income tax expense	​	$	3,064	​	$	(2,405)	​	$	(2,605)	​
Permanent differences	​		194	​		24	​		18	​
Nondeductible executive compensation	​	​	121	​	​	711	​	​	1,349	​
Stock options and disqualifying dispositions	​	​	560	​	​	576	​	​	(1,276)	​
Energy efficient building deduction	​	​	(717)	​	​	(1,378)	​	​	(558)	​
Current and deferred state income tax expense, net of federal benefit	​		1,250	​		(111)	​		(660)	​
Research and development tax credit	​	​	(867)	​	​	(517)	​	​	(761)	​
Federal rate differential on NOL carryback	​	​	—	​	​	—	​	​	(579)	​
Change in valuation allowance	​	​	—	​	​	—	​	​	1,105	​
Other	​		60	​		96	​		(20)	​
​	​	$	3,665	​	$	(3,004)	​	$	(3,987)	​
​	​	​	​	​	​	​	​	​	​	​

​

The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets and liabilities are as follows:

​

​	​	​	​	​	​	​
​	​	December 29,		​	December 30,
​		2023			2022
​	​	(in thousands)
Deferred tax assets:	​	​	​	​	​	​
Other accrued liabilities	​	$	2,907	​	$	1,374
Federal and state net operating losses	​	​	15,890	​	​	23,089
Lease liability	​	​	3,977	​	​	3,592
Stock compensation	​	​	1,214	​	​	1,404
Capitalized research and development	​	​	4,286	​	​	2,078
Credit carryforwards	​	​	2,819	​	​	1,754
Excess business interest limitation	​	​	84	​	​	1,437
Other	​		432	​		207
Total deferred tax assets	​		31,609	​		34,935
Valuation allowance	​		(1,191)	​		(1,191)
Net deferred tax assets	​	$	30,418	​	$	33,744
Deferred tax liabilities:	​	​	​	​	​	​
Deferred revenue	​	$	(2,960)	​	$	(4,223)
Fixed assets	​	​	(3,013)	​	​	(2,778)
Intangible assets	​	​	(4,926)	​	​	(4,794)
Lease right-of-use assets	​	​	(3,558)	​	​	(3,406)
Total deferred tax liabilities	​		(14,457)	​		(15,201)
Net deferred tax asset	​	$	15,961	​	$	18,543
​	​	​	​	​	​	​

​

As of December 29, 2023, the Company had federal and state operating loss carryovers of $52.8 million and $77.2 million, respectively, and federal and state tax credit carryforwards of $2.6 million and $0.3 million, respectively. Out of the federal operating loss carryovers, $13.2 million will carryforward indefinitely. The remaining carryovers will begin to expire in 2026 through 2042.

During each fiscal year, management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize existing deferred tax assets. During fiscal year 2023 and 2022, no changes were made to tax valuation allowance as the available positive and negative evidence did not warrant a revision.

As of December 29, 2023 and December 30, 2022, the Company’s liabilities related to uncertain tax positions were immaterial to the consolidated financial statements. The Company may be subject to examination by the Internal Revenue Service (“IRS”) for calendar years 2020 through 2023. The Company may also be subject to examination on certain state and local jurisdictions for the years 2019 through 2023.

The Company's policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. As of December 29, 2023 and December 30, 2022, the Company did not have any unrecognized tax benefits. In addition, during the fiscal year 2023, the Company did not have any additions or reductions of unrecognized tax benefits.

​

​

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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

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