XML 43 R27.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Income Taxes
 12 Months Ended
Apr. 27, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes consists of the following:
Fiscal Year Ended
(52 weeks)(52 weeks)(53 weeks)
(Amounts in thousands)4/27/20244/29/20234/30/2022
United States$145,854 $177,940 $164,432 
Foreign19,898 27,849 41,059 
Total$165,752 $205,789 $205,491 
Income tax expense (benefit) consists of the following components:
Fiscal Year Ended
(52 weeks)(52 weeks)(53 weeks)
(Amounts in thousands)4/27/20244/29/20234/30/2022
Federal
Current $29,637 $31,945 $30,793 
Deferred(1,529)4,960 2,303 
State
Current 9,823 10,345 9,191 
Deferred(318)1,537 1,060 
Foreign
Current 4,534 7,237 11,632 
Deferred(1,031)(2,176)(1,816)
Total income tax expense$41,116 $53,848 $53,163 

Our effective tax rate differs from the U.S. federal income tax rate for the following reasons:

Fiscal Year Ended
(52 weeks)(52 weeks)(53 weeks)
(% of income before income taxes)4/27/20244/29/20234/30/2022
Statutory tax rate21.0 %21.0 %21.0 %
Increase (reduction) in income taxes resulting from:
State income taxes, net of federal benefit4.3 %4.5 %3.9 %
Losses/(gains) on corporate owned life insurance(0.6)%0.2 %— %
Fair value adjustment of contingent consideration liability— %(0.1)%(0.3)%
Miscellaneous items0.1 %0.6 %1.3 %
Effective tax rate24.8 %26.2 %25.9 %

For our Canada and Mexico foreign operating units, we permanently reinvest the earnings and consequently do not record a deferred tax liability relative to the undistributed earnings. We have reinvested approximately $63.0 million of the earnings. After enactment of the Tax Cuts and Jobs Act in 2017, the potential deferred tax attributable to these earnings would be approximately $2.9 million, primarily related to foreign withholding taxes and state income taxes. The Company is not permanently reinvested on undistributed earnings for its Thailand and United Kingdom foreign operating units and has provided for deferred tax attributable to those earnings of approximately $1.4 million as of the end of fiscal 2024.
The primary components of our deferred tax assets and (liabilities) were as follows:

(Amounts in thousands)4/27/20244/29/2023
Assets
Leases$121,696 $110,993 
Deferred and other compensation15,541 19,475 
State income tax—net operating losses, credits and other4,787 5,126 
Warranty6,985 7,213 
Workers' compensation1,823 1,817 
Bad debt1,587 1,475 
Employee benefits3,153 2,159 
Federal net operating losses, credits152 530 
Other1,822 2,198 
Valuation allowance(1,460)(3,468)
Total deferred tax assets156,086 147,518 
Liabilities
Right of use lease assets(113,628)(104,067)
Property, plant and equipment(13,995)(19,936)
Inventory(954)(1,802)
Goodwill and other intangibles(16,709)(14,128)
Tax on undistributed foreign earnings(1,365)(1,152)
Net deferred tax assets$9,435 $6,433 

The deferred tax assets associated with loss carry forwards and the related expiration dates are as follows:

(Amounts in thousands)AmountExpiration
Federal net operating losses$152 Fiscal 2039
Various U.S. state net operating losses (excluding federal tax effect)1,556 Fiscal 2025-2039
Foreign capital losses146 Indefinite
Foreign net operating losses184 Indefinite

We evaluate our deferred taxes to determine if a valuation allowance is required. Accounting standards require that we assess whether a valuation allowance should be established based on the consideration of all available evidence using a "more likely than not" standard with significant weight being given to evidence that can be objectively verified.

The evaluation of the amount of net deferred tax assets expected to be realized necessarily involves forecasting the amount of taxable income that will be generated in future years. We have forecasted future results using estimates management believes to be reasonable. We based these estimates on objective evidence such as expected trends resulting from certain leading economic indicators. Based upon our net deferred tax asset position at April 27, 2024, we estimate that approximately $26.6 million of future taxable income would need to be generated to fully recover our net deferred tax assets. The realization of deferred income tax assets is dependent on future events and actual results may vary from management's forecasts due to economic volatility and uncertainty along with unpredictable complexities in the global supply chain. Such variances could result in adjustments to the valuation allowance on deferred tax assets in future periods, and such adjustments could be material to the financial statements.
A summary of the valuation allowance by jurisdiction is as follows:

(Amounts in thousands)4/27/20244/29/2023Change
U.S. Federal$— $1,822 $(1,822)
U.S. State1,310 1,496 (186)
Foreign150 150 — 
Total$1,460 $3,468 $(2,008)

The remaining valuation allowance of $1.5 million is primarily related to certain U.S. state and foreign deferred tax assets. The U.S. state deferred taxes are primarily related to state net operating losses and state tax credits. The foreign deferred taxes are primarily related to capital losses.

As of April 27, 2024, we had a gross unrecognized tax benefit of $1.2 million related to uncertain tax positions in various jurisdictions. A reconciliation of the beginning and ending balance of these unrecognized tax benefits is as follows:

Fiscal Year Ended
(52 weeks)(52 weeks)(53 weeks)
(Amounts in thousands)4/27/20244/29/20234/30/2022
Balance at the beginning of the period$1,084 $1,037 $1,069 
Additions:
Positions taken during the current year168 109 121 
Positions taken during the prior year50 83 10 
Reductions:
Positions taken during the prior year— — (23)
Reductions resulting from the lapse of the statute of limitations(127)(145)(140)
Balance at the end of the period$1,175 $1,084 $1,037 

We recognize interest and penalties associated with uncertain tax positions in income tax expense. We had approximately $0.5 million and $0.4 million accrued for interest and penalties as of April 27, 2024 and April 29, 2023, respectively.

If recognized, $1.0 million of the total $1.2 million of unrecognized tax benefits would decrease our effective tax rate. We do not expect that the net liability for uncertain income tax positions will significantly change within the next 12 months. The remaining balance will be settled or released as tax audits are effectively settled, statutes of limitation expire, or other new information becomes available.

Our U.S. federal income tax returns for fiscal years 2021 and subsequent years are still subject to audit. In addition, we conduct business in various states. The major states in which we conduct business are subject to audit for fiscal years 2020 and subsequent years. Our foreign operations are subject to audit for fiscal years 2014 and subsequent years.

Cash paid for taxes (net of refunds received) during the fiscal years ended April 27, 2024, April 29, 2023, and April 30, 2022, was $34.2 million, $69.9 million, and $38.6 million, respectively.