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Income Taxes
 12 Months Ended
Apr. 27, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following tables reflect the significant components of our income tax provision. The pretax income (loss) attributable to domestic and foreign operations was as follows:
Year Ended
April 27, 2024April 29, 2023April 30, 2022
Domestic$46,763 $10,125 $(2,696)
Foreign7,288 3,132 3,804 
Income before income taxes$54,051 $13,257 $1,108 
Income tax expense (benefit) consisted of the following:
Year Ended
April 27, 2024April 29, 2023April 30, 2022
Current:
Federal$21,174 $6,321 $644 
State5,512 1,381 452 
Foreign1,813 2,273 975 
Deferred:
Federal(8,101)(3,025)(1,020)
State(1,045)(456)(476)
Foreign77 (39)(59)
$19,430 $6,455 $516 
The reconciliation of the provision for income taxes and the amount computed by applying the federal statutory rate to income before income taxes is as follows:
Year Ended
April 27, 2024April 29, 2023April 30, 2022
Computed income tax expense at federal statutory rates$11,351 $2,784 $233 
State taxes, net of federal benefit3,771 731 139 
Change in fair value on convertible debt3,476 — — 
Change in valuation allowances2,076 2,078 609 
Research and development tax credit(1,203)(684)(382)
Foreign-Derived Intangible Income (FDII)(322)(128)(5)
Meals and entertainment282 149 67 
Stock compensation(178)262 150 
Other, net114 288 (179)
Effect of foreign tax rates different than statutory79 417 (43)
Change in uncertain tax positions(35)(86)(71)
GILTI19 6 (14)
Base Erosion Anti-Abuse Tax (BEAT)— 87 12 
Goodwill Impairment— 551 — 
$19,430 $6,455 $516 

Our effective tax rate for fiscal 2024 was 35.9 percent. The effective income tax rate for fiscal 2024 was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.
Our effective tax for fiscal 2023 was 48.7 percent. During fiscal 2023, our effective income tax rate was impacted due to valuation allowances on equity investments and on foreign net operating losses in Ireland, goodwill impairment, state taxes, a mix of taxes in foreign countries where the tax rate is higher than the United States, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.
Our effective tax for fiscal 2022 was 46.6 percent. During fiscal 2022, our effective income tax rate was impacted by tax benefits from permanent tax credits offset by valuation allowances as well as other various permanent tax adjustments and state taxes with additional expense for prior year provision to return adjustments.
The components of the net deferred tax assets were as follows:
April 27, 2024April 29, 2023
Deferred tax assets:
Accrued warranty obligations$9,361 $8,088 
Vacation accrual2,170 1,732 
Deferred maintenance revenue777 484 
Allowance for excess and obsolete inventory3,362 2,779 
Equity compensation234 255 
Allowance for credit losses accounts1,015 928 
Inventory capitalization3,956 1,339 
Accrued compensation and benefits424 395 
Unrealized loss on foreign currency exchange— 206 
Net operating loss carry forwards885 1,024 
Outside basis difference in equity method investments6,295 3,819 
Section 174 Capitalization9,878 5,225 
Research and development tax credit carry forwards72 210 
Lease accounting - lease liability1,038 1,426 
Other630 929 
Total deferred tax assets40,097 28,839 
Valuation allowance(7,197)(4,900)
Net deferred tax assets32,900 23,939 
Deferred tax liabilities:
Property and equipment(5,506)(5,292)
Lease accounting - right of use asset(1,020)(1,411)
Prepaid expenses(477)(471)
Unrealized gain on foreign currency exchange(64)— 
Other(114)(93)
Total deferred tax liabilities(7,181)(7,267)
Net deferred tax asset$25,719 $16,672 
The classification of the net deferred tax assets in the accompanying consolidated balance sheets is:
April 27, 2024April 29, 2023
Non-current assets$25,862 $16,867 
Non-current liabilities(143)(195)
$25,719 $16,672 
The summary of changes in the amounts related to unrecognized uncertain tax benefits are:
April 27, 2024April 29, 2023
Balance at beginning of year$392 $477 
Gross increases related to prior period tax positions15 12 
Gross decreases related to prior period tax positions(3)(56)
Gross increases related to current period tax positions123 124 
Lapse of statute of limitations(171)(165)
Balance at end of year$356 $392 
All of our unrecognized tax benefits would have an impact on the effective tax rate if recognized. It is reasonably possible that the amount of unrecognized tax benefits could change due to one or more of the following events occurring in the next 12 months: expiring statutes, audit activity, tax payments, or competent authority proceedings. A statute of limitations relating to $34 of the unrecognized tax benefits (including interest) expires in the next 12 months. The benefit will be recognized if the statute lapses with no further action taken by regulators. Additionally, we recognized the release of $171 in unrecognized tax benefits related to the lapse of a statute of limitations in fiscal 2024.
Interest and penalties incurred associated with uncertain tax positions are included in the "Income tax expense" line item in our consolidated statements of operations. Accrued interest and penalties are included in the related tax liability line item in our consolidated balance sheets of $21 and $28 as of April 27, 2024 and April 29, 2023, respectively.
As of April 27, 2024, we had total valuation allowances against deferred tax assets of $7,197, as compared to $4,900 as of April 29, 2023, representing an increase of $2,297 during fiscal 2024. The increase in valuation allowance as well as the majority of the total balance is related to the outside basis difference and impairments in equity method investments. A small portion of the total valuation allowances are related to foreign net operating loss carryfowards as detailed below. We consider all positive and negative evidence available in determining the potential of realizing deferred tax assets including its past operating results and the forecast of future earnings, category of income, future taxable income, and prudent and feasible tax planning strategies. If sufficient evidence of our ability to generate applicable taxable income in the jurisdictions in which we currently maintain a valuation allowance causes us to determine that our deferred tax assets are more likely than not realizable, we would release our valuation allowance, which would result in an income tax benefit being recorded in our consolidated statements of operations.
As of April 27, 2024, we had foreign net operating loss (“NOL”) carryforwards of approximately $5,136 primarily related to our operations in Belgium and Ireland, which have indefinite lives. A deferred tax asset has been recorded for all NOL carryforwards totaling approximately $883. However, due to uncertainty in future taxable income, a valuation allowance has been recorded for the full amount of the asset.
Additional tax information:
We are subject to United States federal income tax as well as income taxes of multiple state and foreign jurisdictions. Fiscal years 2021, 2022 and 2023 remain open to federal tax examinations, and fiscal years 2020, 2021, 2022 and 2023 remain open for state income tax examinations. Certain subsidiaries are also subject to income tax in several foreign jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2013. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense in our consolidated statements of operations.
As of April 27, 2024, we had no deferred tax liability recognized relating to our investment in foreign subsidiaries where the earnings have been indefinitely reinvested. The Tax Act of 2017 generally eliminates United States federal income taxes on dividends from foreign subsidiaries, and, as a result, the accumulated undistributed earnings would be subject only to other taxes, such as withholding taxes and state income taxes, on the distribution of such earnings. No additional withholding or income taxes have been provided for any remaining undistributed foreign earnings not subject to the one-time deemed repatriation tax, as it is our intention for these amounts to continue to be indefinitely reinvested in foreign operations in all of our non-United States jurisdictions.