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Note 10 - Income Taxes
 12 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(10) Income Taxes

 

The components of the provision for income taxes are as follows:

 

   

Year Ended

  
   

September 30,

    

October 1,

    

October 2,

  

(Dollars in thousands)

  

2023

    

2022

    

2021

  

Provision for income taxes:

                        

Current:

                        

Federal

   $ 8,320     $ 33,377     $ 17,904  

State

     782       3,012       1,707  
      9,102       36,389       19,611  

Deferred:

                        

Federal

     335       627       (180 )

State

     (97 )     (300 )     62  
      238       327       (118 )
                         

Income taxes

   $ 9,340     $ 36,716     $ 19,493  
                         

Effective income tax rate

     22.4 %     22.7 %     22.6 %

 

The reconciliation between income taxes computed at the federal statutory rate and the provision for income taxes is as follows:

 

   

Year Ended

  

(Dollars in thousands)

  

September 30, 2023

    

October 1, 2022

    

October 2, 2021

  

Provision for income taxes at federal statutory rate

   $ 8,768       21.0 %   $ 33,963       21.0 %   $ 18,082       21.0 %

State income taxes, net of federal tax benefit

     548       1.3       2,108       1.3       1,544       1.8  

Stock-based compensation

     (55 )     (0.1 )     (255 )     (0.2 )     (253 )     (0.3 )

Valuation allowance

     (29 )     (0.1 )     (41 )     (0.0 )     (134 )     (0.2 )

Nondeductible expenses and other, net

     108       0.3       941       0.6       254       0.3  

Provision for income taxes

   $ 9,340       22.4 %   $ 36,716       22.7 %   $ 19,493       22.6 %

 

The components of deferred tax assets and liabilities are as follows:

 

   

September 30,

    

October 1,

  

(In thousands)

  

2023

    

2022

  

Deferred tax assets:

                

Defined benefit plans

   $ 2,551     $ 2,617  

Accrued expenses and asset reserves

     2,392       2,430  

Stock-based compensation

     1,288       1,176  

R & E Capitalization

     125       -  

Operating lease liability

     434       353  

State net operating loss carryforwards and tax credits

     158       142  

Valuation allowance

     (3 )     (32 )

Deferred tax assets

     6,945       6,686  
                 

Deferred tax liabilities:

                

Plant and equipment

     (12,143 )     (11,546 )

Prepaid insurance

     (1,123 )     (1,279 )

Right of use assets

     (435 )     (352 )

Goodwill

     (787 )     (595 )

Deferred tax liabilities

     (14,488 )     (13,772 )

Net deferred tax liability

   $ (7,543 )   $ (7,086 )

 

As of September 30, 2023 and October 1, 2022, we recorded deferred tax liabilities (net of valuation allowances) of $7.5 million and $7.1 million, respectively, in other liabilities on our consolidated balance sheet. We have $7.9 million of state NOLs that begin to expire in 2031, but principally expire between 2031 and 2038.

 

 

The realization of our deferred tax assets is entirely dependent upon our ability to generate future taxable income in applicable jurisdictions. GAAP requires that we periodically assess the need to establish a reserve against our deferred tax assets to the extent we no longer believe it is more likely than not that they will be fully realized. As of September 30, 2023, we recorded a valuation allowance of $3,000 pertaining to various state NOLs that were not expected to be utilized. The valuation allowance is subject to periodic review and adjustment based on changes in facts and circumstances and would be reduced should we utilize the state NOLs and tax credits against which an allowance had previously been provided or determine that such utilization was more likely than not. The $29,000 decrease in the valuation allowance during 2023 is primarily due to the expected utilization of state NOLs for which an allowance had been recorded.

 

As of September 30, 2023, we had no material, known tax exposures that required the establishment of contingency reserves for uncertain tax positions.

 

We classify interest and penalties related to unrecognized tax benefits as part of income tax expense. There were no interest and penalties related to unrecognized tax benefits incurred during 2023, 2022 and 2021.

 

We file U.S. federal income tax returns as well as state and local income tax returns in various jurisdictions. Federal and various state tax returns filed subsequent to 2018 remain subject to examination.