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Note 10 - Income Taxes | 12 Months Ended
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Sep. 28, 2024
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 28, |  |  | September 30, |  |  | October 1, |
(Dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,425 |  |  | $ | 8,320 |  |  | $ | 33,377 |
State |  |  | 362 |  |  |  | 782 |  |  |  | 3,012 |
|  |  | 1,787 |  |  |  | 9,102 |  |  |  | 36,389 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 3,843 |  |  |  | 335 |  |  |  | 627 |
State |  |  | 352 |  |  |  | (97 | ) |  |  | (300 | )
|  |  | 4,195 |  |  |  | 238 |  |  |  | 327 |
Income taxes |  | $ | 5,982 |  |  | $ | 9,340 |  |  | $ | 36,716 |
Effective income tax rate |  |  | 23.7 | % |  |  | 22.4 | % |  |  | 22.7 | %
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 28, 2024 |  |  | September 30, 2023 |  |  | October 1, 2022 |
Provision for income taxes at federal statutory rate |  | $ | 5,310 |  |  |  | 21.0 | % |  | $ | 8,768 |  |  |  | 21.0 | % |  | $ | 33,963 |  |  |  | 21.0 | %
State income taxes, net of federal tax benefit |  |  | 518 |  |  |  | 2.0 |  |  |  | 548 |  |  |  | 1.3 |  |  |  | 2,108 |  |  |  | 1.3 |
Stock-based compensation |  |  | 68 |  |  |  | 0.3 |  |  |  | (55 | ) |  |  | (0.1 | ) |  |  | (255 | ) |  |  | (0.2 | )
Valuation allowance |  |  | 146 |  |  |  | 0.6 |  |  |  | (29 | ) |  |  | (0.1 | ) |  |  | (41 | ) |  |  | (0.0 | )
Nondeductible expenses and other, net |  |  | (60 | ) |  |  | (0.2 | ) |  |  | 108 |  |  |  | 0.3 |  |  |  | 941 |  |  |  | 0.6 |
Provision for income taxes |  | $ | 5,982 |  |  |  | 23.7 | % |  | $ | 9,340 |  |  |  | 22.4 | % |  | $ | 36,716 |  |  |  | 22.7 | %
The components of deferred tax assets and liabilities are as follows:
|  | September 28, |  |  | September 30, |
(In thousands) |  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |  |  |
Defined benefit plans |  | $ | 2,765 |  |  | $ | 2,551 |
Accrued expenses and asset reserves |  |  | 1,406 |  |  |  | 2,392 |
Stock-based compensation |  |  | 1,423 |  |  |  | 1,288 |
R & E Capitalization |  |  | 226 |  |  |  | 125 |
Operating lease liabilities |  |  | 378 |  |  |  | 434 |
State net operating loss carryforwards and tax credits |  |  | 3 |  |  |  | 158 |
Valuation allowance |  |  | (149 | ) |  |  | (3 | )
Deferred tax assets |  |  | 6,052 |  |  |  | 6,945 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Plant and equipment |  |  | (15,090 | ) |  |  | (12,143 | )
Prepaid insurance |  |  | (1,240 | ) |  |  | (1,123 | )
Right-of-use assets |  |  | (381 | ) |  |  | (435 | )
Goodwill |  |  | (976 | ) |  |  | (787 | )
Deferred tax liabilities |  |  | (17,687 | ) |  |  | (14,488 | )
Net deferred tax liability |  | $ | (11,635 | ) |  | $ | (7,543 | )
As of September 28, 2024 and September 30, 2023, we recorded net deferred tax liabilities (net of valuation allowances) of $11.6 million and $7.5 million, respectively, in other liabilities on our consolidated balance sheet. We have $316,000 of state NOLs that begin to expire in 2031, but principally expire between 2031 and 2039. 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 28, 2024, we recorded a valuation allowance of $149,000 pertaining to various deferred tax assets that were not expected to be utilized. The valuation allowance is subject to periodic review and adjustment based on changes in facts and circumstances. The $146,000 increase in the valuation allowance during 2024 is primarily due to a state deferred tax asset that is not expected to be utilized. As of September 28, 2024, 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 2024, 2023 and 2022. 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 2019 remain subject to examination.

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