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Note 10 - Income Taxes
 12 Months Ended
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.