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Income Taxes | 12 Months Ended
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May 25, 2019
Income Taxes [Abstract] |
Income Taxes | 7. Income Taxes ﻿ The following table represents the current and deferred income tax provision for federal, state and foreign income taxes attributable to operations (in thousands): ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | For the Years Ended
﻿ |  | May 25, |  | May 26, |  | May 27,
﻿ |  | 2019 |  | 2018 |  | 2017
﻿Current |  |  |  |  |  |  |  |  |
﻿Federal |  | $ | 5,068 |  | $ | 10,785 |  | $ | 10,901
﻿State |  |  | 2,278 |  |  | 2,829 |  |  | 2,551
﻿Foreign |  |  | 2,690 |  |  | (392) |  |  | 1,472
﻿ |  |  | 10,036 |  |  | 13,222 |  |  | 14,924
﻿Deferred |  |  |  |  |  |  |  |  |
﻿Federal |  |  | 5,890 |  |  | (3,011) |  |  | 259
﻿State |  |  | 619 |  |  | 367 |  |  | 62
﻿Foreign |  |  | (46) |  |  | (515) |  |  | (123)
﻿ |  |  | 6,463 |  |  | (3,159) |  |  | 198
﻿ |  | $ | 16,499 |  | $ | 10,063 |  | $ | 15,122
﻿ Income before provision for income taxes is as follows (in thousands): ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | For the Years Ended
﻿ |  | May 25, |  | May 26, |  | May 27,
﻿ |  | 2019 |  | 2018 |  | 2017
﻿Domestic |  | $ | 41,828 |  | $ | 26,774 |  | $ | 32,390
﻿Foreign |  |  | 6,141 |  |  | 2,115 |  |  | 1,383
﻿ |  | $ | 47,969 |  | $ | 28,889 |  | $ | 33,773
﻿ The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows: ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | For the Years Ended
﻿ |  | May 25, |  | May 26, |  | May 27,
﻿ |  | 2019 |  | 2018 |  | 2017
﻿Statutory tax rate |  | 21.0 | % |  | 29.4 | % |  | 35.0 | %
﻿State taxes, net of federal benefit |  | 4.9 |  |  | 7.9 |  |  | 5.0 |
﻿Non-U.S. rate adjustments |  | 1.3 |  |  | (0.8) |  |  | 0.1 |
﻿Stock-based compensation |  | 2.8 |  |  | 4.5 |  |  | 0.7 |
﻿Long-term net capital gains |  | (6.1) |  |  | 10.1 |  |  | - |
﻿Foreign tax credit |  | 9.3 |  |  | (16.5) |  |  | (0.1) |
﻿Valuation allowance |  | (2.8) |  |  | (4.3) |  |  | 1.2 |
﻿Global Intangible Low-Taxed Income ("GILTI") |  | 1.1 |  |  | - |  |  | - |
﻿Permanent items, primarily meals and entertainment |  | 1.4 |  |  | 3.2 |  |  | 2.2 |
﻿Deferred tax impact of U.S. federal rate changes |  | 0.1 |  |  | (2.8) |  |  | - |
﻿Deferred tax impact of foreign rate changes |  | 1.2 |  |  | 3.9 |  |  | 0.5 |
﻿Other, net |  | 0.2 |  |  | 0.2 |  |  | 0.2 |
﻿Effective tax rate |  | 34.4 | % |  | 34.8 | % |  | 44.8 | %
﻿ The impact of state taxes, net of federal benefit, and foreign income taxed at other than U.S. rates fluctuates year over year due to the changes in the mix of operating income and losses amongst the various states and foreign jurisdictions in which the Company operates. ﻿ The components of the net deferred tax asset (liability) consist of the following (in thousands):
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ |  | As of |  | As of
﻿ |  | May 25, |  | May 26,
﻿ |  | 2019 |  | 2018
﻿Deferred tax assets: |  |  |  |  |  |
﻿Allowance for doubtful accounts |  | $ | 1,108 |  | $ | 854
﻿Accrued compensation |  |  | 3,347 |  |  | 3,210
﻿Accrued expenses |  |  | 2,418 |  |  | 2,311
﻿Stock options and restricted stock |  |  | 5,541 |  |  | 7,326
﻿Foreign tax credit |  |  | 498 |  |  | 5,596
﻿Net operating losses |  |  | 14,489 |  |  | 15,563
﻿Property and equipment |  |  | - |  |  | 1,017
﻿State taxes |  |  | 208 |  |  | 138
﻿Gross deferred tax asset |  |  | 27,609 |  |  | 36,015
﻿Valuation allowance |  |  | (13,190) |  |  | (15,298)
﻿Gross deferred tax asset, net of valuation allowance |  |  | 14,419 |  |  | 20,717
﻿Deferred tax liabilities: |  |  |  |  |  |
﻿Property and equipment |  |  | (77) |  |  | -
﻿Goodwill and intangibles |  |  | (17,991) |  |  | (17,867)
﻿Net deferred tax asset (liability) |  | $ | (3,649) |  | $ | 2,850
﻿ The Company had a net income tax receivable of $1.0 million and income tax payable of $3.3 million as of May 25, 2019 and May 26, 2018, respectively. ﻿ The tax benefit associated with the exercise of nonqualified stock options and the disqualifying dispositions by employees of incentive stock options, restricted stock awards and shares issued under the Company’s ESPP reduced income taxes payable by $1.8 million and $1.1 million for the years ended May 25, 2019 and May 26, 2018, respectively. ﻿ The Company has foreign net operating loss carryforwards of $6 3.5 million and foreign tax credit carryforwards of $0.5 million. The foreign tax credits will expire beginning in fiscal 2023. The following table summarizes the net operating loss expiration periods. ﻿
﻿ |  |
﻿Expiration Periods | Amount of Net Operating Losses
﻿Fiscal Years Ending: | (in thousands)
﻿2020 | $ | 1,600
﻿2021 |  | 4,200
﻿2022 |  | 300
﻿2023 |  | 300
﻿2024 |  | 2,300
﻿2025-2029 |  | 1,200
﻿Unlimited |  | 53,600
﻿ | $ | 63,500
﻿ The following table summarizes the activity in our valuation allowance accounts (in thousands): ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  | Currency |  |  |
﻿ |  | Beginning |  | Charged to |  | Rate |  | Ending
﻿ |  | Balance |  | Operations |  | Changes |  | Balance
﻿Years Ended: |  |  |  |  |  |  |  |  |  |  |  |
﻿May 27, 2017 |  | $ | 15,714 |  | $ | 438 |  | $ | (181) |  | $ | 15,971
﻿May 26, 2018 |  | $ | 15,971 |  | $ | (1,181) |  | $ | 508 |  | $ | 15,298
﻿May 25, 2019 |  | $ | 15,298 |  | $ | (1,440) |  | $ | (668) |  | $ | 13,190
﻿ Realization of the deferred tax assets is dependent upon generating sufficient future taxable income. Management believes that it is more likely than not that all other remaining deferred tax assets will be realized through future taxable earnings or alternative tax strategies. ﻿ ﻿ Deferred income taxes have not been provided on the undistributed earnings of approximately $17.6 million from the Company’s foreign subsidiaries as of May 25, 2019 since these amounts are intended to be indefinitely reinvested in foreign operations. If the earnings of the Company’s foreign subsidiaries were to be distributed, management estimates that the income tax impact would be immaterial as a result of the transition tax and federal dividends received deduction for foreign source earnings provided under the US Tax Cuts and Jobs Act of 2017. ﻿ The following table summarizes the activity related to the gross unrecognized tax benefits (in thousands): ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ |  | For the Years Ended
﻿ |  | May 25, |  | May 26,
﻿ |  | 2019 |  | 2018
﻿Unrecognized tax benefits, beginning of year |  | $ | 42 |  | $ | 42
﻿Gross increases-tax positions in prior period |  |  | - |  |  | -
﻿Gross decreases-tax positions in prior period |  |  | - |  |  | -
﻿Gross increases-current period tax positions |  |  | - |  |  | 42
﻿Settlements |  |  | - |  |  | -
﻿Lapse of statute of limitations |  |  | - |  |  | (42)
﻿Unrecognized tax benefits, end of year |  | $ | 42 |  | $ | 42
﻿ T he Company’s total liability for unrecognized gross tax benefits was $42,000 as of both May 25, 2019 and May 26, 2018, which, if ultimately recognized, would impact the effective tax rate in future periods. The unrecognized tax benefits include long-term liabilities of $42,000 as of both May 25, 2019 and May 26, 2018; none of the unrecognized tax benefits are short-term liabilities due to the closing of the statute of limitations. ﻿ The Company’s major income tax jurisdiction is the U.S., with federal statute of limitations remaining open for fiscal 201 6 and thereafter. For states within the U.S. in which the Company does significant business, the Company remains subject to examination for fiscal 201 5 and thereafter. Major foreign jurisdictions in Europe remain open for fiscal years ended 201 4 and thereafter. ﻿ The Company continues to recognize interest expense and penalties related to income tax as a part of its provision for income taxes. During the current fiscal year, the Company did not accrue for any interest and penalties as a component of the liability for unrecognized tax benefits.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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