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Income Taxes
 12 Months Ended
Jan. 01, 2012
Income Taxes [Abstract]  
Income Taxes
(9) Income Taxes

Total income tax expense (benefit) consists of the following:

 

                         
       

      Current      

      

      Deferred      

      

         Total         

        (In thousands)
             

Fiscal 2011:

                        

  Federal

   $   3,250       $   821        $   4,071    

  State

       1,486           (624)           862    
       

 

      

 

      

 
    $   4,736       $   197        $   4,933    
       

 

      

 

      

 
             

Fiscal 2010:

                        

  Federal

   $   11,747       $   (2,216)       $   9,531    

  State

       2,600           (577)           2,023    
       

 

      

 

      

 
    $   14,347       $   (2,793)       $   11,554    
       

 

      

 

      

 

Fiscal 2009:

                        

  Federal

   $   9,376       $   2,336        $   11,712    

  State

       1,384           310            1,694    
       

 

      

 

      

 
    $   10,760       $   2,646        $   13,406    
       

 

      

 

      

 

The provision for income taxes differs from the amounts computed by applying the federal statutory tax rate of 35% to earnings before income taxes, as follows:

 

                         
       

Year Ended
       

    January 1,    

2012

      

    January 2,    

2011

      

    January 3,    

2010
        (In thousands)
             

Tax expense at statutory rate

   $   5,812     $   11,240     $   12,326  

State taxes, net of federal benefit

       765         1,485         1,651  

Tax credits and other

       (1,644)        (1,171)        (571) 
       

 

      

 

      

 
    $   4,933     $   11,554     $   13,406  
       

 

      

 

      

 

Deferred tax assets and liabilities consist of the following tax-effected temporary differences:

 

                 
       

    January 1,    

2012

      

    January 2,    

2011
        (In thousands)
         

Deferred tax assets:

                

Deferred rent

   $   10,297     $   11,000  

Share-based compensation

       3,787         3,580  

Inventory

       1,081         1,151  

Solar rebate

       297         —  

Accrued legal fees

       48         951  

Other

       10,509         10,028  
       

 

      

 

Deferred tax assets

       26,019         26,710  

Deferred tax liabilities – basis difference in fixed assets

       (4,373)        (4,867) 
       

 

      

 

Net deferred tax assets

   $   21,646     $   21,843  
       

 

      

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections of future taxable income over the periods during which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced if estimates of future taxable income are reduced.

The Company files a consolidated federal income tax return and files tax returns in various state and local jurisdictions. The statutes of limitations for its consolidated federal income tax returns are open for fiscal years 2008 and after, and state and local income tax returns are open for fiscal years 2007 and after.

At January 1, 2012 and January 2, 2011, the Company had no unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate over the next 12 months. The Company’s policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expense. At January 1, 2012 and January 2, 2011, the Company had no accrued interest or penalties.