Note 13 - Income Taxes

12 Months Ended

Nov. 25, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

13. Income Taxes

The components of the income tax provision from continuing operations are as follows:

	2023			2022		2021
Current:
Federal	$	(121	)	$	5,659	$	4,507
State		(72	)		2,154		171
Deferred:
Federal		846			484		60
State		30			405		1,098
Total	$	683		$	8,702	$	5,836

A reconciliation of the statutory federal income tax rate and the effective income tax rate, as a percentage of income before income taxes, is as follows:

	2023			2022			2021
Statutory federal income tax rate		21.0	%		21.0	%		21.0	%
State income tax, net of federal benefit		3.8			4.4			4.2
Nondeductible goodwill		(45.7	)		-			0.4
Nontaxable gain on revaluation of contingent consideration		8.6			-			-
Other		3.0			(0.3	)		(0.1	)
Change in valuation allowance		(18.2	)		0.4			-
Effective income tax rate		(27.5	)%		25.5	%		25.5	%

Excess tax benefits (expense) in the amount of $10, $1 and $(133) were recognized as a component of income tax expense during fiscal 2023, 2022 and 2021, respectively, resulting from the exercise of stock options and the release of restricted shares. The fiscal 2023 adjustment for impairment of non-deductible goodwill reflect the fact that there was no tax basis related to the impaired goodwill.

The income tax effects of temporary differences and carryforwards, which give rise to significant portions of the deferred income tax assets and deferred income tax liabilities, are as follows:

	November 25, 2023			November 26, 2022
Deferred income tax assets:
Trade accounts receivable	$	135		$	315
Inventories		3,847			3,782
Post employment benefit obligations		2,426			2,734
Foreign net operating loss carryforwards		1,791			1,339
Operating lease liabilities		29,185			29,423
Other		1,668			1,722
Gross deferred income tax assets		39,052			39,315
Valuation allowance		(1,791	)		(1,339	)
Total deferred income tax assets		37,261			37,976
Deferred income tax liabilities:
Property and equipment		5,894			5,532
Intangible assets		984			726
Operating lease assets		25,239			25,166
Prepaid expenses and other		499			1,024
Total deferred income tax liabilities		32,616			32,448
Net deferred income tax assets	$	4,645		$	5,528

We have foreign net operating loss carryforwards attributable to Noa Home (see Note 3) of $7,511 resulting in a deferred tax asset of $1,791 upon which we have placed a full valuation allowance.

Income tax refunds received, net of taxes paid, during fiscal 2023 was $263. Income taxes paid, net of refunds received, during fiscal 2022 and 2021 were $20,176, and $3,092, respectively.

We regularly evaluate, assess and adjust our accrued liabilities for unrecognized tax benefits in light of changing facts and circumstances, which could cause the effective tax rate to fluctuate from period to period. Our liabilities for uncertain tax positions are not material.

Significant judgment is required in evaluating the Company's federal and state tax positions and in the determination of its tax provision. Despite our belief that the liability for unrecognized tax benefits is adequate, it is often difficult to predict the final outcome or the timing of the resolution of any particular tax matter. We may adjust these liabilities as relevant circumstances evolve, such as guidance from the relevant tax authority, or resolution of issues in the courts. These adjustments are recognized as a component of income tax expense in the period in which they are identified. The Company also cannot predict when or if any other future tax payments related to these tax positions may occur.

We remain subject to examination for tax years 2020 through 2023 for all of our major tax jurisdictions.