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Income Taxes
 12 Months Ended
Dec. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income (loss) from consolidated operations before income taxes are comprised of the following (in millions):
December 28, 2025December 29, 2024December 31, 2023
Domestic$17.1 $3.8 $(9.6)
Foreign16.9 22.7 20.7 
Total$34.0 $26.5 $11.1 

The provision for income taxes from consolidated operations are comprised of the following (in millions):
Year Ended
December 28, 2025December 29, 2024December 31, 2023
Federal income taxes:
Current
$— $— $— 
Deferred
8.3 7.1 2.4 
Total Federal
8.3 7.1 2.4 
State and local income taxes:
Current
(1.9)1.8 1.1 
Deferred
0.3 (2.7)0.3 
Total State and local
(1.6)(0.9)1.4 
Foreign income taxes:
Current
5.8 4.2 5.1 
Deferred
(0.5)(0.2)(0.2)
Total Foreign
5.3 4.0 4.9 
Total$12.0 $10.2 $8.7 
The reconciliation from the statutory federal income tax rate of 21% to the Company’s effective income tax rate, applying ASU 2023-09 prospectively for the years ended December 28, 2025, is as follows (in millions):

Amount
Rate
December 28, 2025December 28, 2025
Income tax (benefit) at federal statutory rate$7.1 21.0 %
State taxes (benefit), net of federal tax benefit
1.1 3.2 
Foreign tax effects:
Israel tax expense (benefit)(0.6)(1.9)
Other foreign jurisdictions tax expense (benefit)1.2 3.4 
Effects of cross-border tax laws:
Global intangible low-taxed income3.2 9.5 
Tax credits:
Research & development tax credits(0.5)(1.6)
Change in federal valuation allowance(0.2)(0.7)
Nondeductible items:
Stock-based compensation0.3 0.9 
Officer’s compensation 162(m) limitation0.8 2.5 
Other nondeductible items0.7 2.0 
Changes in unrecognized tax benefits(1.0)(2.9)
Other adjustments(0.1)(0.2)
Total$12.0 35.2 %


The reconciliation from the statutory federal income tax rate to our effective income tax rate, applying ASC 740 prior to the adoption of ASU 2023-09 is as follows (in millions):
Year Ended
December 29, 2024December 31, 2023
Income tax (benefit) at federal statutory rate$5.6 $2.3 
State taxes (benefit), net of federal tax benefit and valuation allowance1.9 3.7 
Difference in tax rates between U.S. and foreign2.6 1.7 
Increase (decrease) in valuation allowance
(4.2)(2.0)
Nondeductible expense0.5 0.5 
Increase (decrease) in reserve for uncertain tax positions
0.3 0.3 
Other0.9 0.1 
Officer’s compensation 162(m) limitation0.8 0.5 
R&D tax credit(0.9)(0.9)
Stock-based compensation2.7 2.5 
Total$10.2 $8.7 
For the fiscal year ending December 28, 2025, California comprises the majority (i.e., greater than 50%) of the Company’s domestic state and local income taxes, net of the federal effect category.

The amount of income taxes paid, net of refunds received, by jurisdiction are as follows (in millions) :
Federal:
None
State:
$1.3 
Foreign
$5.2 

Furthermore, the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of the total income taxes paid (net of refunds received) are as follows (in millions):

Israel:
$2.6 
France:
$0.8 
Canada:
$0.8 
Japan:
$0.6 

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows (in millions):
December 28, 2025December 29, 2024
Deferred tax assets:
Stock-based compensation$7.2 $7.3 
Payroll related accruals11.3 9.4 
Lease accruals32.8 28.7 
Net operating loss carryforwards30.0 33.3 
Tax credit carryforwards16.5 12.7 
Deferred expenses19.8 15.7 
Other16.1 17.0 
Total deferred taxes
133.7 124.1 
Valuation allowance(7.4)(7.6)
Total deferred tax assets, net of valuation allowance126.3 116.5 
Deferred tax liabilities:
Unearned revenue(2.9)(3.2)
Operating lease right-of-use assets(29.2)(25.5)
Other intangibles(26.2)(19.4)
Property and equipment, principally due to differences in depreciation(13.3)(6.6)
Other(1.9)(2.3)
Total deferred tax liabilities(73.5)(57.0)
Net deferred tax asset $52.8 $59.5 

During the fourth quarter of 2025, the Company evaluated all available evidence, both positive and negative, to determine whether based on the weight of that evidence, a valuation allowance for deferred tax assets was needed. Evidence evaluated by the Company included but was not limited to, its three-year cumulative results, and its forecast of taxable income. As a result, the Company determined that the majority of the Company’s U.S. net deferred tax assets were more likely than not to be realized and that a valuation allowance with respect to a majority of the Company’s net deferred tax assets was not required. The valuation allowance on the Company’s deferred tax assets as of December 28, 2025 relates primarily to state net operating loss carryforwards, capital loss carryforwards and research and development tax credit carryforwards the Company estimates it may not be able to utilize in future periods. During fiscal 2025, the Company recorded a net decrease in its valuation allowance of $0.2 million.
At December 28, 2025, the Company had federal tax loss carryforwards of $116.4 million and various state tax loss carryforwards of $204.4 million. The federal tax loss carryforwards will begin to expire in 2034 and state tax loss carryforwards begin to expire in 2026 in certain states.
At December 28, 2025, the Company had federal tax credit carryforwards of $15.2 million and various state tax credit carryforwards of $1.3 million. The federal tax credit carryforwards will begin to expire in 2026 and the state tax credit carryforwards do not have an expiration.
Federal and state income tax laws impose restrictions on the utilization of net operating losses (“NOLs”) and tax credit carryforwards in the event that an “ownership change” occurs for tax purposes, as defined by Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”).
In tax year 2010 the Company experienced a Section 382 “ownership change” that will limit the utilization of NOL carryforwards generated before the “ownership change” date. Additionally, the Company has acquired corporations with NOL carryforwards at the date of acquisition (“Acquired NOLs”). The Acquired NOLs are subject to separate limitations that may further restrict the use of Acquired NOLs. For the year ended December 28, 2025, there was no impact of such Section 382 limitations on the income tax provision since the amount of taxable income did not exceed NOLs available for utilization. However, future equity offerings or acquisitions that have equity as a component of the purchase price could also cause an “ownership change.” If and when any other “ownership change” occurs, utilization of the NOLs or other tax attributes may be further limited.
As of December 31, 2017, all accumulated undistributed earnings of our foreign subsidiaries were subject to the one-time transition tax on foreign earnings required by the 2017 Tax Cuts and Jobs Act. It is the Company’s intention to permanently reinvest undistributed earnings of its foreign subsidiaries. As such, the Company has not provided deferred U.S. income taxes or foreign withholding taxes of approximately $7.8 million on temporary differences relating to the outside basis in its investment in foreign subsidiaries. As of December 28, 2025, the Company has $30.3 million of cash and cash equivalents available for distribution.

The Company is subject to taxation in the U.S., various state tax jurisdictions and various foreign tax jurisdictions. The Company’s tax years for 2005 and later are subject to examination by the U.S. and state tax authorities due to the existence of NOL carryforwards. Generally, the Company’s tax years for 2020 and later are subject to examination by various foreign tax authorities as well.

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions):

Balance as of December 25, 2022$25.0 
Increases related to prior periods
0.2 
Increases related to current year tax positions0.2 
Expiration of applicable statutes of limitations(0.1)
Balance as of December 31, 202325.3 
Increases related to prior periods
0.1 
Increases related to current year tax positions0.2 
Expiration of applicable statutes of limitations(0.2)
Balance as of December 29, 202425.4 
Increases related to prior periods
1.8 
Decreases related to prior periods
(1.2)
Increases related to current year tax positions0.2 
Expiration of applicable statutes of limitations(0.2)
Balance as of December 28, 2025$26.0 

Included in the balance of unrecognized tax benefits at December 28, 2025, are $22.9 million of tax benefits that, if recognized, would impact the effective tax rate. Included in this amount is $11.3 million that would become a deferred tax asset if the tax benefit were recognized. As such, this benefit may be impacted by a corresponding change in valuation allowance depending upon the Company’s assessment of the realizability of the deferred tax asset at the time the benefits are recognized.
 
The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. For the years ended December 28, 2025, December 29, 2024 and December 31, 2023, the Company recorded $0.2 million, $0.3 million, and $0.3 million in interest and penalties expense each year, respectively. These amounts are netted by a benefit for interest and penalties related to the reversal of prior positions of $2.5 million, $0.1 million, and $0.1 million for the years ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively. As of December 28, 2025, December 29, 2024, and December 31, 2023, the Company had accrued total interest and penalties of $3.3 million, $5.6 million and $5.3 million, respectively.

The Organization for Economic Co-operation and Development (OECD) has issued Pillar Two model rules, introducing a new global minimum tax of 15%. While the United States has not adopted Pillar Two, other countries have enacted such legislation or are considering implementation. Given our limited operations in low-tax jurisdictions, Pillar Two has not materially increased our global tax costs. On January 5, 2026, the OECD released a comprehensive package for a “side-by-side arrangement” with respect to Pillar Two. Notably, once adopted, this new guidance will prevent other countries from imposing tax on the U.S. profits of American companies. We will continue to monitor U.S. and international legislative developments, including further announcements on the Side-by-Side package, to assess any potential impacts on our operations.

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (OBBBA). The OBBBA maintains the 21 percent corporate tax rate and makes permanent many of the beneficial expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable interest deductibility and 100 percent bonus depreciation with effective dates in 2025. Revisions to the international tax framework are effective in 2026. In the third quarter of 2025, we recorded impacts of the OBBBA, which were not material. In the fourth quarter of 2025, we elected to take 100 percent bonus depreciation on the Company’s eligible fixed assets placed in service during the year ended December 28, 2025.