Income Taxes

12 Months Ended

Dec. 28, 2024

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision (benefit) for income taxes on income (loss) from continuing operations consists of the following:

	2024		2023
Current
Federal	$	(51)	$	208
State	22		6
Total current	(29)		214
Deferred
Federal	—		—
State	—		—
Total deferred	—		—
Income tax provision (benefit)	$	(29)	$	214

Differences between the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to income (loss) from continuing operations before taxes are summarized as follows:

	2024			2023
Federal statutory rate	21		%	21		%
Statutory rate applied to loss from continuing operations before taxes	$	(2,570)		$	(365)
Plus state income taxes, net of federal tax effect	17			5
Total statutory provision (benefit)	(2,553)			(360)
Effect of differences:
Nondeductible meals and entertainment	38			31
Executive compensation limitation	24			—
Federal tax credits	(220)			(343)
State tax credits	(22)			(74)
Reserve for uncertain tax positions	5			37
Change in valuation allowance	2,573			797
Stock-based compensation	125			105
Other items	1			21
Income tax provision (benefit)	$	(29)		$	214

The Company has a full valuation allowance against its deferred tax assets. The Company intends to maintain this position until there is sufficient evidence to support the reversal of all or some portion of these allowances. The Company also has certain assets with indefinite lives for which the basis is different for book and tax. In accordance with ASC 740-10-30-18, the deferred tax liability related to these intangible assets cannot be used to offset deferred tax assets when determining the amount of the valuation allowance for deferred tax assets which are not more-likely-than-not to be realized. The result is that the Company is in a net deferred tax liability position of $91 at December 28, 2024 and December 30, 2023, which is recorded in other long-term liabilities in the Company's Consolidated Balance Sheets.

Due to its full valuation allowance against its deferred tax balances, the Company is only able to recognize refundable credits and a small amount of federal and state taxes in the tax provision (benefit) for 2024 and 2023.

Significant components of the Company's deferred tax assets and liabilities are as follows:

	2024		2023
Deferred tax assets:
Inventories	$	1,916	$	1,649
Retirement benefits	436		322
State net operating losses	3,502		4,014
Federal net operating losses	6,309		2,840
State tax credit carryforwards	—		1,669
Federal tax credit carryforwards	4,778		4,579
Allowances for bad debts, claims and discounts	1,806		1,663
Other	8,597		7,246
Total deferred tax assets	27,344		23,982
Valuation allowance	(24,737)		(20,961)
Net deferred tax assets	2,607		3,021
Deferred tax liabilities:
Property, plant and equipment	2,698		3,112
Total deferred tax liabilities	2,698		3,112
Net deferred tax liability	$	(91)	$	(91)

At December 28, 2024, the Company had approximately $30,045 of federal net operating loss carryforwards and approximately $63,275 of state net operating loss carryforwards available from both continuing and discontinued operations. In addition, $4,778 of federal tax credit carryforwards were available to the Company. The federal tax credit carryforwards will expire between 2030 and 2045. The federal net operating loss carryforwards have no expiration date. The state net operating loss carryforwards will expire between 2024 and 2044. A valuation allowance is recorded to reflect the estimated amount of deferred tax assets attributable to continuing operations that are estimated not to be realizable based on the available evidence. At December 28, 2024, the Company is in a net deferred tax liability position of $91 which is included in other long-term liabilities in the Company's Consolidated Balance Sheets.

Beginning in 2022, the Tax Cuts and Jobs Act (the "TCJA") amended Section 174 to eliminate current year deductibility of research and experimentation ("R&E") expenditures and software development costs (collectively, "R&E expenditures") and instead requires taxpayers to charge their R&E expenditures to a capital account amortized over 5 years. For the 2024 and 2023 tax years, the Company capitalized $4,282 and $4,642 of research and development expenses respectively.

Tax Uncertainties

The Company accounts for uncertainty in income tax positions according to FASB guidance relating to uncertain tax positions. Unrecognized tax benefits, if recognized, would affect the Company's effective tax rate. There were no significant interest or penalties accrued as of December 28, 2024 or December 30, 2023.

The following is a summary of the change in the Company's unrecognized tax benefits:

	2024		2023
Balance at beginning of year	$	555	$	518
Additions based on tax positions taken during a current period	5		37
Balance at end of year	$	560	$	555

The Company and its subsidiaries are subject to United States federal income taxes, as well as income taxes in a number of state jurisdictions. The tax years subsequent to 2020 remain open to examination for U.S. federal income taxes. The majority of state jurisdictions remain open for tax years subsequent to 2020. A few state jurisdictions remain open to examination for tax years subsequent to 2019.