Note 10 - Income Taxes

12 Months Ended

Sep. 27, 2025

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(10) Income Taxes

The components of the provision for income taxes are as follows:

	Year Ended
	September 27,			September 28,			September 30,
(Dollars in thousands)	2025			2024			2023
Provision for income taxes:
Current:
Federal	$	12,257		$	1,425		$	8,320
State		1,276			362			782
		13,533			1,787			9,102
Deferred:
Federal		(782	)		3,843			335
State		34			352			(97	)
		(748	)		4,195			238
Income taxes	$	12,785		$	5,982		$	9,340
Effective income tax rate		23.8	%		23.7	%		22.4	%

The reconciliation between income taxes computed at the federal statutory rate and the provision for income taxes is as follows:

	Year Ended
(Dollars in thousands)	September 27, 2025					September 28, 2024					September 30, 2023
Provision for income taxes at federal statutory rate	$	11,299		21.0	%	$	5,310		21.0	%	$	8,768		21.0	%
State income taxes, net of federal tax benefit		1,080		2.0			518		2.0			548		1.3
Stock-based compensation		29		0.1			68		0.3			(55	)	(0.1	)
Valuation allowance		(38	)	(0.1	)		146		0.6			(29	)	(0.1	)
Nondeductible expenses and other, net		415		0.8			(60	)	(0.2	)		108		0.3
Provision for income taxes	$	12,785		23.8	%	$	5,982		23.7	%	$	9,340		22.4	%

The components of deferred tax assets and liabilities are as follows:

	September 27,			September 28,
(In thousands)	2025			2024
Deferred tax assets:
Defined benefit plans	$	2,682		$	2,765
Accrued expenses and asset reserves		2,342			1,406
Stock-based compensation		1,650			1,423
R & E Capitalization		335			226
Operating lease liabilities		873			378
State net operating loss carryforwards and tax credits		3			3
Valuation allowance		(112	)		(149	)
Deferred tax assets		7,773			6,052
Deferred tax liabilities:
Plant and equipment		(15,374	)		(15,090	)
Prepaid insurance		(1,112	)		(1,240	)
Right-of-use assets		(881	)		(381	)
Goodwill		(1,474	)		(976	)
Deferred tax liabilities		(18,841	)		(17,687	)
Net deferred tax liability	$	(11,068	)	$	(11,635	)

As of September 27, 2025 and September 28, 2024, we recorded net deferred tax liabilities (net of valuation allowances) of $11.1 million and $11.6 million, respectively, in other liabilities on our consolidated balance sheet. We have $3.1 million of state NOLs that effectively expire in 2031 due to state tax rate reductions.

The realization of our deferred tax assets is entirely dependent upon our ability to generate future taxable income in applicable jurisdictions. GAAP requires that we periodically assess the need to establish a reserve against our deferred tax assets to the extent we no longer believe it is more likely than not that they will be fully realized. As of September 27, 2025, we recorded a valuation allowance of $112,000 pertaining to various deferred tax assets that were not expected to be utilized. The valuation allowance is subject to periodic review and adjustment based on changes in facts and circumstances. The $37,000 reduction in the valuation allowance is due to the reduction of a state deferred tax asset that had not been expected to be utilized.

As of September 27, 2025, we had no material, known tax exposures that required the establishment of contingency reserves for uncertain tax positions.

We classify interest and penalties related to unrecognized tax benefits as part of income tax expense. There were no interest and penalties related to unrecognized tax benefits incurred during 2025, 2024 and 2023.

We file U.S. federal income tax returns as well as state and local income tax returns in various jurisdictions. Federal and various state tax returns filed subsequent to 2020 remain subject to examination.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, extending key provisions of the 2017 Tax Cuts and Jobs Act including, but not limited to, federal bonus depreciation and deductions for domestic research and development expenditures. The impact of OBBBA did not have a material impact on the Company’s consolidated financial statements.