INCOME TAXES (Tables)

12 Months Ended

Dec. 28, 2025

The provision for income taxes is comprised of the following:



(in thousands)	2025		2024		2023
Current taxes:
Federal	$	(87)	$	150	$	329
State	550		1,241		582
Foreign	2,515		1,771		2,817
Total current taxes	2,978		3,162		3,728
Deferred taxes:
Federal	35		28,484		(8,109)
State	(172)		5,295		(1,383)
Foreign	(512)		283		(708)
Total deferred taxes	(649)		34,062		(10,200)
Income tax expense (benefit):
Federal	(52)		28,634		(7,780)
State	378		6,536		(801)
Foreign	2,003		2,054		2,109
Total income tax expense (benefit)	$	2,329	$	37,224	$	(6,472)

Schedule of Effective Income Tax Rate Reconciliation

The items accounting for the difference between income taxes computed at the statutory federal income tax rate and income taxes reported on the Consolidated Statements of Operations and Comprehensive Income (Loss) are as follows:



(in thousands, except percentages)	2025		%		2024		%		2023		%
Income tax expense (benefit) based on U.S. federal statutory rate	$	(9,583)	21.0	%	$	(18,590)	21.0	%	$	(4,335)	21.0	%
Increase (decrease) resulting from:
State and local tax effects
State and local income taxes, net of federal income tax effect (1)	550		(1.2)		1,341		(1.5)		(1,258)		6.1

Foreign tax effects
Canada
Foreign withholdings	81		(0.2)		87		(0.1)		257		(1.2)
Other	155		(0.3)		(200)		0.2		(71)		0.4
India
Statutory tax rate difference between India and U.S.	356		(0.8)		384		(0.4)		579		(2.8)
India tax holiday	(324)		0.7		(406)		0.5		(423)		2.0
Other	123		(0.3)		1		—		4		—
Other foreign jurisdictions	463		(0.9)		254		(0.2)		249		(1.2)
Tax credits
Hiring tax credits	(2,700)		5.9		(5,376)		6.1		(6,325)		30.6
Foreign tax credits	(478)		1.0		—		—		—		—
Change in valuation allowance	12,704		(27.8)		57,626		(65.1)		(58)		0.3
Nontaxable or non-deductible items
Executive compensation	206		(0.5)		865		(1.0)		2,036		(9.9)
Goodwill and intangible asset impairment charge	—		—		—		—		2,287		(11.1)
Wages on hiring tax credits	567		(1.2)		1,129		(1.3)		1,328		(6.4)
Company-owned life insurance	(1,035)		2.3		(1,037)		1.2		(1,205)		5.8
Meals & entertainment	131		(0.3)		133		(0.2)		219		(1.1)
Stock-based compensation	1,038		(2.3)		899		(1.0)		724		(3.5)
Other	109		(0.3)		95		(0.1)		97		(0.5)
Change in unrecognized tax benefits	(136)		0.3		(99)		0.1		(206)		1.0
Other adjustments	102		(0.2)		118		(0.2)		(371)		1.8
Total income tax expense (benefit) and effective tax rate	$	2,329	(5.1)	%	$	37,224	(42.0)	%	$	(6,472)	31.3	%

(1)State taxes in the following states make up the majority (greater than 50%) of the tax expense (benefit) for the years presented:

a.2025 - Georgia, Maryland, Oregon, Tennessee and Texas

b.2024 - Georgia, Maryland, Oregon, Tennessee and Texas

c.2023 - California, Georgia, Indiana, Louisiana, Maryland, Mississippi, New York, Pennsylvania, South Carolina, Tennessee and Texas

Schedule of Components of Income Before Income Tax

U.S. and foreign components of loss before tax expense (benefit) was as follows:



(in thousands)	2025		2024		2023
U.S.	$	(51,101)	$	(97,733)	$	(27,773)
Foreign	5,470		9,209		7,128
Loss before tax expense (benefit)	$	(45,631)	$	(88,524)	$	(20,645)

Schedule of Deferred Tax Assets and Liabilities

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


(in thousands)	December 28, 2025		December 29, 2024
Deferred tax assets:
Allowance for credit losses	$	573	$	264

Accounts payable and other accrued expenses	3,731		8,630
Net operating loss carryforwards	29,490		17,971
Tax credit carryforwards	24,832		21,478
Accrued wages and benefits	6,117		5,702

Deferred compensation	11,719		11,411
Lease liabilities	14,207		15,242
Other	515		504
Total	91,184		81,202
Valuation allowance	(80,316)		(64,488)
Total deferred tax asset, net of valuation allowance	10,868		16,714
Deferred tax liabilities:
Prepaid expenses, deposits and other current assets	(820)		(526)
Lease right-of-use assets	(8,056)		(12,295)
Depreciation and amortization	(49)		(2,853)
Workers’ compensation	(934)		(503)

Total deferred tax liabilities	(9,859)		(16,177)
Deferred income taxes, net	$	1,009	$	537

Summary of Tax Credit Carryforwards

The following table summarizes our credit carryforwards and net operating losses (“NOLs”) along with their respective valuation allowance as of December 28, 2025:


(in thousands)	Carryover tax benefit		Valuation allowance		Expected benefit		Year expiration begins
Year-end tax attributes:
Federal WOTCs	$	24,355	$	(24,355)	$	—	2042
Federal NOLs	22,034		(22,034)		—		Indefinite
State NOLs	7,343		(7,343)		—		Various
Foreign Tax Credits	478		(478)		—		2031
Foreign NOLs	112		(112)		—		Indefinite
Foreign alternative minimum tax credits	305		—		305		2034
Total	$	54,627	$	(54,322)	$	305

Income Tax Valuation Allowance

The activity related to the income tax valuation allowance was as follows:


(in thousands)	2025		2024		2023
Beginning balance	$	64,488	$	834	$	2,152

Charged to expense	15,912		63,654		(58)
Release of allowance	—		—		(1,260)
Other	(84)		—		—
Ending balance	$	80,316	$	64,488	$	834

Schedule of Cash Flow, Supplemental Disclosures

Income taxes paid, net of refunds received, disaggregated by jurisdiction were as follows:



(in thousands)	2025		2024		2023
Federal	$	(6,617)	$	(25)	$	—
State	(204)		139		1,181
Foreign	1,974		97		3,990
Total taxes paid, net of refunds received	$	(4,847)	$	211	$	5,171

Income taxes paid, net of refunds received, exceeded 5% of total income taxes paid, net of refunds received, for the following individual jurisdictions:



(in thousands)	2025		2024		2023
State
California	$	(574)	$	(287)	$	328
Foreign
Canada	*		$	(561)	$	1,376
India	$	361	$	(946)	$	1,074
United Kingdom	$	1,275	$	1,736	$	1,561
Australia	*		$	(653)	*
Netherlands	*		$	306	*