v3.24.2
Income Taxes (Tables)
 12 Months Ended
May 25, 2024
Income Tax Disclosure [Abstract]  
Schedule of Current and Deferred Income Tax Provision for Federal, State and Foreign Income Taxes Attributable to Operations
The following table represents the current and deferred income tax expense (benefit) for federal, state and foreign income taxes attributable to operations (in thousands):
For the Years Ended
May 25,
2024		May 27,
2023		May 28,
2022
Current:
Federal$3,245 $19,317 $20,210 
State1,422 6,323 4,131 
Foreign3,596 2,945 2,464 
8,263 28,585 26,805 
Deferred:
Federal935 (6,613)(5,838)
State273 (1,357)1,884 
Foreign(676)(2,356)(7,058)
532 (10,326)(11,012)
Income tax expense$8,795 $18,259 $15,793 
Schedule of Income before Provision for Income Taxes
Income before income tax expense is as follows (in thousands):
For the Years Ended
May 25,
2024		May 27,
2023		May 28,
2022
Domestic$23,084 $60,835 $68,416 
Foreign6,745 11,783 14,552 
Income before income tax expense$29,829 $72,618 $82,968 
Schedule of Effective Income Tax Rate Reconciliation
The income tax expense (benefit) differs from the amount that would result from applying the federal statutory rate as follows:
For the Years Ended
May 25,
2024		May 27,
2023		May 28,
2022
Statutory tax rate21.0  %21.0  %21.0  %
State taxes, net of federal benefit4.6 5.6 5.7 
Non-U.S. rate adjustments2.8 1.4 0.7 
Stock-based compensation2.2 (0.1)0.3 
Valuation allowance5.8 (1.7)(6.5)
U.S. international tax impact, net of credits
0.9 0.4 0.3 
Worthless stock deduction- - (3.2)
FIN480.2 0.1 - 
Contingent consideration (1)
(3.1)- - 
Section 986(c) foreign exchange loss (1)
(1.3)- - 
Capital loss carryforward (1)
(6.2)- - 
Permanent items2.5 0.3 1.0 
Tax impact of foreign rate changes0.2 (0.4)(0.2)
Return-to-provision & other adjustments(0.5)(1.6)0.1 
Other, net0.4 0.1 (0.2)
Effective tax rate29.5  %25.1  %19.0  %

(1)     Our current year rate primarily benefited from the nontaxable income on the reversal of CloudGo's contingent liability, a foreign exchange loss as a result of the repatriation of funds from our Japan subsidiary and the benefit of the capital loss carryforward, partially offset with a valuation allowance as a result of the pending sale of the Company’s Irvine building.
Schedule of the Components of Net Deferred Tax Asset (Liability)
The components of the net deferred tax asset (liability) consist of the following (in thousands):
As of
May 25,
2024		As of
May 27,
2023
Deferred tax assets:
Allowance for credit losses$482 $642 
Accrued compensation4,089 5,477 
Accrued expenses970 487 
Lease liability3,345 4,532 
Stock options and restricted stock3,870 4,599 
Foreign tax credit 477 431 
Net operating losses17,714 16,623 
Capital loss carryforwards
2,343 - 
State taxes113 354 
Property and equipment782 80 
Gross deferred tax asset34,185 33,225 
Valuation allowance(8,550)(6,514)
Gross deferred tax asset, net of valuation allowance25,635 26,711 
Deferred tax liabilities:
ROU asset(2,911)(3,998)
Outside basis difference - Sweden investment(262)(262)
Goodwill and intangibles(19,830)(18,886)
Net deferred tax asset$2,632 $3,565 
Summary of Net Operating Loss Expiration Periods The following table summarizes the foreign net operating losses expiration periods (in thousands):
Expiration PeriodsAmount of Net Operating Losses
Fiscal Years Ending:
2026$21 
2027 and beyond1,111 
Unlimited68,560 
Total$69,692 
Summary of Activity in Valuation Allowance
The following table summarizes the activity in the Company’s valuation allowance accounts (in thousands):
Beginning
Balance		Charged to
Operations		Currency
Rate
Changes		Ending
Balance
Years Ended:
May 28, 2022$13,263 $(3,152)$(1,862)$8,249 
May 27, 2023$8,249 $(1,343)$(392)$6,514 
May 25, 2024$6,514 $1,964 $72 $8,550 
Summary of the Activity Related to Gross Unrecognized Tax Benefits
The following table summarizes the activity related to the gross unrecognized tax benefits (in thousands):
For the Years Ended
May 25,
2024		May 27,
2023		May 28,
2022
Unrecognized tax benefits, beginning of year$962 $908 $872 
Gross increases-tax positions in prior period71 54 36 
Unrecognized tax benefits, end of year$1,033 $962 $908