Income Taxes

9 Months Ended

Feb. 26, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes from continuing operations for the nine months ended February 26, 2023 and February 27, 2022, was an (expense)/benefit of $(78) thousand and $5.6 million, respectively. The effective tax rate for the nine months ended February 26, 2023 and February 27, 2022 was 0.2% and 32.0%, respectively. The effective tax rate for the nine months ended February 26, 2023, was lower than the statutory federal income tax rate of 21% primarily due to the valuation allowance recorded against certain deferred tax assets, partially offset by the federal and state research and development tax credits.

As of both February 26, 2023 and May 29, 2022, the Company had unrecognized tax benefits of $1.0 million. Included in the balance of unrecognized tax benefits as of both February 26, 2023 and May 29, 2022, is $0.9 million of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next twelve months.

The Company has elected to classify interest and penalties related to uncertain tax positions as a component of its provision for income taxes. The Company has accrued an insignificant amount of interest and penalties relating to the income tax on the unrecognized tax benefits as of February 26, 2023 and May 29, 2022.

Due to tax attribute carryforwards, the Company is subject to examination for tax years 2013 forward for U.S. tax purposes. The Company is also subject to examination in various state jurisdictions for tax years 2012 forward, none of which were significant.