INCOME TAXES

12 Months Ended

Jan. 28, 2024

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 17 – INCOME TAXES

Our provision for income taxes was as follows for the periods indicated:

	Fifty-Two Weeks Ended
	January 28,		January 29,			January 30,
	2024		2023			2022
Current expense
Federal	$	6	$	1,024		$	650
Foreign		47		75			107
State		-		223			307
Total current expense		53		1,322			1,064
Deferred taxes
Federal		2,227		(2,617	)		1,980
State		293		(542	)		344
Total deferred taxes		2,520		(3,159	)		2,324
Income tax (benefit)/expense	$	2,573	$	(1,837	)	$	3,388

Total tax expense for fiscal 2024 was $2.6 million, of which $2.6 million expense was allocated to continuing operations and $41,000 tax benefit was allocated to other comprehensive income. Total tax benefit for fiscal 2023 was $1.5 million, of which $1.8 million benefit was allocated to continuing operations and $288,000 tax expense was allocated to other comprehensive income. Total tax expense for fiscal 2022 was $3.6 million, of which $3.4 million expense was allocated to continuing operations and $237,000 tax expense was allocated to other comprehensive income.

The effective income tax rate differed from the federal statutory tax rate as follows for the periods indicated:

	Fifty-Two Weeks Ended
	January 28,			January 29,			January 30,
	2024			2023			2022
Income taxes at statutory rate		21.0	%		21.0	%		21.0	%
Increase (decrease) in tax rate resulting from:
State taxes, net of federal benefit		1.9			4.1			3.4
Officer's life insurance		-1.7			4.0			-1.3
Expiration of capital loss		0.0			0.0			2.0
Change in valuation allowance		0.1			-0.2			-1.9
Other		-0.6			1.0			-0.8
Effective income tax rate		20.7	%		29.9	%		22.4	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities for the period indicated were:

	January 28,			January 29,
	2024			2023
Assets
Intangible assets	$	5,590		$	6,409
Inventories		-			3,618
Deferred compensation		2,494			3,007
Allowance for bad debts		816			889
Employee benefits		1,008			746
Loss and credit carryover		6,655			418
Accrued liabilities		238			79
Deferred rent		716			605
Other		-			215
Total deferred tax assets		17,517			15,986
Valuation allowance		(107	)		(100	)
		17,410			15,886
Liabilities
Property, plant and equipment		1,710			1,117
Inventories		3,319			-
Other		376			285
Total deferred tax liabilities		5,405			1,402
Net deferred tax assets	$	12,005		$	14,484

At January 28, 2024 and January 29, 2023 our net deferred tax asset was $12.0 million and $14.5 million, respectively. The increase in the valuation allowance of $7,000 was due to additional foreign tax credit carry forward. We expect to fully realize the benefit of the deferred tax assets, with the exception of a portion of the foreign tax credit carry forward, in future periods when the amounts become deductible.

We have federal and state net operating loss carry forwards of $22.7 million and $14.4 million, respectively, which have various expiration dates beginning in fiscal 2039 through fiscal 2044, with some having an indefinite carry forward period. We have foreign tax credit carry forwards of $147,000 which expire beginning in fiscal 2029 through fiscal 2034. We also have charitable contribution carry forwards of $3.2 million, which expire in fiscal 2028 and fiscal 2029.

Current accounting standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also addresses de-recognition, classification, interest and penalties, accounting in interim periods and disclosure. We do not have unrecognized tax benefits as of January 28, 2024.

Tax years ending January 31, 2021 through January 28, 2024 remain subject to examination by federal and state taxing authorities.