Income Taxes (Tables)

9 Months Ended

12 Months Ended

Oct. 01, 2013

Jan. 01, 2013

The following table presents the Company's provision for income taxes for the three quarters ended October 1, 2013 and October 2, 2012 (dollars in thousands):



	October 1, 2013			October 2, 2012
Provision for income taxes	$	2,633		$	2,540
Effective tax rate	38.0		%	41.3		%

The components of the provision (benefit) for income taxes are as follows for 2012, 2011 and 2010 (in thousands):



	2012		2011			2010
Current tax provision:
Federal	$	49	$	—		$	47
State	559		260			6
	608		260			53
Deferred tax provision (benefit):
Federal	2,591		1,945			(340		)
State	16		(425		)	(79		)
	2,607		1,520			(419		)
Total provision (benefit) for income taxes	$	3,215	$	1,780		$	(366	)

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of income tax provision (benefit) that would result from applying the federal statutory rate to pre-tax income as shown in the accompanying consolidated statements of income is as follows for 2012, 2011 and 2010 (in thousands):



	2012			2011			2010
Federal income expense at federal rate	$	2,848		$	1,907		$	684
State income tax, net of related federal income tax benefit	420			257			8
Permanent items—primarily incentive stock options and cash settlement of options	83			(10		)	(626		)
Foreign rate differential	106			—			—
Change in blended state rate	—			(25		)	—
Other items, net	(242		)	(349		)	(432		)
Provision (benefit) for income taxes	$	3,215		$	1,780		$	(366	)
Effective income tax rate	38.4		%	31.7		%	(18.2		)%

Schedule of Deferred Tax Assets and Liabilities

Deferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax liabilities and assets consist of the following (in thousands):



	2,012			2,011
Noncurrent deferred tax assets (liabilities):
Loss carry forwards	$	2,445		$	3,275
Deferred rent and franchise revenue	9,622			7,696
Property, equipment and intangible assets	(11,061		)	(6,628		)
Stock-based compensation	994			514
Alternative minimum tax credits	256			205
Interest rate swap	38			183
Other	497			251
Total noncurrent net deferred tax assets	2,791			5,496
Current deferred tax assets (liabilities):
Inventory smallwares	(1,459		)	(1,146		)
Other	436			283
Total current deferred tax liabilities	(1,023		)	(863		)
Net deferred tax assets	$	1,768		$	4,633