Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision (benefit) for income taxes on income (loss) from continuing operations consists of the following:

	2022		2021
Current
Federal	$	(117)	$	141
State	61		136
Total current	(56)		277
Deferred
Federal	(25)		(139)
State	(6)		(33)
Total deferred	(31)		(172)
Income tax provision (benefit)	$	(87)	$	105

Differences between the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to income (loss) from continuing operations before taxes are summarized as follows:

	2022			2021
Federal statutory rate	21		%	21		%
Statutory rate applied to income (loss) from continuing operations before taxes	$	(7,035)		$	1,104
Plus state income taxes, net of federal tax effect	43			81
Total statutory provision (benefit)	(6,992)			1,185
Effect of differences:
Nondeductible meals and entertainment	—			1
Executive compensation limitation	55			37
Federal tax credits	(279)			(227)
State tax credits	(11)			—
Reserve for uncertain tax positions	24			7
Change in valuation allowance	7,103			(857)
Stock-based compensation	66			(18)
Other items	(53)			(23)
Income tax provision (benefit)	$	(87)		$	105

During the fourth quarter of 2017, the Company recorded a full valuation allowance against its deferred tax assets, which remains in effect as of December 31, 2022. The Company intends to maintain this position until there is sufficient evidence to support the reversal of all or some portion of these allowances. The Company also has certain assets with indefinite lives for which the basis is different for book and tax. In accordance with ASC 740-10-30-18, the deferred tax liability related to these intangible assets cannot be used to offset deferred tax assets when determining the amount of the valuation allowance for deferred tax assets which are not more-likely-than-not to be realized. The result is that the Company is in a net deferred tax liability position of $91 at December 31, 2022 and December 25, 2021, which is recorded in other long-term liabilities in the Company's Consolidated Balance Sheets.

Due to its full valuation allowance against its deferred tax balances, the Company is only able to recognize refundable credits, a small amount of federal and state taxes, and benefits for the recognition of stranded tax effects within other comprehensive income (loss) related to the termination of certain derivative contracts in the tax provision (benefit) for 2021 and 2022.

Significant components of the Company's deferred tax assets and liabilities are as follows:

	2022		2021
Deferred tax assets:
Inventories	$	2,759	$	2,316
Retirement benefits	407		824
State net operating losses	4,306		3,033
Federal net operating losses	4,852		—
State tax credit carryforwards	1,669		1,669
Federal tax credit carryforwards	4,590		4,136
Allowances for bad debts, claims and discounts	1,680		1,779
Other	5,167		3,958
Total deferred tax assets	25,430		17,715
Valuation allowance	(21,345)		(12,851)
Net deferred tax assets	4,085		4,864
Deferred tax liabilities:
Property, plant and equipment	4,176		4,955
Total deferred tax liabilities	4,176		4,955
Net deferred tax liability	$	(91)	$	(91)

At December 31, 2022, the Company had approximately $31,180 of federal net operating loss carryforwards and approximately $79,312 of state net operating loss carryforwards available from both continuing and discontinued operations. In addition, $4,590 of federal tax credit carryforwards and $1,669 of state tax credit carryforwards were available to the Company. The federal tax credit carryforwards will expire between 2029 and 2043. The federal net operating loss carryforwards generated in 2022 have no expiration date. The state net operating loss carryforwards and the state tax credit carryforwards will expire between 2022 and 2042. A valuation allowance of $21,345 is recorded to reflect the estimated amount of deferred tax assets attributable to continuing operations that are estimated not to be realizable based on the available evidence. At December 31, 2022, the Company is in a net deferred tax liability position of $91 which is included in other long-term liabilities in the Company's Consolidated Balance Sheets.

Tax Uncertainties

The Company accounts for uncertainty in income tax positions according to FASB guidance relating to uncertain tax positions. Unrecognized tax benefits were $518 at December 31, 2022 and $494 at December 25, 2021. Such benefits, if recognized, would affect the Company's effective tax rate. There were no significant interest or penalties accrued as of December 31, 2022 or December 25, 2021.

The following is a summary of the change in the Company's unrecognized tax benefits:

	2022		2021
Balance at beginning of year	$	494	$	487
Additions based on tax positions taken during a current period	24		7
Balance at end of year	$	518	$	494

The Company and its subsidiaries are subject to United States federal income taxes, as well as income taxes in a number of state jurisdictions. The tax years subsequent to 2018 remain open to examination for U.S. federal income taxes. The majority of state jurisdictions remain open for tax years subsequent to 2018. A few state jurisdictions remain open to examination for tax years subsequent to 2017.