Income Taxes (Tables)

12 Months Ended

May 28, 2022

Schedule of Income (Loss) Before Income Tax, Domestic and Foreign

Income (loss) before income taxes included the following components (in thousands):

	Fiscal Year Ended
	May 28, 2022		May 29, 2021		May 30, 2020
United States	$	12,299	$	1,077	$	(3,716	)
Foreign		3,460		1,231		2,502
Income (loss) before income taxes	$	15,759	$	2,308	$	(1,214	)

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes for fiscal 2022, fiscal 2021 and fiscal 2020 consisted of the following (in thousands):

	Fiscal Year Ended
	May 28, 2022			May 29, 2021			May 30, 2020
Current:
Federal	$	(4,213	)	$	108		$	—
State		950			—			—
Foreign		1,038			665			616
Total current		(2,225	)		773			616
Deferred:
Federal		—			—			(88	)
Foreign		57			(120	)		96
Total deferred		57			(120	)		8
Income tax (benefit) provision	$	(2,168	)	$	653		$	624

Schedule of Effective Income Tax Rate Reconciliation

The differences between income taxes at the U.S. federal statutory income tax rate of 21.0% for fiscal 2022, fiscal 2021 and fiscal 2020 and the reported income tax provision for fiscal 2022, fiscal 2021 and fiscal 2020, are summarized as follows:

	Fiscal Year Ended
	May 28, 2022			May 29, 2021			May 30, 2020
Federal statutory rate		21.0	%		21.0	%		21.0	%
Effect of:
State income taxes, net of federal tax benefit		5.5			21.6			6.6
Foreign taxes at other rates		4.5			10.5			(15.3	)
Permanent tax differences		(2.0	)		18.3			(41.1	)
Change in valuation allowance for deferred tax assets		(43.1	)		(49.7	)		(29.8	)
Return to provision adjustments		0.2			2.2			1.4
Other		0.2			4.4			5.8
Effective tax rate		(13.7	)%		28.3	%		(51.4	)%

Schedule of Deferred Tax Assets and Liabilities

	Fiscal Year Ended
	May 28, 2022			May 29, 2021
Deferred tax assets:
NOL carryforwards - foreign and domestic	$	2,796		$	7,362
Inventory valuations		1,571			1,501
Goodwill		1,182			1,286
Foreign tax credits		1,782			1,782
Severance reserve		183			185
Foreign capital loss		1,224			1,261
Other		1,480			1,469
Subtotal		10,218			14,846
Valuation allowance - foreign and domestic		(3,474	)		(12,225	)
Net deferred tax assets after valuation allowance		6,744			2,621
Deferred tax liabilities:
Accelerated depreciation		(2,406	)		(2,279	)
Tax on undistributed earnings		(24	)		(24	)
Other		(1	)	18
Subtotal		(2,431	)		(2,285	)
Net deferred tax assets	$	4,313		$	336
Supplemental disclosure of net deferred tax assets, excluding valuation allowance:
Domestic	$	6,017		$	10,653
Foreign		1,770			1,913
Total	$	7,787		$	12,566

On December 22, 2017, the U.S. government enacted new tax legislation, Tax Cuts and Jobs Act (the “Act”). The Company was subject to requirements of the Act beginning in fiscal 2019. Provisions include an income inclusion for global intangible low-taxed income (“GILTI”), a tax determined by base erosion and anti-avoidance tax (“BEAT”) related to certain payments between a U.S. corporation and foreign related entities, a limitation of certain executive compensation and a deduction for foreign derived intangible income. The Company has determined its accounting policy to treat the taxes due on GILTI as a period cost. The Company is not subject to the BEAT provision due to the revenue thresholds.

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to the unrecognized tax benefits (in thousands):

	Fiscal Year Ended
	May 28, 2022			May 29, 2021
Unrecognized tax benefits, beginning of period	$	142		$	129
Currency translation adjustment		(17	)		13
Unrecognized tax benefits, end of period	$	125		$	142