v3.25.2
Income Taxes
 12 Months Ended
Apr. 26, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following tables reflect the significant components of our income tax provision. The pretax income (loss) attributable to domestic and foreign operations was as follows:
Year Ended
April 26, 2025April 27, 2024April 29, 2023
Domestic$(13,407)$46,763 $10,125 
Foreign7,556 7,288 3,132 
(Loss) Income before income taxes$(5,851)$54,051 $13,257 
Income tax expense (benefit) consisted of the following:
Year Ended
April 26, 2025April 27, 2024April 29, 2023
Current:
Federal$6,819 $21,174 $6,321 
State1,786 5,512 1,381 
Foreign1,965 1,813 2,273 
Deferred:
Federal(5,308)(8,101)(3,025)
State(946)(1,045)(456)
Foreign(46)77 (39)
$4,270 $19,430 $6,455 
The reconciliation of the provision for income taxes and the amount computed by applying the federal statutory rate to income before income taxes is as follows:
Year Ended
April 26, 2025April 27, 2024April 29, 2023
Computed income tax expense at federal statutory rates$(1,229)$11,351 $2,784 
State taxes, net of federal benefit819 3,771 731 
Change in fair value on convertible debt4,729 3,476 — 
Change in valuation allowances655 2,076 2,078 
Research and development tax credit(1,025)(1,203)(684)
Foreign-Derived Intangible Income (FDII)(183)(322)(128)
Meals and entertainment318 282 149 
Stock compensation(853)(178)262 
Other, net288 114 288 
Write-down of Deferred Taxes499 — — 
Section 162(m)142 — — 
Effect of foreign tax rates different than statutory(81)79 417 
Change in uncertain tax positions112 (35)(86)
GILTI79 19 6 
Base Erosion Anti-Abuse Tax (BEAT)— — 87 
Goodwill Impairment— — 551 
$4,270 $19,430 $6,455 

Our effective tax rate for fiscal 2025 was (73.0) percent. The effective income tax rate for fiscal 2025 was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, and a write down of deferred taxes related to debt issuance costs on the conversion of the Convertible Note.
Our effective tax rate for fiscal 2024 was 35.9 percent. During fiscal 2024, our effective income tax rate was primarily impacted due to the fair value adjustment to the Convertible Note that is not deductible for tax purposes. Additional other items impacting the rate were valuation allowances on equity investments, state taxes, as well as prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.
Our effective tax rate for fiscal 2023 was 48.7 percent. During fiscal 2023, our effective income tax rate was impacted due to valuation allowances on equity investments and on foreign net operating losses in Ireland, goodwill impairments, state taxes, a mix of taxes in foreign countries where the tax rate is higher than the United States, and prior year provision to return adjustments reduced in part by tax benefits from permanent tax credits.
The components of the net deferred tax assets were as follows:
April 26, 2025April 27, 2024
Deferred tax assets:
Accrued warranty obligations$8,819 $9,361 
Vacation accrual2,443 2,170 
Deferred maintenance revenue998 777 
Allowance for excess and obsolete inventory3,590 3,362 
General reserve628 — 
Equity compensation282 234 
Allowance for credit losses accounts4,242 1,015 
Inventory capitalization3,115 3,956 
Accrued compensation and benefits942 424 
Net operating loss carry forwards862 885 
Outside basis difference in equity method investments7,030 6,295 
Section 174 Capitalization12,840 9,878 
Research and development tax credit carry forwards76 72 
Lease accounting - lease liability1,250 1,038 
Other646 630 
Total deferred tax assets47,763 40,097 
Valuation allowance(7,887)(7,197)
Net deferred tax assets39,876 32,900 
Deferred tax liabilities:
Property and equipment(5,904)(5,506)
Lease accounting - right of use asset(1,250)(1,020)
Prepaid expenses(557)(477)
Unrealized gain on foreign currency exchange(146)(64)
Other— (114)
Total deferred tax liabilities(7,857)(7,181)
Net deferred tax asset$32,019 $25,719 
The classification of the net deferred tax assets in the accompanying Consolidated Balance Sheets is:
April 26, 2025April 27, 2024
Non-current assets$32,104 $25,862 
Non-current liabilities(85)(143)
$32,019 $25,719 
The summary of changes in the amounts related to unrecognized uncertain tax benefits are:
April 26, 2025April 27, 2024
Balance at beginning of year$356 $392 
Gross increases related to prior period tax positions24 15 
Gross decreases related to prior period tax positions(22)(3)
Gross increases related to current period tax positions122 123 
Lapse of statute of limitations(34)(171)
Balance at end of year$446 $356 
All of our unrecognized tax benefits would have an impact on the effective tax rate if recognized. It is reasonably possible that the amount of unrecognized tax benefits could change due to one or more of the following events occurring in the next 12 months: expiring statutes, audit activity, tax payments, or competent authority proceedings. A statute of limitations relating to $69 of the unrecognized tax benefits (including interest) expires in the next 12 months. The benefit will be recognized if the statute lapses with no further action taken by regulators. Additionally, we recognized the release of $34 in unrecognized tax benefits related to the lapse of a statute of limitations in fiscal 2025.
Interest and penalties incurred associated with uncertain tax positions are included in the “Income tax expense” line item in our Consolidated Statements of Operations. Accrued interest and penalties are included in the related tax liability line item in our Consolidated Balance Sheets of $41 and $21 as of April 26, 2025 and April 27, 2024, respectively.
As of April 26, 2025, we had total valuation allowances against deferred tax assets of $7,887, as compared to $7,197 as of April 27, 2024, representing an increase of $690 during fiscal 2025. The increase in valuation allowance as well as the majority of the total balance is related to the outside basis difference and impairments in equity method investments. A small portion of the total valuation allowances are related to foreign net operating loss carryfowards as described below. We consider all positive and negative evidence available in determining the potential of realizing deferred tax assets, including their past operating results and the forecast of future earnings, category of income, future taxable income, and prudent and feasible tax planning strategies. If sufficient evidence of our ability to generate applicable taxable income in the jurisdictions in which we currently maintain a valuation allowance causes us to determine that our deferred tax assets are more likely than not realizable, we would release our valuation allowance, which would result in an income tax benefit being recorded in our Consolidated Statements of Operations.
As of April 26, 2025, we had foreign net operating loss (“NOL”) carryforwards of approximately $4,876 primarily related to our operations in Belgium and Ireland, which have indefinite lives. A deferred tax asset has been recorded for all NOL carryforwards totaling approximately $860. However, due to uncertainty in future taxable income, a valuation allowance has been recorded for the full amount of the asset.
Additional tax information:
We are subject to United States federal income tax as well as income taxes of multiple state and foreign jurisdictions. Fiscal years 2022, 2023, and 2024 remain open to federal tax examinations, and fiscal years 2021, 2022, 2023 and 2024 remain open for state income tax examinations. Certain subsidiaries are also subject to income tax in several foreign jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2013. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense in our Consolidated Statements of Operations.
As of April 26, 2025, we had no deferred tax liability recognized relating to our investment in foreign subsidiaries where the earnings have been indefinitely reinvested. The Tax Act of 2017 generally eliminates United States federal income taxes on dividends from foreign subsidiaries, and, as a result, the accumulated undistributed earnings would be subject only to other taxes, such as withholding taxes and state income taxes, on the distribution of such earnings. No additional withholding or income taxes have been provided for any remaining undistributed foreign earnings not subject to the one-time deemed repatriation tax, as it is our intention for these amounts to continue to be indefinitely reinvested in foreign operations in all of our non-United States jurisdictions.
In October 2021, the Organization for Economic Co-operation and Development (“OECD”)/G20 finalized the significant components of a two-pillar global tax reform plan, which has now been agreed to by the majority of OECD members. Pillar Two requires multinational enterprises with annual global revenue exceeding €750 million to pay a global minimum tax of 15 percent. We currently are under the compliance requirement thresholds as of April 26, 2025. We will continue to evaluate the potential impact on future periods of the Pillar Two framework and the implementation of the Pillar Two rules in the jurisdictions in which we operate. We do not anticipate that Pillar Two compliance will have a material impact on our financial statements.