The income tax provision for continuing operations includes the following:

State income tax benefits from loss carryforwards to future years were recognized as deferred tax assets in the 2026, 2025 and 2024 fiscal years.

In the fourth quarter of fiscal 2025, the Company recorded a deferred tax provision for undistributed foreign earnings that were previously considered indefinitely reinvested. The Company recorded a deferred tax charge of $2,147 related to these undistributed earnings. While the Company has pursued, and continues to pursue, investment opportunities overseas for these funds, the Company no longer considers the funds to be indefinitely reinvested.

The Company’s pre-tax earnings from continuing operations in the United States and foreign locations are as follows:

A reconciliation of the U.S. federal statutory rate to the Company’s effective income tax rate is as follows:

The Company had state net operating loss carryforwards of $1,611 and $386 as of March 1, 2026 and March 2, 2025, respectively, and total net foreign operating loss carryforwards of $7,791 as of both March 1, 2026 and March 2, 2025. The Company had valuation allowances against the remaining carryforwards as of March 1, 2026 and March 2, 2025. The state net operating loss carryforwards will expire in 2026 through 2041.

The Company had Arizona tax credits of $990 in both the 2026 and 2025 fiscal years for which there were valuation allowances as of March 1, 2026 and March 2, 2025.

The deferred tax asset valuation allowance of $2,938 as of March 1, 2026 relates to the above foreign net operating losses and state tax credit carryforwards from continuing operations for which the Company does not expect to realize any tax benefit. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes.

Significant components of the Company's deferred tax assets and liabilities from continuing operations as of March 1, 2026 and March 2, 2025 were as follows:

The amount of cash taxes paid, net of refunds, by the Company during 2026 is as follows:

As of March 1, 2026 and March 2, 2025, the Company had gross unrecognized tax benefits and related interest of $39 and $71, respectively, included in other liabilities.  If any portion of the unrecognized tax benefits as of March 1, 2026 were recognized, the Company’s effective tax rate would decrease. The change as of March 1, 2026 was due to a reduction in uncertain tax positions of $32 related to expiring statutes of limitations on tax positions taken in prior years regarding certain state tax related items.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for continuing operations is as follows:

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons, including adding or subtracting amounts for current year tax positions, expiration of statutes of limitations on open income tax years, changes in the Company’s judgment about the level of uncertainty, status of tax examinations, and legislative changes. Changes in prior period tax positions are the result of a re-evaluation of the probability of realizing the benefit of a particular tax position based on new information.

A list of open tax years by major jurisdiction follows:

The Company had $11 and $19 of accrued interest and penalties as of March 1, 2026 and March 2, 2025, respectively. The Company’s policy is to include applicable interest and penalties related to unrecognized tax benefits as a component of current income tax expense.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The Company completed its assessment of the OBBBA corporate tax provisions which were enacted on July 4, 2025. OBBBA contained a number of U.S. corporate tax provisions, of which the Company elected to expense U.S. incurred research or experimental expenditures immediately and full bonus depreciation for certain assets placed into service after January 19, 2025. As a result of the Company’s elections, the Company’s U.S. cash taxes decreased in 2026 with no material impact to its effective tax rate.

On August 16, 2022, the Inflation Reduction Act was signed into law. The Inflation Reduction Act includes various tax provisions, which are effective for tax years beginning on or after January 1, 2023. For tax years beginning after December 31, 2021, the Tax Cuts & Jobs Act of 2017 eliminated the option to deduct research and development expenditures as incurred and instead required taxpayers to capitalize and amortize them over five or 15 years beginning in 2022. The Company incurred research and development expenses in the U.S. in 2025 and 2024 and, as such, the research and development expense addback is in the U.S. tax return for those years. This provision was eliminated by the OBBBA and the Company has elected to expense U.S. incurred research and development expenditures immediately in 2026.

The Company has no ongoing examinations of its federal returns.