Income Taxes (Tables)

12 Months Ended

May 03, 2026

Schedule of Income Tax Expense Attributable to (Loss) Income from Operations

Income tax expense consists of:


(dollars in thousands)	2026			2025			2024
Current income tax expense (benefit)
U.S. federal	$	2		$	(579	)	$	42
U.S. state		5			4			—
Foreign		2,056			2,310			2,620
Total current income tax expense		2,063			1,735			2,662
Deferred income tax expense (benefit)
U.S. federal		1,642			3,872			4,505
U.S. federal loss carryforwards and credits		(1,642	)		(3,872	)		(4,505	)
U.S. state		(12	)		258			229
U.S. state carryforwards		12			(258	)		(229	)
Foreign		(137	)		(1,343	)		387
Total deferred income tax (benefit) expense	$	(137	)	$	(1,343	)	$	387
Total income tax expense (benefit)
U.S. federal	$	1,644		$	3,293		$	4,547
U.S. federal loss carryforwards and credits		(1,642	)		(3,872	)		(4,505	)
U.S. state		(7	)		262			229
U.S. federal & state carryforwards and credits		12			(258	)		(229	)
Foreign		1,919			967			3,007
Total income tax expense	$	1,926		$	392		$	3,049

Schedule of (Loss) Income before Income Taxes Related to Foreign and U.S. Operations

The components of loss before income taxes are as follows:


(dollars in thousands)	2026			2025			2024
United States	$	(15,081	)	$	(18,395	)	$	(18,614	)
Foreign		6,796			(316	)		7,844
	$	(8,285	)	$	(18,711	)	$	(10,770	)

Schedule of Reconciliation of U.S. Federal Statutory Income Tax Rate to Company's Effective Income Tax Rate

The following table reconciles the U.S. federal statutory income tax rate to the company's effective income tax rate. This reconciliation is based on the retrospective adoption of ASU 2023-09, which requires reconciling items to be presented on a quantitative basis in dollars and percentages, as well as reconciling items exceeding the disclosure threshold of 5% of the expected statutory rate presented separately.


	2026						2025						2024
	Amounts			Rate			Amounts			Rate			Amounts			Rate
U.S. federal statutory income tax rate	$	(1,740	)		21.0	%	$	(3,929	)		21.0	%	$	(2,262	)		21.0	%
Domestic Federal
Change in valuation allowance		2,356			(28.4	)		3,990			(21.3	)		3,157			(29.3	)
Stock-Based compensation		25			(0.3	)		59			(0.3	)		190			(1.8	)
Nontaxable and nondeductible items		127			(1.5	)		(2	)		(0.1	)		102			(0.9	)
Effect of Cross-border tax laws
Global intangible low-taxed income (GILTI)		340			(4.1	)		—			—			—			—
Deemed intercompany charge		261			(3.2	)		—			—			—			—
Other		62			(0.7	)		—			—			—			—
Domestic state income taxes, net of federal effect (1)
Change in valuation allowance		21			(0.3	)		309			(1.7	)		172			(1.6	)
Statutory income tax rate differential		(16	)		0.2			(305	)		1.6			(172	)		1.6
Foreign tax effects
China
Income tax effects of local currency foreign exchanges (losses) gains		(540	)		6.5			97			(0.5	)		386			(3.6	)
Statutory income tax rate differential		134			(1.6	)		223			(1.2	)		246			(2.3	)
Withholding taxes		114			(1.4	)		477			(2.5	)		711			(6.6	)
Other		(1	)		—			—			—			(5	)		0.1
Canada
Statutory income tax rate differential		250			(3.0	)		(280	)		1.5			50			(0.5	)
Withholding taxes		167			(2.0	)		(152	)		0.8			(10	)		0.1
Other	5				(0.1	)		46			(0.2	)		1			—
Haiti
Statutory income tax rate differential		169			(2.0	)		326			(1.7	)		405			(3.8	)
Other Foreign		(1	)		—			1			—			—			—
Worldwide changes in unrecognized income tax benefits		193			(2.3	)		(468	)		2.5			78			(0.7	)
Reported income tax expense (2) (3)	$	1,926			(23.2	)%	$	392			(2.1	)%	$	3,049			(28.3	)%

(1)

During fiscal 2026, state taxes in Tennessee, Kentucky, and South Carolina make up the majority (greater than 50%) of the tax effect in this category. During fiscal 2025, state taxes in Tennessee, South Carolina, and Kentucky make up the majority (greater than 50%) of the tax effect in this category. During fiscal 2024, state taxes in Tennessee, Mississippi, Georgia, and Wisconsin make up the majority (greater than 50%) of the tax effect in this category.

(2)

Our negative consolidated effective income tax rates during fiscal 2026, 2025, and 2024, were caused by the mix of earnings between our U.S. operations and foreign subsidiaries, as our taxable income stemmed from: (i) our operations located in China and from the gain on sale of Property located in Canada during fiscal 2026; (ii) our operations located in China that were partially offset by a pre-tax loss incurred in Canada due to our restructuring activities during fiscal 2025; and (iii) our operations located in both China and Canada during fiscal 2024, which such jurisdictions have higher income tax rates than the U.S. In addition, we applied a full valuation allowance against our U.S. deferred income tax assets during fiscal 2026, 2025, and 2024, respectively.

Consequently, an income tax benefit was not recognized for the pre-tax losses associated with our U.S. operations totaling $(15.1) million, $(18.4) million, and $(18.6) million that were incurred during fiscal 2026, 2025, and 2024, respectively.

(3)

Our negative consolidated effective income tax rates during fiscal 2026, 2025, and 2024 were further caused by pre-tax losses associated with our Haitian operations, which are not subject to income tax. Our Haitian operations are located in an economic zone that permits a 0% income tax rate for the first fifteen years of operations, for which we have six years remaining. As a result of the 0% income tax rate, an income tax benefit was not recognized for the pre-tax losses associated with our Haitian operations totaling $(804,000), $(1.6) million, and $(2.1) million that were incurred during fiscal 2026, 2025, and 2024, respectively.

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities consist of the following:


(dollars in thousands)	May 3, 2026			April 27, 2025
Deferred tax assets:
Accounts receivable	$	218		$	305
Inventories		2,424			2,128
Compensation		1,630			1,767
Liabilities and other		122			56
Intangible assets and goodwill		484			455
Property, plant, and equipment		183			178
Operating lease liability		338			744
Foreign income tax credits - U.S.		783			783
Loss carryforwards		24,230			22,521
Valuation allowance - U.S.		(28,680	)		(26,303	)
Total deferred tax assets	$	1,732		$	2,634


Deferred tax liabilities:
Undistributed earnings on foreign subsidiaries	$	(4,883	)	$	(5,155	)
Property, plant and equipment		(645	)		(1,010	)
Right of use assets		(564	)		(920	)
Other		(20	)		(67	)
Total deferred tax liabilities		(6,112	)		(7,152	)
Net deferred liabilities	$	(4,380	)	$	(4,518	)

Summary of Valuation Allowances Against U.S. Net Deferred Income Tax Assets

Based on our assessments as of May 3, 2026, and April 27, 2025, valuation allowances against our U.S. net deferred income tax assets pertain to the following:


(dollars in thousands)	May 3, 2026		April 27, 2025
U.S. federal and state net deferred income tax assets	$	26,350	$	23,973
U.S. capital loss carryforward		2,330		2,330
	$	28,680	$	26,303

Summary of Change in Valuation Allowances Against U.S. Net Deferred Income Tax Assets

A summary of the change in the valuation allowances against our U.S. net deferred income tax assets follows:


(dollars in thousands)	2026			2025		2024
Beginning balance	$	26,303		$	22,004	$	18,675
Change in valuation allowance associated with current year earnings		2,633			4,162		3,318
Change in estimate during current year		(256	)		137		11
Ending balance	$	28,680		$	26,303	$	22,004

Schedule of Unrecognized Tax Benefit

The following table sets forth the change in the company’s unrecognized income tax benefit:


(dollars in thousands)	2026		2025			2024
Beginning balance	$	790	$	1,258		$	1,179
Increases from prior period tax positions		193		224			197
Decreases from prior period tax positions		—		(76	)		(118	)
Lapse of applicable statute of limitations		—		(616	)		—
Ending balance	$	983	$	790		$	1,258

Summary of Income Taxes Paid (Refunded)

The following table sets forth income taxes paid (refunded) by jurisdiction:


(dollars in thousands)	2026			2025			2024
U.S. federal (1)	$	831		$	665		$	499
U.S. state, income tax payments, net of refunds (2)		(4	)		—			—
Foreign
China		1,143			1,785			2,317
Canada
Federal - income tax payments, net of refunds		976			(148	)		391
Quebec Province - income tax payments, net of refunds		615			2			77
Total Foreign		2,734			1,639			2,785
	$	3,561		$	2,304		$	3,284

(1)

Amounts related to U.S. federal solely relate to transition tax payments made in accordance with the TCJA.

(2)

U.S. state net income tax refunds totaling $4,000 represent the entire amount of U.S state net income tax refunds during fiscal 2026 and no individual U.S. state jurisdictions exceeded the required 5% of total income tax paid disclosure threshold.