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Income Taxes
 12 Months Ended
Dec. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes 23. Income Taxes
The components of income before provision for income taxes are as follows:
(in millions)
Year Ended
December 30,
2023		Year Ended
December 31,
2022		Year Ended
January 1,
2022
United States$9.1 $77.6 $221.2 
Foreign79.0 115.8 53.2 
Total
$88.1 $193.4 $274.4 
The following table presents the current and deferred provision (benefit) for income taxes:
(in millions)Year Ended
December 30,
2023		Year Ended
December 31,
2022		Year Ended
January 1,
2022
Current:
Federal$15.0 $48.7 $38.1 
State3.5 6.1 7.1 
Foreign23.7 34.4 14.7 
Subtotal$42.2 $89.2 $59.9 
Deferred:
Federal$(12.5)$(20.5)$(4.9)
State(9.0)(8.7)(6.1)
Foreign(14.1)(10.1)(4.1)
Subtotal
(35.6)(39.3)(15.1)
Total
$6.6 $49.9 $44.8 
Included in the fiscal year 2023, 2022 and 2021 tax provisions are increases of $7.4 million, $4.5 million and $3.6 million, respectively, for tax and accrued interest related to uncertain tax positions for each fiscal year.
The reconciliation of the U.S. federal statutory tax rate to the Company’s effective tax rate is as follows:
Year Ended
December 30,
2023		Year Ended
December 31,
2022		Year Ended
January 1,
2022
Statutory regular federal income tax rate21.0 %21.0 %21.0 %
U.S. tax on foreign income, net10.0 4.8 0.9 
Foreign income taxed at different rates1.1 — (0.3)
Transaction-related costs— 0.9 — 
Nondeductible executive compensation(1.6)2.9 2.1 
Derecognition of uncertain tax position(2.3)(0.8)(1.0)
State provision, net of federal benefit(4.9)(1.0)0.3 
Excess stock-based compensation(3.2)(1.2)(5.5)
Research and development tax credits(5.1)(1.7)(1.8)
Tax Credit(9.2)— — 
Other1.6 0.9 0.6 
Total
7.4 %25.8 %16.3 %
As of December 30, 2023, the Company has accumulated undistributed earnings generated by its foreign subsidiaries of approximately $875.5 million. Because such earnings have previously been subject to U.S. tax are eligible for a dividends received deduction when repatriated, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of its foreign investments would generally be limited to foreign withholding and state taxes. The Company considers $86.5 million of these accumulated undistributed earnings as no longer permanently reinvested and has accrued foreign withholding and state taxes, net of estimated foreign tax credits, of $1.9 million. The Company intends, however, to indefinitely reinvest the remaining $789.0 million of earnings. If the Company decides to distribute such permanently reinvested earnings, the Company would accrue estimated additional income tax expense of up to approximately $23.1 million.
The components of the deferred tax assets are as follows:
(in millions)December 30,
2023		December 31,
2022
Deferred tax assets:
Net operating losses$53.7 $34.7 
Tax credits33.2 18.0 
Capitalized R&D33.0 18.5 
Deferred revenue28.0 27.8 
Accrued liabilities24.6 32.1 
Interest15.6 22.4 
Stock-based compensation12.3 10.9 
Operating lease liabilities9.7 8.7 
Other7.3 5.8 
Total217.4 178.9 
Valuation allowance(18.9)(7.3)
Total deferred tax assets$198.5 $171.6 
Deferred tax liabilities:
Inventory$(0.8)$(4.0)
Interest rate hedge(1.9)(4.1)
Withholding taxes on undistributed foreign earnings(3.1)(2.8)
State taxes and other(10.4)(7.5)
Operating lease liabilities(11.8)(8.6)
Property and equipment(14.4)(18.2)
Intangible assets(160.5)(186.7)
Other(0.2)(0.9)
Total deferred tax liabilities(203.1)(232.8)
Net deferred tax assets$(4.6)$(61.2)
As of December 30, 2023, the Company has $39.0 million and $208.1 million of net operating losses from federal and various state jurisdictions, which will begin to expire in 2037 and 2024, respectively. Additionally, the Company has $114.7 million of net operating losses from foreign jurisdictions that will begin to expire in 2024. The Company also has federal research and development tax credits of $2.8 million that will begin to expire in 2031, state research and development tax credits of $29.5 million that will carry forward indefinitely, $2.3 million of foreign tax credits on research and development expenditures that will begin to expire in 2042 and $8.2 million of Swiss tax credits that will begin to expire in 2026. In assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that all or some portion of the deferred tax assets will not be realized. In making this determination, the Company considered all available positive and negative evidence, including scheduled reversals of liabilities, projected future taxable income, tax planning strategies and recent financial performance.
During the year ended December 31, 2022, the Company established a valuation allowance to reduce the deferred tax assets relating to certain acquired operating losses in certain foreign jurisdictions that the Company believes are not likely to be realized. During the year ended December 30, 2023, there was an increase in the valuation allowance of $11.6 million, primarily due to the losses of certain foreign operations, and additional valuation allowance established, within the Purchase Price Allocation measurement period, to reduce the deferred tax assets relating to certain acquired operating losses in certain state jurisdictions that the Company believes are not likely to be realized.
As a result of certain business and employment actions undertaken by the Company, income earned in a certain European country is subject to a reduced tax rate through 2023. For the year ended December 30, 2023 and December 31, 2022, the estimated income tax benefit related to such business arrangement was $1.4 million and $1.7 million, respectively, and impacted net income per diluted share by $0.03 for each year.
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:
(in millions)Year Ended
December 30,
2023		Year Ended
December 31,
2022
Unrecognized tax benefits (gross), beginning of period$26.1 $21.6 
Increase from tax positions in current period7.9 6.0 
Increase from tax positions in prior period1.3 0.7 
Decrease from tax position in prior period— (0.6)
Lapse of statute of limitations(2.3)(1.6)
Unrecognized tax benefits (gross), end of period$33.0 $26.1 
The amount of unrecognized benefits which, if ultimately recognized, could favorably affect the tax rate in a future period was $30.6 million and $24.0 million as of December 30, 2023 and December 31, 2022, respectively. It is reasonably possible that the amount of unrecognized tax benefits in various jurisdictions may change in the next twelve months due to the expiration of statutes of limitation and audit settlements. However, due to the uncertainty surrounding the timing of these events, an estimate of the change within the next twelve months cannot currently be made.
For the year ended December 30, 2023 the Company recorded an expense of $1.0 million for interest and penalties related to unrecognized tax benefits as part of income tax expense. For the year ended December 31, 2022, the Company recorded a benefit of $0.3 million for interest and penalties related to unrecognized tax benefits as part of income tax expense.
Total accrued interest and penalties related to unrecognized tax benefits as of December 30, 2023 and December 31, 2022 were $2.1 million and $1.1 million, respectively.
The Company conducts business in multiple jurisdictions and, as a result, one or more of the Company’s subsidiaries files income tax returns in U.S. federal, various state, local and foreign jurisdictions. The Company has concluded all U.S. federal income tax matters through fiscal year 2019. All material state, local and foreign income tax matters have been concluded through fiscal year 2016.
The Company does not believe that the results of any tax authority examination would have a significant impact on its consolidated financial statements.