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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Note 15. Income Taxes Income Tax Assets and Liabilities - The Company accounts for income taxes whereby deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax accounting for assets and liabilities. Also, deferred tax assets are reduced by a valuation allowance to the extent that management cannot conclude that it is more likely than not that a portion of the deferred tax asset will be realized in the future. The Company evaluates the deferred tax assets on a continuous basis throughout the year to determine whether or not a valuation allowance is appropriate. Factors used in this determination include future expected income and the underlying asset or liability which generated the temporary tax difference. The income tax provision is primarily impacted by federal statutory rates, state and foreign income taxes, and changes in the valuation allowance. Income (loss) before provision for income taxes consists of the following (in thousands):
|  | Years Ended |
|  | December 31, 2016 |  |  | December 26, 2015 |  |  | December 27, 2014 |
Domestic |  | $ | 25,372 |  |  | $ | 178 |  |  | $ | (15,691 | )
Foreign |  |  | 3,763 |  |  |  | 5,390 |  |  |  | 4,070 |
Income (loss) before income taxes |  | $ | 29,135 |  |  | $ | 5,568 |  |  | $ | (11,621 | )
The provision (benefit) for income taxes consists of the following (in thousands):
|  | Years Ended |
|  | December 31, 2016 |  |  | December 26, 2015 |  |  | December 27, 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 697 |  |  | $ | 148 |  |  | $ | 358 |
State |  |  | 85 |  |  |  | 3 |  |  |  | (151 | )
Foreign |  |  | 2,111 |  |  |  | 2,266 |  |  |  | 1,327 |
|  |  | 2,893 |  |  |  | 2,417 |  |  |  | 1,534 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (16,641 | ) |  |  | 190 |  |  |  | 17,368 |
State |  |  | (320 | ) |  |  | 3 |  |  |  | 550 |
Foreign |  |  | (832 | ) |  |  | 53 |  |  |  | 45 |
|  |  | (17,793 | ) |  |  | 246 |  |  |  | 17,963 |
Provision (benefit) for income taxes |  | $ | (14,900 | ) |  | $ | 2,663 |  |  | $ | 19,497 |
Significant components of the Company's deferred tax assets and liabilities are as follows (in thousands):
|  | At |
|  | December 31, 2016 |  |  | December 26, 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Reserves and accruals |  | $ | 11,043 |  |  | $ | 13,712 |
Deferred revenue |  |  | 349 |  |  |  | 1,154 |
Shared based compensation |  |  | 2,590 |  |  |  | 3,856 |
Tax credit carry-forwards |  |  | 10,112 |  |  |  | 8,658 |
Net operating losses |  |  | 8,434 |  |  |  | 13,218 |
Depreciation & amortization |  |  | (2,898 | ) |  |  | 366 |
Other |  |  | (1,252 | ) |  |  | 94 |
Total deferred tax assets |  |  | 28,378 |  |  |  | 41,058 |
Less: Valuation allowance |  |  | (10,980 | ) |  |  | (36,786 | )
Total deferred tax assets net of valuation allowance |  |  | 17,398 |  |  |  | 4,272 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation & amortization |  |  | (6 | ) |  |  | (2,537 | )
Other |  |  | (14 | ) |  |  | (1,137 | )
Total deferred tax liabilities |  |  | (20 | ) |  |  | (3,674 | )
Net deferred tax assets |  | $ | 17,378 |  |  | $ | 598 |
As of December 31, 2016, the Company had net operating loss carryforwards of $26.7 million in California and $31.8 million in foreign countries, which begin to expire in 2018. A total of $3.1 million of the California net operating loss carryforward and $1.3 million of the foreign net operating loss carryforward are related to excess tax benefits as a result of stock option exercises, and therefore will be recorded in additional paid-in capital in the period that they become realized. During the year ended December 31, 2016, the Company realized $0.2 million of excess tax benefits as a result of stock option exercises, therefore, $0.1 million was recorded to additional paid-in capital. As of December 31, 2016, the Company had available carryforward Federal and California R&D tax credits of $8.6 million and $7.8 million, respectively. Federal R&D tax credit carryforwards begin to expire in 2026. State R&D tax credits carryforward indefinitely. A total of $0.2 million of the state R&D tax credits are related to excess tax benefits as a result of stock option exercises, and therefore will be recorded to additional paid-in-capital in the period that they become realized. During the years ended December 31, 2016 and December 26, 2015, the change in valuation allowances was $(25.8) million and $1.6 million, respectively. The valuation allowance decrease in 2016 was primarily related to the release of a valuation allowance against a significant portion of the Company’s U.S. deferred tax assets, as well as valuation allowance release against a portion of our foreign deferred tax assets. The realization of deferred tax assets is primarily dependent on the Company generating sufficient U.S. and foreign taxable income in future fiscal years. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will not be realized. For the year ended December 31, 2016, the Company possessed enough positive evidence to determine that is was more-likely-than-not that the Company would utilize a significant portion of its deferred tax assets. Therefore, the Company released $27.4 million of valuation allowance. The Company continues to maintain valuation allowances against its California and certain foreign deferred tax assets as a result of uncertainties regarding the realization of the asset due to cumulative losses and uncertainty of future taxable income. The Company will continue to assess the realizability of the deferred tax assets in each of the applicable jurisdictions and maintain the valuation allowances until sufficient positive evidence exists to support a reversal. In the event the Company determines that the deferred tax assets are realizable, an adjustment to the valuation allowances will be reflected in the tax provision for the period such determination is made. Changes in tax laws and tax rates could affect the Company's recorded deferred tax assets and liabilities in the future. The Company's tax liabilities involve dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across its global operations. Management will account for any such changes or factors in the period in which such law changes are enacted. Differences between income taxes computed by applying the statutory federal income tax rate to income (loss) before income taxes and the provision (benefit) for income taxes consist of the following (in thousands):
|  | Years Ended |
|  | December 31, 2016 |  |  | December 26, 2015 |  |  | December 27, 2014 |
Income taxes computed at U.S. statutory rate |  | $ | 10,197 |  |  | $ | 1,949 |  |  | $ | (4,067 | )
State income taxes |  |  | 223 |  |  |  | 28 |  |  |  | (109 | )
Foreign tax rate differential |  |  | 3,502 |  |  |  | 342 |  |  |  | 777 |
Change in valuation allowance |  |  | (25,738 | ) |  |  | 1,648 |  |  |  | 23,894 |
Non-deductible Equity Compensation |  |  | 380 |  |  |  | 311 |  |  |  | 242 |
Tax credits |  |  | (3,191 | ) |  |  | (1,834 | ) |  |  | (2,187 | )
Domestic production activities deduction |  |  | (354 | ) |  |  | — |  |  |  | — |
Liabilities for uncertain tax positions |  |  | 67 |  |  |  | 74 |  |  |  | 118 |
Other, net |  |  | 14 |  |  |  | 145 |  |  |  | 829 |
Provision (benefit) for income taxes |  | $ | (14,900 | ) |  | $ | 2,663 |  |  | $ | 19,497 |
Certain amounts of the income tax rate reconciliation for the years ended December 27, 2014, were reclassified to other components within the reconciliation to be consistent with classification used for the year ended December 26, 2015 and the year ended December 31, 2016. There was no impact to the total provision (benefit) for income taxes based on these reclassifications. As of December 31, 2016, approximately $3.7 million of undistributed earnings from non-U.S. operations held by the Company's foreign subsidiaries are designated as indefinitely reinvested outside the U.S. Accordingly, no additional U.S. income taxes or additional foreign withholding taxes have been provided thereon. The amount of unrecognized deferred tax liability related to these earnings would be immaterial. The Company recognizes tax liabilities for uncertain tax positions and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. The accounting for uncertainty in income taxes recognized in an enterprise's financial statements prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return, and the derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
|  | Rollforward Table (at Gross): As of |
|  | December 31, 2016 |  |  | December 26, 2015 |  |  | December 27, 2014 |
Unrecognized tax benefits - beginning of the period |  | $ | 6,961 |  |  | $ | 6,442 |  |  | $ | 4,436 |
Gross increases-tax positions in prior period |  |  | 23 |  |  |  | 127 |  |  |  | 655 |
Gross decreases-tax positions in prior period |  |  | (1,193 | ) |  |  | (306 | ) |  |  | (123 | )
Gross increases-current-period tax positions |  |  | 686 |  |  |  | 698 |  |  |  | 1,541 |
Lapse of statute of limitations |  |  | — |  |  |  | — |  |  |  | (67 | )
Unrecognized tax benefits - end of the period |  | $ | 6,477 |  |  | $ | 6,961 |  |  | $ | 6,442 |
The unrecognized tax benefit at December 31, 2016 was $6.5 million, of which $3.7 million would impact the effective tax rate if recognized. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties and interest were not material as of December 31, 2016, December 26, 2015 and December 27, 2014. The Company does not expect a material change in its unrecognized tax benefits within the next 12 months. The Company is subject to taxation in the U.S. and various states including California, and foreign jurisdictions including Korea, Japan, Taiwan, and China. Due to tax attribute carry-forwards, the Company is subject to examination for tax years 2003 forward for U.S. tax purposes. The Company was also subject to examination in various states for tax years 2002 forward. The Company is subject to examination for tax years 2007 forward for various foreign jurisdictions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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