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Income Taxes | 12 Months Ended
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Dec. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Note 13. 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 30, 2017 |  |  | December 31, 2016 |  |  | December 26, 2015 |
Domestic |  | $ | 34,238 |  |  | $ | 25,372 |  |  | $ | 178 |
Foreign |  |  | 9,060 |  |  |  | 3,763 |  |  |  | 5,390 |
Income (loss) before income taxes |  | $ | 43,298 |  |  | $ | 29,135 |  |  | $ | 5,568 |
The provision (benefit) for income taxes consists of the following (in thousands):
|  | Years Ended |
|  | December 30, 2017 |  |  | December 31, 2016 |  |  | December 26, 2015 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,250 |  |  | $ | 697 |  |  | $ | 148 |
State |  |  | 9 |  |  |  | 85 |  |  |  | 3 |
Foreign |  |  | 2,998 |  |  |  | 2,111 |  |  |  | 2,266 |
|  |  | 6,257 |  |  |  | 2,893 |  |  |  | 2,417 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 6,314 |  |  |  | (16,641 | ) |  |  | 190 |
State |  |  | 53 |  |  |  | (320 | ) |  |  | 3 |
Foreign |  |  | 472 |  |  |  | (832 | ) |  |  | 53 |
|  |  | 6,839 |  |  |  | (17,793 | ) |  |  | 246 |
Provision (benefit) for income taxes |  | $ | 13,096 |  |  | $ | (14,900 | ) |  | $ | 2,663 |
Significant components of the Company's deferred tax assets and liabilities are as follows (in thousands):
|  | At |
|  | December 30, 2017 |  |  | December 31, 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Reserves and accruals |  | $ | 5,797 |  |  | $ | 11,043 |
Deferred revenue |  |  | 240 |  |  |  | 349 |
Shared based compensation |  |  | 1,483 |  |  |  | 2,590 |
Tax credit carry-forwards |  |  | 9,669 |  |  |  | 10,112 |
Net operating losses |  |  | 9,755 |  |  |  | 8,434 |
Depreciation & amortization |  |  | (1,525 | ) |  |  | (2,898 | )
Other |  |  | 207 |  |  |  | (1,252 | )
Total deferred tax assets |  |  | 25,626 |  |  |  | 28,378 |
Less: Valuation allowance |  |  | (13,702 | ) |  |  | (10,980 | )
Total deferred tax assets net of valuation allowance |  |  | 11,924 |  |  |  | 17,398 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation & amortization |  |  | (12 | ) |  |  | (6 | )
Other |  |  | (167 | ) |  |  | (14 | )
Total deferred tax liabilities |  |  | (179 | ) |  |  | (20 | )
Net deferred tax assets |  | $ | 11,745 |  |  | $ | 17,378 |
As of December 30, 2017, the Company had net operating loss carryforwards of $25.6 million in California, $3.0 million in other states, and $35.0 million in foreign countries, which begin to expire in 2018. As of December 30, 2017, the Company had available carryforward Federal and California R&D tax credits of $7.0 million and $8.9 million, respectively. Federal R&D tax credit carryforwards begin to expire in 2032. State R&D tax credits carryforward indefinitely. During the years ended December 30, 2017, and December 31, 2016, the change in valuation allowances was $1.5 million and $(25.8) million, respectively. The valuation allowance increase in 2017 was primarily related to the increase net benefit of the California deferred tax assets from lower federal rates, offset by a valuation allowance release against a portion of the Company’s 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 30, 2017, 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 Singapore deferred tax assets. Therefore, the Company released $0.3 million of valuation allowance in that jurisdiction. 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. On December 22, 2017, H.R.1, formerly known as the Tax Cuts and Jobs Act (“The Act”), was signed into law. Among other items, H.R.1 reduces the federal corporate tax rate from 35% to 21% effective January 1, 2018. As a result, the Company revalued its net deferred tax asset to the lower enacted rate. The Company's net deferred tax asset represents differences between the carrying amounts and tax bases of assets and liabilities carried on the Company's balance sheet. In addition to the revaluation of deferred tax assets and liabilities in reflecting the lower tax rates, the Act also imposes a deemed repatriation tax on the Company’s total post-1986 deferred foreign income. During the year ended December 30, 2017, the company recognized $0.6 million as a provisional estimate for income taxes under the U.S. Securities and Exchange Commission Accounting Bulletin No. 118. The provisional estimate is subject to revisions as we complete our analysis of the Act, collect and prepare necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, Internal Revenue Service (“IRS”), FASB, and other standard-setting and regulatory bodies. Our accounting for the tax effects of the Act will be completed during the measurement period, which should not extend beyond one year from the enactment date. 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 30, 2017 |  |  | December 31, 2016 |  |  | December 26, 2015 |
Income taxes computed at U.S. statutory rate |  | $ | 15,153 |  |  | $ | 10,197 |  |  | $ | 1,949 |
State income taxes |  |  | 227 |  |  |  | 223 |  |  |  | 28 |
Foreign tax rate differential |  |  | 794 |  |  |  | 3,502 |  |  |  | 342 |
Change in valuation allowance |  |  | 1,490 |  |  |  | (25,738 | ) |  |  | 1,648 |
Equity compensation |  |  | (1,803 | ) |  |  | 380 |  |  |  | 311 |
Tax credits |  |  | (2,336 | ) |  |  | (3,191 | ) |  |  | (1,834 | )
Domestic production activities deduction |  |  | (608 | ) |  |  | (354 | ) |  |  | — |
Liabilities for uncertain tax positions |  |  | 18 |  |  |  | 67 |  |  |  | 74 |
Other, net |  |  | 161 |  |  |  | 14 |  |  |  | 145 |
Provision (benefit) for income taxes |  | $ | 13,096 |  |  | $ | (14,900 | ) |  | $ | 2,663 |
As of December 30, 2017, The Company has provided U.S income taxes on all its foreign earnings. The Company still continues to permanently reinvest the cash held offshore to support its working capital needs. Accordingly, no additional foreign withholding taxes that may be required from certain jurisdictions in the event of a cash distribution have been provided thereon. 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 30, 2017 |  |  | December 31, 2016 |  |  | December 26, 2015 |
Unrecognized tax benefits - beginning of the period |  | $ | 6,477 |  |  | $ | 6,961 |  |  | $ | 6,442 |
Gross increases-tax positions in prior period |  |  | 32 |  |  |  | 23 |  |  |  | 127 |
Gross decreases-tax positions in prior period |  |  | — |  |  |  | (1,193 | ) |  |  | (306 | )
Gross increases-current-period tax positions |  |  | 723 |  |  |  | 686 |  |  |  | 698 |
Lapse of statute of limitations |  |  | (81 | ) |  |  | — |  |  |  | — |
Unrecognized tax benefits - end of the period |  | $ | 7,151 |  |  | $ | 6,477 |  |  | $ | 6,961 |
The unrecognized tax benefit at December 30, 2017, was $7.2 million, of which $4.0 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 30, 2017, December 31, 2016, and December 26, 2015. 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 2009 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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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