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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes: The components of income tax expense are as follows:
|  | Year Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |  |  | December 26, 2020 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 47,963 |  |  | $ | 21,791 |  |  | $ | 1,466 |
State |  |  | 987 |  |  |  | 1,007 |  |  |  | 371 |
Foreign |  |  | 2,901 |  |  |  | 3,153 |  |  |  | 5,637 |
|  |  | 51,851 |  |  |  | 25,951 |  |  |  | 7,474 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (31,622 | ) |  |  | (9,475 | ) |  |  | (10,355 | )
State |  |  | (1,506 | ) |  |  | (540 | ) |  |  | (1,036 | )
Foreign |  |  | (473 | ) |  |  | (2,603 | ) |  |  | (240 | )
|  |  | (33,601 | ) |  |  | (12,618 | ) |  |  | (11,631 | )
Total income tax expense (benefit) |  | $ | 18,250 |  |  | $ | 13,333 |  |  | $ | (4,157 | )
The income before tax is comprised of the following:
|  | Year Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |  |  | December 26, 2020 |
Domestic operations |  | $ | 239,527 |  |  | $ | 136,143 |  |  | $ | (120 | )
Foreign operations |  | $ | 2,057 |  |  | $ | 19,539 |  |  | $ | 26,988 |
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. federal income tax rate of 21% for the years ended December 31, 2022, January 1, 2022 and December 26, 2020, to income before provision for income taxes as follows:
|  | Year Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |  |  | December 26, 2020 |
Federal income tax provision at statutory rate |  | $ | 50,732 |  |  | $ | 32,693 |  |  | $ | 5,642 |
State taxes, net of federal effect |  |  | 467 |  |  |  | 1,066 |  |  |  | 126 |
Foreign taxes, net of federal effect |  |  | (481 | ) |  |  | (3,817 | ) |  |  | 596 |
Foreign Derived Intangible Income (“FDII”) Deduction |  |  | (25,445 | ) |  |  | (11,061 | ) |  |  | (4,262 | )
US tax on foreign source income |  |  | 1,423 |  |  |  | 1,721 |  |  |  | 2,013 |
Non-deductible officer's compensation |  |  | 1,910 |  |  |  | 689 |  |  |  | 213 |
Research and development tax credit |  |  | (7,146 | ) |  |  | (3,607 | ) |  |  | (4,858 | )
Tax impact of audit and statue closures |  |  | (1,526 | ) |  |  | (1,987 | ) |  |  | (2,905 | )
Impact of the CARES Act |  |  | — |  |  |  | (732 | ) |  |  | (1,141 | )
Other |  |  | (1,684 | ) |  |  | (1,632 | ) |  |  | (419 | )
Provision (benefit) for income taxes |  | $ | 18,250 |  |  | $ | 13,333 |  |  | $ | (4,157 | )
Effective tax rate |  |  | 8 | % |  |  | 9 | % |  |  | (16 | )%
Deferred tax assets and liabilities are comprised of the following:
|  | December 31, 2022 |  |  | January 1, 2022 |
Deferred tax assets: |  |  |  |  |  |
Reserves and accruals |  | $ | 17,231 |  |  | $ | 15,084 |
Deferred revenue |  |  | 3,512 |  |  |  | 4,729 |
Share-based compensation |  |  | 3,942 |  |  |  | 3,023 |
Tax credit carryforward |  |  | 12,197 |  |  |  | 10,339 |
Net operating losses |  |  | 1,643 |  |  |  | 3,254 |
Depreciation and amortization |  |  | 125 |  |  |  | 368 |
Operating lease liabilities |  |  | 4,162 |  |  |  | 3,575 |
Other |  |  | 4,044 |  |  |  | 2,364 |
Gross deferred tax assets |  |  | 46,856 |  |  |  | 42,736 |
Less: valuation allowance |  |  | (11,772 | ) |  |  | (10,948 | )
Total deferred tax assets after valuation allowance |  |  | 35,084 |  |  |  | 31,788 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciation and amortization |  |  | (32,693 | ) |  |  | (63,554 | )
Operating lease right of use assets |  |  | (4,890 | ) |  |  | (3,469 | )
Other |  |  | (89 | ) |  |  | (224 | )
Gross deferred tax liabilities |  |  | (37,672 | ) |  |  | (67,247 | )
Net deferred tax liabilities |  | $ | (2,588 | ) |  | $ | (35,459 | )
At December 31, 2022 and January 1, 2022, the Company had recorded valuation allowances of $11,772 and 10,948, respectively, on a certain portion of the Company’s deferred tax assets to reflect the deferred tax assets at the net amount that is more likely than not to be realized. The Company maintains a valuation allowance against a portion of its federal and foreign tax credit carryforwards and state net operating losses and research and development credits of $1,601 and $10,171, respectively. In assessing the realizability of deferred tax assets, the Company uses a more likely than not standard. If it is determined that it is more-likely-than-not that deferred tax assets will not be realized, a valuation allowance must be established against the deferred tax assets. The ultimate realization of the assets is dependent on the generation of future taxable income during the periods in which the associated temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income and tax planning strategies when making this assessment. In making the determination that it is more likely than not that the Company’s deferred tax assets will be realized as of December 31, 2022, the Company relied primarily on the reversal of deferred tax liabilities as well as projected future taxable income. At December 31, 2022, the Company had tax effected state and foreign net operating loss carryforwards of $1,168 and $475, respectively. The federal, state and foreign net operating loss carryforwards expire on various dates beginning in 2023 through 2037. At December 31, 2022, the Company had foreign tax credit carryforwards and state research & development credits of $1,601, and $14,797, respectively. The foreign tax credit carryforwards are set to expire at various dates beginning December 31, 2029. The state research & development credits have no expiration dates. As of December 31, 2022, the Company has provided U.S. income taxes on all its foreign earnings. The Company continues to permanently reinvest the cash held offshore to support its working capital needs. The Company has accrued $82 for additional foreign withholding taxes that may be required from its United Kingdom and China entities in the event of a cash distribution. The total amount of unrecognized tax benefits are as follows:
|  | Year Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |  |  | December 26, 2020 |
Balance, beginning of the period |  | $ | 12,373 |  |  | $ | 13,486 |  |  | $ | 15,143 |
Gross increases—tax positions in prior period |  |  | 456 |  |  |  | 156 |  |  |  | 347 |
Gross decreases—tax positions in prior period |  |  | — |  |  |  | (204 | ) |  |  | — |
Gross increases—current-period tax positions |  |  | 1,729 |  |  |  | 1,193 |  |  |  | 1,048 |
Closure of audit/statute limitation |  |  | (1,548 | ) |  |  | (2,258 | ) |  |  | (3,052 | )
Balance, end of the period |  | $ | 13,010 |  |  | $ | 12,373 |  |  | $ | 13,486 |
The unrecognized tax benefits at December 31, 2022 and January 1, 2022 were $13,010 and $12,373, respectively, of which $7,614 and $7,832, respectively, would be reflected as an adjustment to income tax expense if recognized. The year over year increase from 2021 to 2022 is primarily due to additional unrecognized tax benefits related to federal and state tax exposures, offset by expiring tax statues. It is reasonably possible that certain amounts of unrecognized tax benefits may reverse in the next 12 months; however, the Company does not expect such reversals to have a significant impact on its results of operations or financial position. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2022, January 1, 2022 and December 26, 2020, the Company recognized approximately $149, $(814) and $(193), respectively, in interest and penalties (benefit) expense associated with uncertain tax positions. As of December 31, 2022 and January 1, 2022, the Company had accrued interest and penalties expense included in the table of unrecognized tax benefits of $628 and $430, respectively. The Company is subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. The Company is subject to ordinary statute of limitation rules of three and four years for federal and state returns, respectively. However, due to tax attribute carryforwards, the Company is subject to examination for tax years 2012 forward for U.S. federal tax purposes with respect to carryforward amounts. The Company is also subject to examination in various states for tax years 2003 forward with respect to carryforward amounts. The Company is subject to examination for tax years 2014 forward for various foreign jurisdictions. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from any future examinations of these years. In the normal course of business, the Company is subject to tax audits in various jurisdictions, and such jurisdictions may assess additional income taxes or other taxes against it. Although the Company believes its tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from the Company’s historical income tax provisions and accruals. The results of an audit or litigation could have a material adverse effect on the Company’s results of operations or cash flows in the period or periods for which that determination is made.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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