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Income Taxes | 12 Months Ended
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Mar. 26, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes include the following:
|  |  |  |  | Fiscal Year Ended
|  |  |  |  | March 26, 2021 |  | March 27, 2020 |  |
Income before provision for incomes attributable to: |  |  |  |  |  |  |  |  |
Domestic operations |  |  |  |  | $ | (2,288) |  |  | $ | 34,425 |  |  |
Foreign operations |  |  |  |  | 837 |  |  | 18,853 |  |  |
Total |  |  |  |  | $ | (1,451) |  |  | $ | 53,278 |  |  |
Significant components of the provision (benefit) for income tax are as follows:
|  |  |  |  | Fiscal Year Ended
|  |  |  |  | March 26, 2021 |  | March 27, 2020 |  |
Current: |  |  |  |  |  |  |  |  |
Federal |  |  |  |  | $ | (3,821) |  |  | $ | 15,146 |  |  |
State |  |  |  |  | 1,085 |  |  | 1,468 |  |  |
Foreign |  |  |  |  | 2,115 |  |  | 4,468 |  |  |
Total current |  |  |  |  | (621) |  |  | 21,082 |  |  |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  |  |  | (17,564) |  |  | (4,431) |  |  |
State |  |  |  |  | (1,016) |  |  | 18 |  |  |
Foreign |  |  |  |  | (351) |  |  | (496) |  |  |
Total deferred |  |  |  |  | (18,931) |  |  | (4,909) |  |  |
Total income tax provision |  |  |  |  | $ | (19,552) |  |  | $ | 16,173 |  |  |
The difference between the tax provision at the statutory federal tax rate and the provision for income taxes is as follows:
|  |  |  |  | Fiscal Year Ended
|  |  |  |  | March 26, 2021 |  | March 27, 2020 |  |
Tax provision at U.S. statutory rate |  |  |  |  | $ | (305) |  |  | $ | 11,189 |  |  |
Stock based compensation |  |  |  |  | (13,303) |  |  | — |  |  |
CARES carryback claim and amended returns |  |  |  |  | (3,834) |  |  | — |  |  |
PSL Divestiture |  |  |  |  | (2,009) |  |  | — |  |  |
Research and development tax credit |  |  |  |  | (2,162) |  |  | (1,841) |  |  |
FDII |  |  |  |  | — |  |  | (1,188) |  |  |
BEAT |  |  |  |  | — |  |  | 1,694 |  |  |
GILTI |  |  |  |  | — |  |  | 86 |  |  |
Transaction costs |  |  |  |  | 1,498 |  |  | — |  |  |
Foreign tax rate |  |  |  |  | 1,279 |  |  | 283 |  |  |
State income taxes, net of federal benefit |  |  |  |  | 356 |  |  | 514 |  |  |
Deferred tax remeasurement |  |  |  |  | 309 |  |  | — |  |  |
Subpart F income, net of credits |  |  |  |  | 43 |  |  | — |  |  |
Provision for uncertain tax positions |  |  |  |  | 26 |  |  | 361 |  |  |
Provision for IRS audit settlement |  |  |  |  | — |  |  | 5,491 |  |  |
Transition tax |  |  |  |  | — |  |  | — |  |  |
Gain on contingent purchase price reduction |  |  |  |  | (525) |  |  | — |  |  |
Cumulative provision-to-return |  |  |  |  | (862) |  |  | (186) |  |  |
Other |  |  |  |  | (63) |  |  | (230) |  |  |
Total income tax provision |  |  |  |  | $ | (19,552) |  |  | $ | 16,173 |  |  |
The decrease in income tax expense was primarily attributable to excess tax over financial reporting deductions related to the following IPO transaction: the $40,440 stock-based compensation charge (and the related incremental tax deductions), the $16,000 one-time dividend treated as compensation expense for tax purposes, and the tax loss on the divestiture of PSL. The tax impacts of these transactions and other discrete transactions caused an overall U.S. loss (“NOL”) that will be carried back to five years. On December 22, 2017 the TCJA legislation was enacted. The TCJA significantly changed U.S. tax law by lowering the U.S. corporate income tax rate to 21%, implementing a territorial tax system, imposing a one-time tax on deemed repatriated earnings of foreign subsidiaries (“Transition Tax”), generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries, providing a benefit for Foreign Derived Intangible Income (“FDII”), increasing U.S. taxable income to include all income earned by foreign subsidiaries in excess of ten percent of the fixed assets in those entities which is defined as Global Intangible Low-taxed Income (“GILTI”), providing a minimum tax on “base erosion payments” (“BEAT”), limiting interest expense deduction, and allowing companies to elect to expense qualified asset purchases. The TCJA’s annual impact on our tax provision are detailed in the table above. Except for AMTC, the Company has the ability and intent to permanently reinvest its foreign earnings based on expected future U.S. cash flows and specific and measurable plans to use its existing foreign cash to fund its working capital needs, invest in short-term and long-term capital projects, and to make investments and acquisitions. Since AMTC’s operations have ceased, the Company may receive future liquidating distributions; however, such distributions are estimated to result in no material incremental U.S. or local tax. Therefore, no deferred tax liability has been established with respect to outside basis difference in its foreign subsidiaries. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  |  |  |  | March 26, 2021 |  | March 27, 2020
Deferred income tax assets: |  |  |  |  |  |  |
Net operating loss |  |  |  |  | $ | 11,054 |  |  | $ | 2,037 |
Bonuses, commissions and other compensation |  |  |  |  | 9,304 |  |  | 8,793 |
Tax credits |  |  |  |  | 8,698 |  |  | 6,600 |
Inventory and sales related |  |  |  |  | 6,304 |  |  | 6,696 |
Stock-based compensation |  |  |  |  | 821 |  |  | — |
Capitalized transaction costs |  |  |  |  | — |  |  | 259 |
Other accruals and reserves |  |  |  |  | 2,050 |  |  | 1,879 |
Gross deferred income tax assets |  |  |  |  | 38,231 |  |  | 26,264 |
Valuation allowance for deferred income tax assets |  |  |  |  | (5,025) |  |  | (4,206) |
Total deferred income tax assets |  |  |  |  | 33,206 |  |  | 22,058 |
Deferred income tax liabilities: |  |  |  |  |  |  |
Fixed assets and intangibles |  |  |  |  | (4,366) |  |  | (14,162) |
Equity method investment in PSL |  |  |  |  | (1,868) |  |  | — |
Stock-based compensation |  |  |  |  | — |  |  | (679) |
Total deferred income tax liabilities |  |  |  |  | (6,234) |  |  | (14,841) |
Net deferred income tax assets |  |  |  |  | $ | 26,972 |  |  | $ | 7,217 |
As of March 26, 2021, the Company has $8,185 of federal NOLs that can be carried back five years under the CARES Act to reduce prior year taxes. Additionally, the Company has state NOLs of $550, U.S. research credit carryovers of $2,162 and foreign tax credit carryovers of $232, and its French subsidiary has $3,598 of refundable research credits. In assessing the realizability of its deferred tax assets, the Company considered whether it was more likely than not that some portion or all of the deferred tax assets would not be realized. The realization of deferred tax assets depends upon the generation of future taxable income during the periods in which these temporary differences become deductible. The Company established a valuation allowance for its AMTC NOLs of $2,319 and state research credits of $2,706 because such assets will not to be utilized by the Company prior to expiration. The Company operates under tax holiday in Thailand, which is effective through fiscal year 2024, and may be extended if certain additional requirements are satisfied. The tax holidays are conditional upon the Company meeting certain production thresholds. The impact of this tax holiday does not have a material impact on net income. Uncertain Tax Positions A s of March 26, 2021, the Company had $2,554 of gross unrecognized tax benefits, of which $2,542 would impact the effective tax rate, if recognized. As of March 27, 2020, the Company had $2,559 of gross unrecognized tax benefits, of which $2,501 would impact the effective tax rate, if recognized.
|  |  |  |  | Fiscal Year Ended
|  |  |  |  | March 26, 2021 |  | March 27, 2020 |  |
Beginning balance |  |  |  |  | $ | 2,559 |  |  | $ | 6,264 |  |  |
Gross increases-tax positions in prior period |  |  |  |  | 55 |  |  | 4,863 |  |  |
Gross decreases-tax positions in prior period settlement |  |  |  |  | — |  |  | (8,513) |  |  |
Lapse in statute of limitations |  |  |  |  | (60) |  |  | (55) |  |  |
Balance at end of period |  |  |  |  | $ | 2,554 |  |  | $ | 2,559 |  |  |
The Company classifies uncertain tax positions as a current liability, or as a reduction of the amount of a net operating loss carryforward or amount refundable, to the extent that the Company anticipates payment or receipt of cash for income taxes within one year. Likewise, the amount is classified as a long-term liability if the Company anticipates payment or receipt of cash for income taxes during a period beyond one year. The Company believes that all tax positions are adequately provided for; amounts asserted by tax authorities could be greater or less than the accrued position. Accordingly, the Company’s provisions for federal, state and foreign tax related matters to be recorded in the future might change as revised estimates are made, or the underlying matters are settled or otherwise resolved. The Company’s policy is to classify interest expense and penalties, if any, as components of the income tax provision in the consolidated statements of operations. The Company recorded net increases $73 and $841 in interest and penalties during fiscal years 2021 and 2020, respectively. As of March 26, 2021 and March 27, 2020, the amount of accrued interest and penalties totaled approximately $232 and $354, respectively. Examinations by Tax Authorities The Company, through its subsidiaries, is subject to examination by taxing authorities in the United States, the Philippines, United Kingdom, Thailand, and the states in which the Company does business. The statute of limitations remains open for U.S. federal tax returns for 2017 and the following years. Audit activities related to the U.S. federal tax returns for 2016 and 2017 concluded during fiscal year 2020 resulting in a settlement related to transfer pricing for fiscal years 2016, 2017 and 2018 in the amount of $9,482 including interest. In non-U.S. jurisdictions, the years open to audit represent the years still open under the respective statute of limitations. With respect to the major jurisdictions outside the U.S., the subsidiaries are no longer subject to income tax audits for years before 2014. Capital Contribution In connection with the settlement noted above, Sanken, agreed to make a one-time capital contribution in the amount of $9,500 to neutralize the cash impact to the Company. All ownership parties have agreed that this contribution would not result in an incremental ownership percentage change or increase in shares by Sanken.

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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