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Income Taxes | 12 Months Ended
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Mar. 25, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes include the following:
|  |  |  |  | Fiscal Year Ended
|  |  |  |  | March 25, 2022 |  | March 26, 2021 |  | March 27, 2020
Income before provision for income taxes attributable to: |  |  |  |  |  |  |  |  |
Domestic operations |  |  |  |  | $ | 121,883 |  |  | $ | (2,288) |  |  | $ | 34,425 |
Foreign operations |  |  |  |  | 18,863 |  |  | 837 |  |  | 18,853 |
Total |  |  |  |  | $ | 140,746 |  |  | $ | (1,451) |  |  | $ | 53,278 |
Significant components of the provision (benefit) for income taxes are as follows:
|  |  |  |  | Fiscal Year Ended
|  |  |  |  | March 25, 2022 |  | March 26, 2021 |  | March 27, 2020
Current: |  |  |  |  |  |  |  |  |
Federal |  |  |  |  | $ | 7,779 |  |  | $ | (3,821) |  |  | $ | 15,146 |
State |  |  |  |  | 1,553 |  |  | 1,085 |  |  | 1,468 |
Foreign |  |  |  |  | 4,361 |  |  | 2,115 |  |  | 4,468 |
Total current |  |  |  |  | 13,693 |  |  | (621) |  |  | 21,082 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  |  |  | 7,892 |  |  | (17,564) |  |  | (4,431) |
State |  |  |  |  | 371 |  |  | (1,016) |  |  | 18 |
Foreign |  |  |  |  | (765) |  |  | (351) |  |  | (496) |
Total deferred |  |  |  |  | 7,498 |  |  | (18,931) |  |  | (4,909) |
Total income tax provision |  |  |  |  | $ | 21,191 |  |  | $ | (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 25, 2022 |  | March 26, 2021 |  | March 27, 2020
Tax provision at U.S. statutory rate |  |  |  |  | $ | 29,557 |  |  | $ | (305) |  |  | $ | 11,189 |
162(m) limitation |  |  |  |  | 3,988 |  |  | — |  |  | — |
Stock based compensation |  |  |  |  | (230) |  |  | (13,303) |  |  | — |
CARES carryback claim and amended returns |  |  |  |  | (2,031) |  |  | (3,834) |  |  | — |
PSL Divestiture |  |  |  |  | — |  |  | (2,009) |  |  | — |
Research and development tax credit |  |  |  |  | (2,823) |  |  | (2,162) |  |  | (1,841) |
FDII |  |  |  |  | (9,066) |  |  | — |  |  | (1,188) |
BEAT |  |  |  |  | — |  |  | — |  |  | 1,694 |
GILTI |  |  |  |  | — |  |  | — |  |  | 86 |
Transaction costs |  |  |  |  | 307 |  |  | 1,498 |  |  | — |
Foreign tax rate |  |  |  |  | (157) |  |  | 1,279 |  |  | 283 |
State income taxes, net of federal benefit |  |  |  |  | 2,370 |  |  | 356 |  |  | 514 |
Deferred tax remeasurement |  |  |  |  | — |  |  | 309 |  |  | — |
Subpart F income, net of credits |  |  |  |  | 283 |  |  | 43 |  |  | — |
Provision for uncertain tax positions |  |  |  |  | (17) |  |  | 26 |  |  | 361 |
Provision for IRS audit settlement |  |  |  |  | — |  |  | — |  |  | 5,491 |
Gain on contingent purchase price reduction |  |  |  |  | (420) |  |  | (525) |  |  | — |
Cumulative provision-to-return |  |  |  |  | (590) |  |  | (862) |  |  | (186) |
Other |  |  |  |  | 20 |  |  | (63) |  |  | (230) |
Total income tax provision |  |  |  |  | $ | 21,191 |  |  | $ | (19,552) |  |  | $ | 16,173 |
The increase in income tax expense in fiscal year 2022 as compared to fiscal year 2021 relates primary to tax impacts of the fiscal year 2021 IPO transaction. The fiscal year 2021 IPO transaction resulted in excess tax over financial reporting deductions related to a $40,440 stock-based compensation charge (and the related incremental tax deductions), a $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. NOL for fiscal year 2021 that will be carried back five years. Additional fluctuations in our effective income tax rate relate primarily to differences in our U.S. and foreign taxable income, estimated FDII benefits, GILTI income, research credits, non-deductible stock-based compensation charges, and discrete tax items. Except for AMTC prior to its sale, 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 25, 2022 |  | March 26, 2021
Deferred income tax assets: |  |  |  |  |  |  |
Net operating loss |  |  |  |  | $ | 2,106 |  |  | $ | 11,054 |
Bonuses, commissions and other compensation |  |  |  |  | 11,137 |  |  | 9,304 |
Tax credits |  |  |  |  | 6,454 |  |  | 8,698 |
Inventory and sales related |  |  |  |  | 5,892 |  |  | 6,304 |
Stock-based compensation |  |  |  |  | 2,837 |  |  | 821 |
Right-of-use liability |  |  |  |  | 2,221 |  |  | — |
Other accruals and reserves |  |  |  |  | 2,067 |  |  | 2,050 |
Gross deferred income tax assets |  |  |  |  | 32,714 |  |  | 38,231 |
Valuation allowance for deferred income tax assets |  |  |  |  | (5,070) |  |  | (5,025) |
Total deferred income tax assets |  |  |  |  | 27,644 |  |  | 33,206 |
Deferred income tax liabilities: |  |  |  |  |  |  |
Fixed assets and intangibles |  |  |  |  | (4,720) |  |  | (4,366) |
Equity method and other investments |  |  |  |  | (2,801) |  |  | (1,868) |
Right-of-use asset |  |  |  |  | (2,156) |  |  | — |
Total deferred income tax liabilities |  |  |  |  | (9,677) |  |  | (6,234) |
Net deferred income tax assets |  |  |  |  | $ | 17,967 |  |  | $ | 26,972 |
As of March 25, 2022, the Company has $2,106 in NOLs related to our Thailand operations. Additionally, the Company has $3,490 and $2,964 in research credits related to its French subsidiary and state filings, respectively. 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 Thailand NOLs of $2,106 and state research credits of $2,964 because such assets will not to be utilized by the Company prior to expiration. The Company is completing carryback claim filings allowable under the CARES Act to utilize NOLs and carryover credits generated during fiscal year 2021. The filings will carryback $8,364 in Federal NOLs, $2,631 in U.S. research credits, and $305 in foreign tax credits to prior taxable periods. These amounts, along with an estimated rate benefit of $4,463 have all been classified as a long-term tax receivable as of March 25, 2022. Uncertain Tax Positions A s of March 25, 2022, the Compan y had $2,459 of gross unrecognized tax benefits, of which $2,433 would im pact the effective tax rate, if recognized. As 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 recognize d. 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 25, 2022 |  | March 26, 2021 |  | March 27, 2020
Beginning balance |  |  |  |  | $ | 2,554 |  |  | $ | 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 |  |  |  |  | (95) |  |  | (60) |  |  | (55) |
Balance at end of period |  |  |  |  | $ | 2,459 |  |  | $ | 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 of $58, $73 and $841 in interest, penalties and releases during fiscal years 2022, 2021 and 2020, respectively. As of March 25, 2022 and March 26, 2021, the amount of accrued interest and penalties totaled approximately $324 and $232, 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=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 http://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 http://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 http://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 http://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 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 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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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