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Income Taxes
 12 Months Ended
Mar. 28, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
19.
Income Taxes

The components of (loss) income before income taxes include the following:

 

 

Fiscal Year Ended

 

 

March 28,
2025

 

 

March 29,
2024

 

 

March 31,
2023

 

(Loss) income before income taxes

 

 

 

 

 

 

 

 

 

Domestic operations

 

$

(106,576

)

 

$

183,524

 

 

$

190,107

 

Foreign operations

 

 

20,880

 

 

 

11,273

 

 

 

21,239

 

Total

 

$

(85,696

)

 

$

194,797

 

 

$

211,346

 

 

Significant components of the income tax (benefit) provision are as follows:

 

 

Fiscal Year Ended

 

 

March 28,
2025

 

 

March 29,
2024

 

 

March 31,
2023

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

(2,047

)

 

$

16,086

 

 

$

53,973

 

State

 

 

325

 

 

 

1,319

 

 

 

472

 

Foreign

 

 

5,090

 

 

 

43,117

 

 

 

9,523

 

Total current

 

 

3,368

 

 

 

60,522

 

 

 

63,968

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

(15,272

)

 

 

10,721

 

 

 

(36,276

)

State

 

 

(231

)

 

 

(131

)

 

 

310

 

Foreign

 

 

(798

)

 

 

(29,203

)

 

 

(4,150

)

Total deferred

 

 

(16,301

)

 

 

(18,613

)

 

 

(40,116

)

Total income tax (benefit) provision

 

$

(12,933

)

 

$

41,909

 

 

$

23,852

 

The difference between the income tax (benefit) provision at the statutory federal tax rate and the (benefit) provision for income taxes is as follows:

 

 

Fiscal Year Ended

 

 

March 28,
2025

 

 

March 29,
2024

 

 

March 31,
2023

 

Tax (benefit) provision at U.S. statutory rate

 

$

(17,996

)

 

$

40,907

 

 

$

44,383

 

State income taxes, net of federal benefit

 

 

266

 

 

 

1,106

 

 

 

1,027

 

Foreign derived intangible income

 

 

(2,037

)

 

 

(25,612

)

 

 

(25,391

)

Research and development tax credit

 

 

(3,644

)

 

 

(6,188

)

 

 

(3,641

)

Stock-based compensation

 

 

2,094

 

 

 

(956

)

 

 

(1,025

)

Cumulative provision-to-return

 

 

(2,035

)

 

 

(1,147

)

 

 

(914

)

Gain on contingent purchase price reduction

 

 

—

 

 

 

—

 

 

 

(588

)

Subpart F and GILTI, net of credits

 

 

640

 

 

 

(168

)

 

 

(307

)

Provision for uncertain tax positions

 

 

(586

)

 

 

827

 

 

 

(81

)

162(m) limitation

 

 

3,542

 

 

 

3,010

 

 

 

8,931

 

Foreign tax rate

 

 

(235

)

 

 

2,632

 

 

 

954

 

Deferred tax remeasurement

 

 

—

 

 

 

—

 

 

 

651

 

Transaction costs

 

 

91

 

 

 

1,848

 

 

 

338

 

BEAT alternative minimum tax

 

 

1,454

 

 

 

—

 

 

 

—

 

Entity restructuring

 

 

(1,188

)

 

 

25,921

 

 

 

—

 

Nondeductible - loss on forward repurchase contract

 

 

7,298

 

 

 

—

 

 

 

—

 

Refund interest and other

 

 

(597

)

 

 

(271

)

 

 

(485

)

Total income tax (benefit) provision

 

$

(12,933

)

 

$

41,909

 

 

$

23,852

 

 

Entity restructurings are the net tax effect of transactions undertaken to streamline business operations, including the termination of a related party distributor and worthless stock deductions for our photonics subsidiaries, which fully ceased operating during the fiscal year. The March 29, 2024 entity restructuring relates to post-acquisition integrations to align business operations and integrate Crocus’s assets and workforce into the Company’s existing affiliates. The Company engaged in an intra-entity asset sale that resulted in a taxable gain reduced by net operating losses (“NOL”) in France and the generation and utilization of foreign tax credits in the U.S. Assets were transferred at fair market value pursuant to a valuation. The entity restructuring increased the effective tax rate primarily because a deferred tax liability was established on the difference between the fair market value and book value of Crocus’s intellectual property transferred to the U.S.

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 28,
2025

 

 

March 29,
2024

 

Deferred income tax assets:

 

 

 

 

 

 

Capitalized research and development costs

 

$

87,759

 

 

$

62,651

 

Accrued bonuses, sales commissions and other compensation

 

 

6,502

 

 

 

9,407

 

Inventory and sales related

 

 

15,629

 

 

 

16,766

 

Stock-based compensation

 

 

3,780

 

 

 

4,544

 

Tax credits

 

 

3,154

 

 

 

3,290

 

Lease liabilities

 

 

2,442

 

 

 

2,388

 

Property, plant and equipment, net

 

 

1,918

 

 

 

157

 

Other accruals and reserves

 

 

3,753

 

 

 

2,653

 

NOL carryforwards

 

 

5,255

 

 

 

8,589

 

Gross deferred income tax assets

 

 

130,192

 

 

 

110,445

 

Valuation allowance for deferred income tax assets

 

 

(4,250

)

 

 

(3,160

)

Total deferred income tax assets

 

 

125,942

 

 

 

107,285

 

Deferred income tax liabilities:

 

 

 

 

 

 

Equity method and other investments

 

 

(641

)

 

 

(1,782

)

Intangibles assets, net

 

 

(42,623

)

 

 

(48,875

)

Property, plant and equipment, net

 

 

(12,108

)

 

 

—

 

Right-of-use assets

 

 

(2,042

)

 

 

(2,132

)

Total deferred income tax liabilities

 

 

(57,414

)

 

 

(52,789

)

Net deferred income tax assets

 

$

68,528

 

 

$

54,496

 

 

Pursuant to the 2017 Tax Cuts and Jobs Act, U.S. tax law requires taxpayers to capitalize and amortize domestic and foreign research and development expenditures over five and 15 years, respectively (“174 Capitalization”). The impact of 174 Capitalization to our deferred tax assets is $87,759.

As of March 29, 2024, as part of the Crocus acquisition, the Company acquired NOL and research and development tax credit (“R&D Credit”) carryforwards. The Internal Revenue Code of 1986, as amended (“IRC”), provides for a limitation of the annual use of NOLs, R&D Credits, and other tax attributes following certain ownership changes that limit the ability to utilize NOL and R&D Credit carryforwards. Under IRC Sections 382 and 383, an ownership change is generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period. Crocus had multiple ownership changes and based on the existing Section 382 and 383 limitations its attributes are also subject to valuation allowances.

NOLs and capital losses may be available to reduce future taxable income. As of March 28, 2025, the Company had net Federal NOLs of $3,798 that were generated after December 31, 2017 and therefore carryforward indefinitely. As of March 28, 2025, the Company had utilized any available net state NOL carryforwards. As of March 28, 2025, the Company had net capital losses of $1,457, which are offset by a full valuation allowance.

As of March 28, 2025, the Company had net state R&D Credit carryforwards available to reduce future taxable income by $3,153. A valuation allowance has been established for $2,793 against such R&D Credits.

The Company’s intent is to permanently reinvest and use its existing foreign cash to fund its subsidiaries’ working capital needs, short-term and long-term capital projects, and to make investments and acquisitions. It is impracticable for the Company to determine the amount of the unrecognized tax liability due to the notional assumptions required and the complexities associated with these hypothetical calculations. No deferred tax liability has been established with respect to unremitted earnings and outside basis difference in its foreign subsidiaries.

The Company filed carryback claims allowable under the Coronavirus Aid, Relief and Economic Security Act (“the CARES Act”) to utilize NOLs and carryover credits generated during fiscal year 2021. As of March 28, 2025, the Company has an outstanding receivable of $11,812 related to these filings that are classified as a long-term tax receivable on the consolidated balance sheet.

Uncertain Tax Positions

As of March 28, 2025, March 29, 2024 and March 31, 2023, the Company had gross uncertain tax positions which would impact the effective tax rate, if recognized. These amounts are recorded as a long-term liability, as the Company does not anticipate payment within one year.

 

 

Fiscal Year Ended

 

 

March 28,
2025

 

 

March 29,
2024

 

 

March 31,
2023

 

Beginning balance

 

$

4,980

 

 

$

2,408

 

 

$

2,459

 

Gross increases - tax positions for prior periods

 

 

—

 

 

 

2,210

 

 

 

—

 

Gross increases - tax positions for current period

 

 

149

 

 

 

378

 

 

 

—

 

Gross decreases lapse of applicable statutes of limitations

 

 

(332

)

 

 

(16

)

 

 

(51

)

Ending balance

 

$

4,797

 

 

$

4,980

 

 

$

2,408

 

 

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 (benefit) provision in the consolidated statements of operations. The Company recorded net increases of $323, $826 and $39 in interest, penalties and releases during fiscal years 2025, 2024 and 2023, respectively. As of March 28, 2025 and March 29, 2024, the amount of accrued interest and penalties totaled approximately $1,230 and $906, respectively.

Examinations by Tax Authorities

The Company and its subsidiaries are routinely subject to examination by taxing authorities in the United States and the foreign jurisdictions in which it does business. Currently, the Internal Revenue Service is auditing the CARES Act carryback claim for fiscal year 2016 through 2021, and the Bureau of Internal Revenue is auditing our Philippine subsidiary for tax year 2019. U.S. and material foreign jurisdictions statutes of limitation remain open as of 2016.