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Income Taxes | 12 Months Ended
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Dec. 28, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before provision for income taxes are as follows:
(In thousands) |  | December 28, 2024 |  | December 30, 2023 |  | December 31, 2022
Domestic |  | $ | 51,417 |  |  | $ | 57,810 |  |  | $ | 46,558 |
Foreign |  | 101,653 |  |  | 101,206 |  |  | 119,078 |
|  | $ | 153,070 |  |  | $ | 159,016 |  |  | $ | 165,636 |
The components of the provision for income taxes are as follows:
(In thousands) |  | December 28, 2024 |  | December 30, 2023 |  | December 31, 2022
Current Provision: |  |  |  |  |  |
Federal |  | $ | 7,051 |  |  | $ | 12,402 |  |  | $ | 8,738 |
Foreign |  | 29,414 |  |  | 28,587 |  |  | 26,032 |
State |  | 2,819 |  |  | 3,170 |  |  | 1,977 |
|  | 39,284 |  |  | 44,159 |  |  | 36,747 |
Deferred Provision (Benefit): |  |  |  |  |  |
Federal |  | 2,094 |  |  | 48 |  |  | 1,970 |
Foreign |  | (1,222) |  |  | (2,594) |  |  | 4,233 |
State |  | 360 |  |  | 597 |  |  | 956 |
|  | 1,232 |  |  | (1,949) |  |  | 7,159 |
|  | $ | 40,516 |  |  | $ | 42,210 |  |  | $ | 43,906 |
The Company receives a tax deduction upon the vesting of RSUs. The Company recognizes excess income tax benefits and tax deficiencies related to stock-based compensation arrangements as discrete items within the provision for income taxes in the reporting period in which they occur. The Company recognized an income tax benefit of $523,000 in 2024, $354,000 in 2023 and $501,000 in 2022 in the accompanying consolidated statement of income. The provision for income taxes in the accompanying consolidated statement of income differs from the provision calculated by applying the statutory federal income tax rate of 21% to income before provision for income taxes due to the following:
(In thousands) |  | December 28, 2024 |  | December 30, 2023 |  | December 31, 2022
Provision for Income Taxes at Statutory Rate |  | $ | 32,145 |  |  | $ | 33,393 |  |  | $ | 34,784 |
Increases (Decreases) Resulting From: |  |  |  |  |  |
Foreign tax rate differential |  | 7,697 |  |  | 5,070 |  |  | 5,770 |
State income taxes, net of federal income tax |  | 2,512 |  |  | 2,965 |  |  | 2,316 |
Nondeductible expenses |  | 1,731 |  |  | 1,730 |  |  | 2,683 |
U.S. tax (benefit) cost of foreign earnings |  | (1,379) |  |  | 1,270 |  |  | 932 |
(Reversal of) provision for tax benefit reserves, net |  | (65) |  |  | 386 |  |  | (1,368) |
Research and development tax credits |  | (503) |  |  | (520) |  |  | (425) |
Excess tax benefit related to stock-based compensation |  | (401) |  |  | (276) |  |  | (377) |
Change in valuation allowance |  | (203) |  |  | (684) |  |  | 318 |
Other |  | (1,018) |  |  | (1,124) |  |  | (727) |
|  | $ | 40,516 |  |  | $ | 42,210 |  |  | $ | 43,906 |
The Company's net deferred tax liability consists of the following:
(In thousands) |  | December 28, 2024 |  | December 30, 2023
Deferred Tax Asset: |  |  |  |
Net operating loss carryforwards |  | $ | 9,623 |  |  | $ | 11,300 |
Lease liabilities |  | 9,094 |  |  | 6,820 |
Inventory basis difference |  | 5,589 |  |  | 5,417 |
Employee compensation |  | 5,196 |  |  | 4,690 |
Capitalized research expenses |  | 4,682 |  |  | 4,159 |
Reserves and accruals |  | 3,125 |  |  | 2,581 |
Allowance for credit losses |  | 822 |  |  | 776 |
Foreign, state, and alternative minimum tax credit carryforwards |  | 344 |  |  | 490 |
Other |  | 153 |  |  | 214 |
Deferred tax asset, gross |  | 38,628 |  |  | 36,447 |
Less: valuation allowance |  | (7,570) |  |  | (7,829) |
Deferred tax asset, net |  | 31,058 |  |  | 28,618 |
Deferred Tax Liability: |  |  |  |
Goodwill and intangible assets |  | (44,027) |  |  | (41,116) |
Fixed asset basis difference |  | (13,372) |  |  | (11,764) |
ROU assets |  | (8,754) |  |  | (5,969) |
Provision for unremitted foreign earnings |  | (1,135) |  |  | (1,153) |
Other |  | (2,919) |  |  | (2,361) |
Deferred tax liability |  | (70,207) |  |  | (62,363) |
Net deferred tax liability |  | $ | (39,149) |  |  | $ | (33,745) |
Deferred tax assets and liabilities are presented in the accompanying consolidated balance sheet within other assets and long-term deferred income taxes on a net basis by tax jurisdiction. The Company has established valuation allowances related to certain domestic and foreign deferred tax assets on deductible temporary differences, tax losses, and tax credit carryforwards. The valuation allowance at year-end 2024 was $7,570,000, consisting of $63,000 in the United States and $7,507,000 in foreign jurisdictions. The decrease in the valuation allowance in 2024 of $259,000 is related primarily to utilization of net operating losses and fluctuations in foreign currency exchange rates, partially offset by the valuation allowance recorded in purchase accounting. Compliance with ASC 740 requires the Company to periodically evaluate the necessity of establishing or adjusting a valuation allowance for deferred tax assets depending on whether it is more likely than not that a related tax benefit will be realized in future periods. When assessing the need for a valuation allowance in a tax jurisdiction, the Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As part of this evaluation, the Company considers its cumulative three-year history of earnings before income taxes, taxable income in prior carryback years, future reversals of existing taxable temporary differences, prudent and feasible tax planning strategies, and expected future results of operations. As of year-end 2024, the Company maintained a valuation allowance in the United States against a portion of its state net operating loss carryforwards in the United States and a valuation allowance in certain foreign jurisdictions due to the uncertainty of future profitability in the state and those foreign jurisdictions. At year-end 2024, the Company had state net operating loss carryforwards of $9,146,000 and foreign net operating loss carryforwards of $40,136,000. The U.S. state net operating loss carryforwards begin to expire in 2025 and a portion does not expire. Of the foreign net operating loss carryforwards, $1,244,000 will expire in the years 2025 through 2044, and the remainder do not expire. As of year-end 2024, the Company had foreign tax credits carryforwards of $240,000. The foreign tax credit carryforward begins to expire in 2028. The utilization of this tax attribute is limited to the Company's future taxable income. At year-end 2024, the Company had approximately $296,095,000 of unremitted foreign earnings. During 2024, the Company repatriated $27,658,000 of previously taxed foreign earnings to the United States and recognized a foreign exchange loss of $1,746,000 associated with these earnings. The Company intends to repatriate the distributable reserves of select foreign subsidiaries back to the United States and has recognized $584,000 of tax expense on the estimated repatriation amount during 2024. Except for these select foreign subsidiaries, the Company intends to indefinitely reinvest $255,324,000 of earnings of its foreign subsidiaries in order to support the current and future capital needs of their operations, including the repayment of the Company’s foreign debt. The related foreign withholding taxes, which would be required if the Company were to remit these foreign earnings to the United States, would be approximately $5,311,000. The Company operates within multiple tax jurisdictions and could be subject to audit in those jurisdictions. Such audits can involve complex income tax issues, which may require an extended period of time to resolve and may cover multiple years. In management's opinion, adequate provisions for income taxes have been made for all years subject to audit. As of year-end 2024, the Company had a liability of $14,510,000 for unrecognized tax benefits of which $6,032,000, if recognized, would reduce the effective tax rate. A reconciliation of unrecognized tax benefits is as follows:
(In thousands) |  | December 28, 2024 |  | December 30, 2023
Unrecognized Tax Benefits, Beginning of Year |  | $ | 11,212 |  |  | $ | 10,354 |
Gross Increases – Tax Positions in Prior Periods |  | 80 |  |  | 44 |
Gross Increases – Tax Positions in Prior Periods Arising from Acquisitions (a) |  | 4,372 |  |  | — |
Gross Decreases – Tax Positions in Prior Periods |  | (25) |  |  | (37) |
Gross Increases – Current-Period Tax Positions |  | 931 |  |  | 1,589 |
Settlements |  | (85) |  |  | (130) |
Lapses of Statutes of Limitations |  | (1,624) |  |  | (749) |
Currency Translation |  | (351) |  |  | 141 |
Unrecognized Tax Benefits, End of Year |  | $ | 14,510 |  |  | $ | 11,212 |
(a) Indemnification assets of $4,372,000 were also recorded. A portion of the unrecognized tax benefits generated in 2024 is offset by deferred tax assets in the accompanying consolidated balance sheet. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company has accrued $3,488,000 at year-end 2024 and $2,017,000 at year-end 2023 for the potential payment of interest and penalties. The interest and penalties included in the accompanying consolidated statement of income was an expense of $131,000 in 2024 and $120,000 in 2023. The Company is currently under audit in certain of its foreign tax jurisdictions. It is reasonably possible that over the next fiscal year the amount of liability for unrecognized tax benefits may be reduced by up to $1,135,000 primarily from the expiration of tax statutes of limitations. The Company remains subject to U.S. federal income tax examinations for the tax years 2019 through 2024, and to non-U.S. income tax examinations for the tax years 2015 through 2024. In addition, the Company remains subject to state and local income tax examinations in the United States for the tax years 2003 through 2024.

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