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INCOME TAXES | 12 Months Ended
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Apr. 03, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Domestic and foreign income before (benefit) provision for income tax is as follows:
(In thousands) | 2021 |  | 2020 |  | 2019
Domestic | $ | 5,526 |  |  | $ | 5,344 |  |  | $ | 26,665 |
Foreign | 67,387 |  |  | 81,808 |  |  | 46,968 |
Total | $ | 72,913 |  |  | $ | 87,152 |  |  | $ | 73,633 |
The income tax (benefit) provision from continuing operations contains the following components:
(In thousands) | 2021 |  | 2020 |  | 2019
Current |  |  |  |  |
Federal | $ | (289) |  |  | $ | 3,834 |  |  | $ | (4,165) |
State | 1,256 |  |  | 1,054 |  |  | 844 |
Foreign | 13,319 |  |  | 12,467 |  |  | 8,584 |
Total current | $ | 14,286 |  |  | $ | 17,355 |  |  | $ | 5,263 |
Deferred |  |  |  |  |
Federal | (12,906) |  |  | (8,257) |  |  | 12,220 |
State | (2,436) |  |  | 280 |  |  | 463 |
Foreign | (5,500) |  |  | 1,248 |  |  | 668 |
Total deferred | $ | (20,842) |  |  | $ | (6,729) |  |  | $ | 13,351 |
Total | $ | (6,556) |  |  | $ | 10,626 |  |  | $ | 18,614 |
The Company conducts business globally and reports its results of operations in a number of foreign jurisdictions in addition to the United States. The Company's reported tax rate is impacted by the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which it operates have tax rates that differ from the U.S. statutory tax rate. The Company incorporated certain provisions of the Tax Cuts and Jobs Act (the “Act”) in the calculation of the tax provision and effective tax rate, including the provisions related to global intangible low taxed income (“GILTI”), foreign derived intangible income (“FDII”), base erosion anti abuse Tax (“BEAT”), as well as other provisions which limit tax deductibility of expenses. Under the GILTI provisions, U.S. taxes are imposed on foreign income in excess of a deemed return on tangible assets of its foreign subsidiaries. The ability to benefit from a deduction and foreign tax credits against a portion of the GILTI income may be limited under the GILTI rules as a result of the utilization of net operating losses, foreign sourced income, and other potential limitations within the foreign tax credit calculation. In July 2020, the U.S. Treasury issued final regulations and additional proposed regulations that address the application of the high-taxed exclusion from GILTI. Under these regulations, the Company can make an annual election to exclude from its GILTI calculation, income from its foreign subsidiaries that have effective income tax rate exceeds 18.9% for that year. The regulations must be applied for tax years beginning after July 23, 2020 but companies have the option to apply them retroactively for tax years beginning after December 31, 2017 and before July 23, 2020. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted in the United States on March 27, 2020. The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. While the CARES Act provides extensive tax changes in response to the COVID-19 pandemic, the provisions did not have a significant impact on the Company’s financial results. The Company's subsidiary in Malaysia has been granted a full income tax exemption to manufacture whole blood and apheresis devices that could be in effect for up to ten years, provided certain conditions are satisfied. The income tax exemption was in effect beginning June 1, 2016. Tax effected, significant temporary differences comprising the net deferred tax liability are as follows:
(In thousands) | April 3, 2021 |  | March 28, 2020
Deferred tax assets: |  |  |
Depreciation | $ | 1,054 |  |  | $ | 1,922 |
Amortization of intangibles | 1,167 |  |  | 1,156 |
Inventory | 5,166 |  |  | 2,904 |
Accruals, reserves and other deferred tax assets | 17,274 |  |  | 17,345 |
Net operating loss carry-forward | 38,827 |  |  | 4,953 |
Stock based compensation | 4,374 |  |  | 3,634 |
Operating lease liabilities | 16,941 |  |  | 14,115 |
Tax credit carry-forward, net | 5,073 |  |  | 5,159 |
Capitalized research expenses | 4,291 |  |  | 3,820 |
Gross deferred tax assets | 94,167 |  |  | 55,008 |
Less valuation allowance | (11,081) |  |  | (14,587) |
Total deferred tax assets (after valuation allowance) | 83,086 |  |  | 40,421 |
Deferred tax liabilities: |  |  |
Depreciation | (10,470) |  |  | (15,840) |
Amortization of goodwill and intangibles | (68,802) |  |  | (15,450) |
Unremitted earnings | (1,060) |  |  | (654) |
Operating lease assets | (14,722) |  |  | (12,743) |
Debt discount | (19,868) |  |  | — |
Other deferred tax liabilities | (5,980) |  |  | (2,366) |
Total deferred tax liabilities | (120,902) |  |  | (47,053) |
Net deferred tax liabilities | $ | (37,816) |  |  | $ | (6,632) |
The increase in the worldwide net deferred tax liability is primarily due to the acquisition of Cardiva in March 2021 (as described in Note 4, Acquisitions). For federal income tax purposes the acquisition was deemed a stock purchase and therefore the historical tax basis in the assets acquired and liabilities assumed was carried over upon acquisition. Taxable or deductible temporary differences arising from differences in the assigned fair value for financial statement purposes and the historical tax bases in assets acquired or liabilities assumed is recorded as part of goodwill in the period the transaction occurred. The increase in the net deferred tax liabilities is also attributable to the basis difference in the conversion feature of the convertible senior notes (as described in Note 13, Notes Payable and Long-term Debt). In accounting for the issuance of the convertible senior notes, the Company recorded the basis difference associated with the equity component representing the conversion option to additional paid-in capital. The valuation allowance decrease of $3.5 million during fiscal 2021 is primarily due to the sale or transfer of net assets as part Puerto Rico Divesture in June 2020 (as described in Note 5, Divestitures) off as well as changes to valuation allowances on certain foreign jurisdictions where the Company has concluded that its deferred tax assets are not more-likely-than-not realizable. The Company has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income. It has also considered the ability to implement certain strategies that would, if necessary, be implemented to accelerate taxable income and use expiring deferred tax assets. The Company has concluded future taxable income can be considered a source of income to realize a benefit for deferred tax assets in certain jurisdictions. In addition, the Company has concluded that it cannot rely on future taxable income in certain risk bearing principal jurisdictions due uncertainty surrounding future taxable income including as a result of the effects of Covid-19 and the recent announcement of CSL intent not to renew its supply agreement for the use of PCS2 plasma collection system devices and the purchase of disposable plasmapheresis kits in the U.S. following the expiration of the current term in June 2022. The Company believes it is able to support the deferred tax assets recognized as of the end of the year based on all of the available evidence. The worldwide net deferred tax liability as of April 3, 2021 includes deferred tax liabilities related to amortizable tax basis in goodwill, which are indefinite lived and can only be used as a source of income to benefit other indefinite lived assets. As of April 3, 2021, the Company maintains a valuation allowance against certain U.S. state deferred tax assets that are not more-likely-than-not realizable and maintains a full valuation allowance against the net deferred tax assets of certain foreign subsidiaries. In connection with the acquisition of Cardiva, the Company acquired federal and state net operating loss carryforwards of $151.4 million and $70.7 million, respectively. The Company also acquired federal and state tax research credit carryforwards of $0.2 million and $0.4 million, respectively. These net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S. Internal Revenue Code of 1986, respectively, as well as similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. The Company conducted a preliminary Section 382 study covering the period of inception (July 2002) through March 1, 2021. The study concluded that ownership changes occurred during that period which limit the amount of the Company’s net operating losses and tax credit carryforwards that can be utilized before expiring. The carryforwards disclosed represent the amount of attributes that can be utilized based on the results of the study. As of April 3, 2021, the Company has U.S. federal net operating loss carryforwards of $141.9 million of which $27.3 million will begin to expire in fiscal 2022 and $114.6 million can be carried forward indefinitely. The Company has U.S. state net operating losses of $102.7 million of which $79.7 million will begin to expire in fiscal 2022 and $23.0 million can be carried forward indefinitely. The Company has federal and state tax credits of $0.4 million and $5.7 million, respectively, which will begin to expire in fiscal 2031 and fiscal 2025, respectively. As of April 3, 2021, the Company has foreign net operating losses of approximately $12.6 million that are available to reduce future income of which $6.3 million will begin to expire in fiscal 2034 and $6.3 million can be carried forward indefinitely. As of April 3, 2021, substantially all of the unremitted earnings of the Company have been taxed in the U.S. The Company has provided $0.6 million of net foreign withholding taxes on approximately $204.8 million of unremitted earnings that are not indefinitely reinvested. The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $94.0 million as such amounts are considered to be indefinitely reinvested in the business. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations, to service existing debt obligations and to fund future foreign acquisitions. The Company does not believe it is practicable to estimate the amount of income taxes payable on the earnings that are indefinitely reinvested in foreign operations, however a significant portion of the unremitted earnings could be remitted without a future tax cost. The income tax (benefit) provision from continuing operations differs from the tax provision (benefit) computed at the U.S. federal statutory income tax rate due to the following:
(In thousands) | 2021 |  | 2020 |  | 2019
Tax at federal statutory rate | $ | 15,312 |  |  | 21.0 | % |  | $ | 18,302 |  |  | 21.0 | % |  | $ | 15,463 |  |  | 21.0 | %
Difference between U.S. and foreign tax | (7,049) |  |  | (9.7) | % |  | (6,688) |  |  | (7.7) | % |  | (1,423) |  |  | (1.9) | %
State income taxes net of federal benefit | (924) |  |  | (1.3) | % |  | (342) |  |  | (0.4) | % |  | 902 |  |  | 1.2 | %
Change in uncertain tax positions | 1,172 |  |  | 1.6 | % |  | 785 |  |  | 0.9 | % |  | 267 |  |  | 0.4 | %
Global intangible low taxed income | (758) |  |  | (1.0) | % |  | 5,431 |  |  | 6.2 | % |  | 5,954 |  |  | 8.1 | %
Unremitted earnings | 257 |  |  | 0.4 | % |  | 40 |  |  | — | % |  | 527 |  |  | 0.7 | %
Deferred statutory rate changes | (243) |  |  | (0.3) | % |  | 1,091 |  |  | 1.3 | % |  | 1,183 |  |  | 1.6 | %
Non-deductible executive compensation | 2,238 |  |  | 3.1 | % |  | 2,423 |  |  | 2.8 | % |  | 1,588 |  |  | 2.2 | %
Non-deductible other | 2,038 |  |  | 2.8 | % |  | 1,050 |  |  | 1.2 | % |  | 462 |  |  | 0.6 | %
Stock compensation benefits | (5,504) |  |  | (7.5) | % |  | (12,133) |  |  | (13.9) | % |  | (5,382) |  |  | (7.3) | %
Research credits | (1,230) |  |  | (1.7) | % |  | (2,085) |  |  | (2.4) | % |  | (768) |  |  | (1.0) | %
Intercompany sale of intellectual property | (7,550) |  |  | (10.4) | % |  | — |  |  | — | % |  | — |  |  | — | %
One-time transition tax from tax reform | — |  |  | — | % |  | — |  |  | — | % |  | 26 |  |  | — | %
Valuation allowance | (3,144) |  |  | (4.4) | % |  | 2,939 |  |  | 3.4 | % |  | (184) |  |  | (0.3) | %
Other, net | (1,171) |  |  | (1.6) | % |  | (187) |  |  | (0.2) | % |  | (1) |  |  | — | %
Income tax (benefit) provision | $ | (6,556) |  |  | (9.0) | % |  | $ | 10,626 |  |  | 12.2 | % |  | $ | 18,614 |  |  | 25.3 | %
The Company recorded an income tax benefit of $6.6 million, representing an effective tax rate of (9.0)%. The effective tax rate is lower than the U.S. statutory rate of 21.0% primarily as a result of the tax benefit from the sale or transfer of net assets as part Puerto Rico Divesture in June 2020 (as described in Note 5, Divestitures) as well as recognizing a non-recurring tax benefit from the release of a portion of the valuation allowance due to taxable temporary differences acquired with the acquisition of Cardiva. Other factors decreasing the effective tax rate include the impact of tax benefits of stock compensation windfall deductions, research credits generated and jurisdictional mix of earnings, partially offset by the impact of GILTI, non-deductible executive compensation, tax reserves and non-deductible acquisition costs. The Company has recorded an immaterial tax expense related to unremitted foreign earnings that are not considered permanently reinvested. Unrecognized Tax Benefits Unrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of April 3, 2021, the Company had $6.1 million of unrecognized tax benefits, of which $5.3 million would impact the effective tax rate, if recognized. As of March 28, 2020, the Company had $4.6 million of unrecognized tax benefits, of which $4.0 million would impact the effective tax rate, if recognized. At March 30, 2019, the Company had $4.7 million of unrecognized tax benefits, of which $3.9 million would impact the effective tax rate, if recognized. During the fiscal year ended April 3, 2021, the Company settled an ongoing withholding tax audit with the Swiss taxing authorities covering fiscal 2014 through fiscal 2018. The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended April 3, 2021, March 28, 2020 and March 30, 2019:
(In thousands) | April 3, 2021 |  | March 28, 2020 |  | March 30, 2019
Beginning Balance | $ | 4,620 |  |  | $ | 4,657 |  |  | $ | 4,450 |
Additions for tax positions of current year | 335 |  |  | 180 |  |  | 282 |
Additions for tax positions of prior years | 1,194 |  |  | 880 |  |  | — |
Reductions of tax positions | (42) |  |  | (539) |  |  | (52) |
Settlements of tax positions | — |  |  | (558) |  |  | — |
Closure of statute of limitations | — |  |  | — |  |  | (23) |
Ending Balance | $ | 6,107 |  |  | $ | 4,620 |  |  | $ | 4,657 |
As of April 3, 2021, the Company anticipates that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $2.3 million in the next twelve months, as a result of closure of various statutes of limitations and potential settlements with tax authorities. The Company's historical practice has been and continues to be to recognize interest and penalties related to federal, state and foreign income tax matters in income tax expense. Approximately $1.4 million and $0.4 million of gross interest and penalties were accrued at April 3, 2021 and March 28, 2020, respectively, and are not included in the amounts above. Additionally, $0.9 million and $0.3 million of accrued interest and penalties was included in income tax benefit for the years ended April 3, 2021 and March 28, 2020, respectively. Such amounts were immaterial during the fiscal year ended and March 30, 2019. The Company conducts business globally and, as a result, files federal, state and foreign income tax returns in multiple jurisdictions. In the normal course of business, it is subject to examination by taxing authorities throughout the world. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years before fiscal 2017 and foreign income tax examinations for years before fiscal 2016. To the extent that the Company has tax attribute carry-forwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state, or foreign tax authorities to the extent utilized in a future period.

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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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