XML 31 R16.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Significant components of the provision for income taxes, including those related to non-controlling interest, are as follows:
202320222021
Current:   
Federal$11.6 $29.8 $14.1 
State4.1 8.3 4.0 
Foreign0.9 0.3 0.8 
Current provision16.6 38.5 18.8 
Deferred:   
Federal(2.0)(13.1)(0.7)
State1.1 (2.8)0.4 
Foreign(0.1)0.0 (0.1)
Deferred provision(1.0)(15.9)(0.4)
Total income tax expense$15.6 $22.5 $18.5 

The differences between the actual tax expense and tax expense computed at the statutory United States federal tax rate are explained as follows:
 202320222021
Federal statutory tax expense$13.6 $30.7 $16.4 
State taxes, net of federal tax effect3.7 5.6 3.7 
Credit for research activities(5.3)(4.2)(4.0)
Valuation allowance(0.9)(7.1)(0.2)
Foreign taxes0.7 0.7 0.8 
Executive compensation limitation1.7 1.4 1.2 
Acquisition expenses1.8 — — 
Sale of foreign subsidiary— (4.2)— 
Provision to return true-up(0.8)0.1 (0.8)
Other – net1.1 (0.5)1.4 
Total income tax expense$15.6 $22.5 $18.5 

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 Corporation’s deferred tax liabilities and assets are as follows:
December 30,
2023		December 31,
2022
Deferred Taxes  
Allowance for doubtful accounts$1.3 $0.7 
Compensation13.5 7.2 
Inventory differences— 1.2 
Stock-based compensation8.5 7.9 
Accrued post-retirement benefit obligations4.5 4.4 
Vacation accrual2.1 3.9 
Warranty accrual5.2 4.2 
Tax loss and tax credit carryforwards9.1 5.8 
Capital loss carryforward3.3 0.1 
Lease liability35.0 27.3 
Research and development capitalization30.9 16.3 
Other3.8 2.6 
Total deferred tax assets$117.2 $81.7 
Deferred income(5.7)(5.6)
Inventory differences(3.8)— 
Goodwill and other intangible assets(64.7)(48.1)
Prepaid expenses(7.7)(6.6)
Right of use asset(31.4)(24.7)
Tax over book depreciation(78.3)(53.0)
Total deferred tax liabilities$(191.6)$(137.9)
Valuation allowance(9.8)(4.2)
Total net deferred tax liabilities$(84.2)$(60.4)
  
Long-term net deferred tax assets0.9 0.7 
Long-term net deferred tax liabilities(85.1)(61.0)
Total net deferred tax liabilities$(84.2)$(60.4)

The valuation allowance, which primarily relates to acquired deferred tax assets, is as follows:
Balance at beginning of periodExpenses (benefits)Impact of business combinationBalance at end of period
Year ended December 30, 2023$4.2 $(0.9)$6.5 $9.8 
Year ended December 31, 2022$11.3 $(7.1)$— $4.2 
Year ended January 1, 2022$11.5 $(0.2)$— $11.3 

The current year net increase in the valuation allowance of $5.6 million primarily relates to the acquisition of Kimball International state and foreign tax credits, partially offset by the release of existing allowances. The prior year decrease of $7.1 million primarily relates to the sale of Lamex in July 2022. This transaction created tax benefits for valuation adjustments related to existing deferred tax assets, as well as basis differences.

As of December 30, 2023, the Corporation had $3.7 million of foreign net operating losses and $2.9 million of U.S. state tax credit carryforwards, which expire over the next twenty years.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
20232022
Balance at beginning of period$2.2 $2.2 
Increases in positions taken in a prior period0.8 — 
New positions taken in a current period0.6 0.5 
Decrease due to lapse of statute of limitations(0.6)(0.5)
Balance at end of period$3.0 $2.2 

As of December 30, 2023, it is reasonably possible the amount of unrecognized tax benefits may increase or decrease within the twelve months following the reporting date. These increases or decreases in the unrecognized tax benefits would be due to new positions that may be taken on income tax returns, settlement of tax positions, and the closing of statutes of limitation. It is not expected any of the changes will be material individually, or in total, to the results or financial position of the Corporation.

The Corporation recognizes interest related to unrecognized tax benefits in interest expense, and penalties in operating expenses, consistent with the recognition of these items in prior reporting periods. The expenses and liabilities recorded for interest and penalties as of and for the years ended December 30, 2023 and December 31, 2022 are immaterial.

Tax years 2020 through 2022 remain open for examination by the Internal Revenue Service ("IRS"). Tax years 2019 through 2022 remain open for examination in various state and foreign jurisdictions. The Corporation is not currently under federal or state income tax examination.