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Income Taxes (Tables) | 12 Months Ended
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Jan. 01, 2021
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax, Domestic and Foreign | Income from continuing operations before provision (benefit) for income taxes was as follows (in thousands):
|  | Years Ended |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Domestic |  | $ | (16,245 | ) |  | $ | (5,321 | ) |  | $ | (2,629 | )
Foreign |  |  | 24,512 |  |  |  | 18,347 |  |  |  | 9,268 |
Income before income taxes |  | $ | 8,267 |  |  | $ | 13,026 |  |  | $ | 6,639 |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes consisted of the following (in thousands):
|  | Years Ended |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current tax provision: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 2 |  |  | $ | — |  |  | $ | — |
State |  |  | 15 |  |  |  | 13 |  |  |  | 10 |
Foreign |  |  | 3,186 |  |  |  | 2,446 |  |  |  | 1,220 |
Total current provision |  |  | 3,203 |  |  |  | 2,459 |  |  |  | 1,230 |
Deferred tax provision (benefit): |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (573 | ) |  |  | (3,003 | ) |  |  | — |
State |  |  | 78 |  |  |  | (373 | ) |  |  | — |
Foreign |  |  | (354 | ) |  |  | (105 | ) |  |  | 441 |
Total deferred provision (benefit) |  |  | (849 | ) |  |  | (3,481 | ) |  |  | 441 |
Provision (benefit) for income taxes |  | $ | 2,354 |  |  | $ | (1,022 | ) |  | $ | 1,671 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory U.S. federal tax rate to the Company’s effective tax rate was as follows (dollars in thousands):
|  | Years Ended |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | Rate |  |  | Amount |  |  | Rate |  |  | Amount |  |  | Rate |  |  | Amount |
Computed provision for taxes based on income at statutory rate |  |  | 21.0 | % |  | $ | 1,736 |  |  |  | 21.0 | % |  | $ | 2,735 |  |  |  | 21.0 | % |  | $ | 1,394 |
Increase (decrease) in taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Permanent differences |  |  | 0.4 | % |  |  | 29 |  |  |  | 0.5 | % |  |  | 60 |  |  |  | 0.5 | % |  |  | 34 |
State taxes, net of federal income tax benefit |  |  | 0.9 | % |  |  | 74 |  |  |  | (2.2 | )% |  |  | (284 | ) |  |  | 0.1 | % |  |  | 8 |
State tax benefit |  |  | (16.9 | )% |  |  | (1,397 | ) |  |  | 0.7 | % |  |  | 93 |  |  |  | (6.7 | )% |  |  | (447 | )
Foreign tax differential |  |  | (27.9 | )% |  |  | (2,304 | ) |  |  | (11.6 | )% |  |  | (1,514 | ) |  |  | (11.0 | )% |  |  | (730 | )
Expiration of state net operating tax loss carryforwards |  |  | 3.2 | % |  |  | 268 |  |  |  | 8.0 | % |  |  | 1,039 |  |  |  | — |  |  |  | — |
Foreign earnings not permanently reinvested, net of the participation exemption |  |  | (0.1 | )% |  |  | (5 | ) |  |  | (0.1 | )% |  |  | (7 | ) |  |  | (14.0 | )% |  |  | (926 | )
Foreign dividend withholding |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4.8 | % |  |  | 317 |
ASC 718 share based payment adjustment |  |  | 5.8 | % |  |  | 476 |  |  |  | — |  |  |  | — |  |  |  | (6.5 | )% |  |  | (434 | )
Incentive stock option compensation |  |  | (59.4 | )% |  |  | (4,907 | ) |  |  | (0.4 | )% |  |  | (55 | ) |  |  | (12.7 | )% |  |  | (842 | )
Non-qualified stock option and restricted stock tax deduction in excess of cumulative book deduction |  |  | (52.3 | )% |  |  | (4,324 | ) |  |  | (12.9 | )% |  |  | (1,679 | ) |  |  | (12.7 | )% |  |  | (842 | )
Executive compensation Section 162(m) limitation |  |  | 43.0 | % |  |  | 3,552 |  |  |  | 4.4 | % |  |  | 569 |  |  |  | 0.9 | % |  |  | 60 |
GILTI inclusion |  |  | 54.0 | % |  |  | 4,461 |  |  |  | 25.9 | % |  |  | 3,372 |  |  |  | 26.8 | % |  |  | 1,780 |
Other |  |  | (2.5 | )% |  |  | (204 | ) |  |  | 0.9 | % |  |  | 121 |  |  |  | 0.5 | % |  |  | 30 |
Valuation allowance |  |  | 59.3 | % |  |  | 4,899 |  |  |  | (42.0 | )% |  |  | (5,472 | ) |  |  | 34.2 | % |  |  | 2,269 |
Effective tax provision (benefit) |  |  | 28.5 | % |  | $ | 2,354 |  |  |  | (7.8 | )% |  | $ | (1,022 | ) |  |  | 25.2 | % |  | $ | 1,671 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets (liabilities) at January 1, 2021 and January 3, 2020 were as follows (in thousands):
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts and sales returns |  | $ | 357 |  |  | $ | 233 |
Inventories |  |  | 691 |  |  |  | 703 |
Accrued vacation |  |  | 599 |  |  |  | 428 |
Accrued other expenses |  |  | 786 |  |  |  | 1,036 |
Stock-based compensation |  |  | 3,277 |  |  |  | 2,859 |
Pensions |  |  | 1,679 |  |  |  | 1,159 |
Depreciation and amortization |  |  | — |  |  |  | 162 |
Net operating loss carryforwards |  |  | 38,642 |  |  |  | 32,251 |
Business, foreign, AMT and R&D credit carryforwards |  |  | 3,051 |  |  |  | 3,164 |
Prepaid expenses |  |  | 280 |  |  |  | 272 |
Capitalized R&D |  |  | 1,000 |  |  |  | 986 |
Operating lease liability |  |  | 1,687 |  |  |  | 1,309 |
Other |  |  | 19 |  |  |  | 5 |
Valuation allowance |  |  | (42,502 | ) |  |  | (37,007 | )
Total deferred tax assets |  | $ | 9,566 |  |  | $ | 7,560 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Foreign tax withholding |  | $ | (1,295 | ) |  | $ | (1,295 | )
Operating lease ROU assets |  |  | (1,662 | ) |  |  | (1,309 | )
Depreciation and amortization |  |  | (424 | ) |  |  | — |
Amortization of R&D |  |  | (846 | ) |  |  | (805 | )
Net foreign earnings not permanently reinvested |  |  | (617 | ) |  |  | (401 | )
Total deferred tax liabilities |  |  | (4,844 | ) |  |  | (3,810 | )
Total net deferred tax assets |  | $ | 4,722 |  |  | $ | 3,750 |
Summary of Income Tax Examinations | The following tax years remain subject to examination:
Significant jurisdictions |  | Open Years
U.S. Federal |  | 2017 – 2019
California |  | 2016 – 2019
Switzerland |  | 2019
Japan |  | 2018 – 2019

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