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Income Taxes | 12 Months Ended
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Apr. 28, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Note 14. Income Taxes On December 22, 2017, President Trump signed the Tax Act into law. The Tax Act makes broad and complex changes to the Code. Some of the most significant provisions of the Tax Act impacting us include a reduction of the U.S. federal corporate income tax rate from 35% to 21%, a one-time "deemed repatriation" tax on previously untaxed accumulated earnings and profits of subsidiaries in non-U.S. jurisdictions, and a transition of U.S. international taxation from a worldwide tax system to a territorial tax system. Because we file our tax return based on our fiscal year, the federal statutory tax rate for our fiscal 2018 tax return will be a blended rate of 30.4%. As a result of the Tax Act, we have recorded a provisional reduction to our net U.S. deferred tax assets of $3,534, which resulted in a corresponding increase to income tax expense for fiscal 2018. Additionally, we have recorded a provisional increase to income tax expense of $285 for the one-time deemed repatriation tax. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 which allows the recording of provisional amounts during a measurement period, not to exceed one year from the enactment date of the Tax Act, to account for the impacts of the Tax Act in companies' financial statements when companies do not have the necessary information available, prepared or analyzed in reasonable detail to complete their accounting for the effects of the changes in the Tax Act. Since the Tax Act was passed late in the fourth quarter of calendar 2018, ongoing guidance and accounting interpretation are expected over the next year, and significant data and analysis is required to finalize amounts recorded pursuant to the Tax Act. We will continue to refine any estimates throughout the measurement period or until the accounting is complete, and the impact of the Tax Act may differ from these estimates, possibly materially, due to, among other things, changes in estimates and assumptions that we have made. The Tax Act includes a provision designed to currently tax global intangible low-taxed income ("GILTI") starting in fiscal 2019. Due to the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740, and we are considering available accounting policy alternatives to adopt to either record the U.S. income tax effect of future GILTI inclusions in the period in which they arise or establish deferred taxes with respect to the expected future tax liabilities associated with future GILTI inclusions. In addition, we are awaiting further interpretive guidance in connection with the computation of the GILTI tax. For these reasons, we have not yet determined a policy for the effect of this provision of the Tax Act. We expect to complete our analysis within the measurement period in accordance with Staff Accounting Bulletin No.118. The fiscal 2018 effective rate was higher than the federal statutory rate primarily due to the impacts of the new tax law totaling $3,819. The effective income tax rate for fiscal 2017 included the impact of benefits from increased research and development tax credits, which was offset by valuation allowances recorded during the current year in certain foreign jurisdictions. The effective income tax rate for fiscal 2016 included the impact of the Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) signed in December 2015, which retroactively reinstated as well as permanently extended the research and development tax credit. This provided a recognition of approximately $2,015 in tax benefits during fiscal 2016. The benefit is largely offset by pre-tax losses with no tax benefit due to valuation allowances and the current year establishment of valuation allowances in certain jurisdictions of $1,265 that were recognized during fiscal 2016. The following tables reflect the significant components of our income tax provision. The pretax income attributable to domestic and foreign operations was as follows:
| Year Ended
| April 28, 2018 |  | April 29, 2017 |  | April 30, 2016
Domestic | $ | 9,235 |  |  | $ | 16,010 |  |  | $ | 3,264 |
Foreign | 3,194 |  |  | (422 | ) |  | (138 | )
Income before income taxes | $ | 12,429 |  |  | $ | 15,588 |  |  | $ | 3,126 |
Income tax expense consisted of the following:
| Year Ended
| April 28, 2018 |  | April 29, 2017 |  | April 30, 2016
Current: |  |  |  |  |
Federal | $ | 1,646 |  |  | $ | 5,268 |  |  | $ | (467 | )
State | 868 |  |  | 1,158 |  |  | 123 |
Foreign | 1,205 |  |  | 863 |  |  | 557 |
Deferred: |  |  |  |  |
Federal | 3,693 |  |  | (1,625 | ) |  | 463 |
State | 27 |  |  | (397 | ) |  | (89 | )
Foreign | (572 | ) |  | (21 | ) |  | 478 |
| $ | 6,867 |  |  | $ | 5,246 |  |  | $ | 1,065 |
A reconciliation of the provision for income taxes and the amount computed by applying the federal statutory rate to income before income taxes is as follows:
|  | Year Ended
|  | April 28, 2018 |  | April 29, 2017 |  | April 30, 2016
Computed income tax expense at federal, state and local jurisdiction statutory rates |  | $ | 3,779 |  |  | $ | 5,456 |  |  | $ | 1,063 |
Impact of Tax Act |  | 3,819 |  |  | — |  |  | — |
Research and development tax credit |  | (1,598 | ) |  | (1,573 | ) |  | (2,015 | )
State taxes, net of federal benefit |  | 592 |  |  | 539 |  |  | 40 |
Other, net |  | 559 |  |  | 378 |  |  | 142 |
Change in valuation allowances |  | (486 | ) |  | 388 |  |  | 1,265 |
Stock compensation |  | 336 |  |  | 497 |  |  | 525 |
Meals and entertainment |  | 333 |  |  | 299 |  |  | 334 |
Domestic production activities deduction |  | (294 | ) |  | (542 | ) |  | (91 | )
Dividends paid to retirement plan |  | (238 | ) |  | (293 | ) |  | (323 | )
Change in uncertain tax positions |  | 65 |  |  | 97 |  |  | 125 |
|  | $ | 6,867 |  |  | $ | 5,246 |  |  | $ | 1,065 |
The components of the net deferred tax asset were as follows:
| April 28, 2018 |  | April 29, 2017
Deferred tax assets: |  |  |
Accrued warranty obligations | $ | 7,282 |  |  | $ | 10,469 |
Vacation accrual | 1,567 |  |  | 2,100 |
Deferred maintenance revenue | 392 |  |  | 1,336 |
Allowance for excess and obsolete inventory | 1,376 |  |  | 1,254 |
Equity compensation | 553 |  |  | 848 |
Allowance for doubtful accounts | 531 |  |  | 677 |
Inventory capitalization | 481 |  |  | 354 |
Accrued compensation and benefits | 651 |  |  | 1,232 |
Unrealized loss on foreign currency exchange | 37 |  |  | 226 |
Net operating loss carry forwards | 1,286 |  |  | 1,772 |
Research and development tax credit carry forwards | 334 |  |  | 311 |
Other | 1,042 |  |  | 1,266 |
| 15,532 |  |  | 21,845 |
Valuation allowance | (1,506 | ) |  | (2,061 | )
| 14,026 |  |  | 19,784 |
Deferred tax liabilities: |  |  |  |  |
Property and equipment | (4,881 | ) |  | (6,762 | )
Prepaid expenses | (486 | ) |  | (601 | )
Intangible assets | (1,302 | ) |  | (1,809 | )
Other | (41 | ) |  | (156 | )
| (6,710 | ) |  | (9,328 | )
| $ | 7,316 |  |  | $ | 10,456 |
The classification of net deferred tax assets in the accompanying consolidated balance sheets is:
| April 28, 2018 |  | April 29, 2017
Non-current assets | $ | 7,930 |  |  | $ | 11,292 |
Non-current liabilities | (614 | ) |  | (836 | )
| $ | 7,316 |  |  | $ | 10,456 |
The summary of changes in the amounts related to unrecognized uncertain tax benefits are:
| April 28, 2018 | April 29, 2017
Balance at beginning of year | $ | 3,113 |  | $ | 3,016 |
Gross increases related to prior period tax positions | 82 |  | 235 |
Gross decreases related to prior period tax positions | (30 | ) | — |
Gross increases related to current period tax positions | 152 |  | — |
Lapse of statute of limitations | (139 | ) | (138 | )
Balance at end of year | $ | 3,178 |  | $ | 3,113 |
All of our unrecognized tax benefits would have an impact on the effective tax rate if recognized. It is reasonably possible that the amount of unrecognized tax benefits could change due to one or more of the following events in the next 12 months: expiring statutes, audit activity, tax payments, or competent authority proceedings. A statute relating to $2,569 of the unrecognized tax benefits (including interest) expires in the next 12 months. The benefit will be recognized if the statute lapses with no further action taken by regulators. Interest and penalties incurred associated with uncertain tax positions are included in the "Income tax expense" line item in our consolidated statement of operations. Accrued interest and penalties are included in the related tax liability line item in our consolidated balance sheet of $238 and $170 as of April 28, 2018 and April 29, 2017, respectively. As of April 28, 2018, we had foreign net operating loss (“NOL”) carryforwards of approximately $7,223 primarily related to our operations in Belgium and Ireland, which have indefinite lives, and $62 is related to other international operations that expires in fiscal 2019. A deferred tax asset has been recorded for all NOL carryforwards totaling approximately $1,286. However, due to uncertainty in future taxable income, a valuation allowance totaling approximately $1,279 has been recorded in Belgium and Ireland. If sufficient evidence of our ability to generate future taxable income in the jurisdictions in which we currently maintain a valuation allowance causes us to determine that our deferred tax assets are more likely than not realizable, we would release our valuation allowance, which would result in an income tax benefit being recorded in our consolidated statement of operations. Additional tax information: We are subject to U.S. federal income tax as well as income taxes of multiple state and foreign jurisdictions. Due to various factors and operating in multiple state and foreign jurisdictions, our effective tax is subject to fluctuation. As a result of the expiration of statutes of limitations, our fiscal years 2015, 2016, and 2017 are the remaining years open under statutes of limitations for federal and state income tax examinations. Certain subsidiaries are also subject to income tax in several foreign jurisdictions which have open tax years varying by jurisdiction beginning in fiscal 2008. As of April 28, 2018, we have no deferred tax liability recognized relating to our investment in foreign subsidiaries where the earnings have been indefinitely reinvested. The Tax Act generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries, and as a result, the accumulated undistributed earnings would only be subject to other taxes, such as withholding taxes and state income taxes, on distribution of such earnings. No additional withholding or income taxes have been provided for any remaining undistributed foreign earnings not subject to the one-time deemed repatriation tax, as it is our intention for these amounts to continue to be indefinitely reinvested in foreign operations in all of our non-U.S. jurisdictions.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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