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Income Taxes | 12 Months Ended
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Jan. 03, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our provision for (benefit from) income taxes consisted of the following:
| Fiscal Year Ended January 3, 2015 |  | Fiscal Year Ended January 4, 2014 |  | Fiscal Year Ended December 29, 2012
| (In thousands)
Federal income taxes: |  |  |  |  |
Current | $ | — |  |  | $ | (492 | ) |  | $ | 16 |
Deferred | — |  |  | (7,385 | ) |  | — |
State income taxes: |  |  |  |  |  |  |  |
Current | 160 |  |  | 192 |  |  | 334 |
Deferred | — |  |  | (1,343 | ) |  | — |
Foreign income taxes: |  |  |  |  |  |  |  |
Current | 134 |  |  | 19 |  |  | 56 |
Deferred | 18 |  |  | (4 | ) |  | (20 | )
Provision for (benefit from) income taxes | $ | 312 |  |  | $ | (9,013 | ) |  | $ | 386 |
The federal statutory income tax rate was 35%. Our provision for (benefit from) income taxes is reconciled to the federal statutory amount as follows:
| Fiscal Year Ended January 3, 2015 |  | Fiscal Year Ended January 4, 2014 |  | Fiscal Year Ended December 29, 2012
| (In thousands)
Benefit from income taxes computed at the federal statutory tax rate | $ | (4,746 | ) |  | $ | (17,371 | ) |  | $ | (7,924 | )
Benefit from state income taxes, net of federal benefit | (623 | ) |  | (1,991 | ) |  | (866 | )
Valuation allowance change | 5,656 |  |  | 19,445 |  |  | 8,820 |
Nondeductible items | 232 |  |  | 270 |  |  | 484 |
Benefit from allocation of income taxes to other comprehensive income (loss) | — |  |  | (8,726 | ) |  | — |
Other | (207 | ) |  | (640 | ) |  | (128 | )
Provision for (benefit from) income taxes | $ | 312 |  |  | $ | (9,013 | ) |  | $ | 386 |
In accordance with the intraperiod tax allocation provisions of GAAP, we are required to consider all items (including items recorded in other comprehensive income) in determining the amount of tax benefit resulting from a loss from continuing operations that should be allocated to continuing operations. In fiscal 2014 and fiscal 2012, there were no intraperiod tax allocations, since there was a loss in other comprehensive income for these periods. In fiscal 2013, a non-cash tax benefit was recorded on the loss from continuing operations in the amount of $8.7 million, which was offset in full by income tax expense recorded in other comprehensive income. While the income tax benefit from continuing operations is reported in our Consolidated Statements of Operations and Comprehensive Income (Loss), the income tax expense on other comprehensive income is recorded directly to accumulated other comprehensive income (loss), which is a component of stockholders’ equity (deficit). Our financial statements contain certain deferred tax assets which primarily resulted from tax benefits associated with the loss before income taxes, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves, pension obligations, and differences between book and tax depreciation and amortization. We record a valuation allowance against our net deferred tax assets when we determine that based on the weight of available evidence, it is more likely than not that our net deferred tax assets will not be realized. In our evaluation of the weight of available evidence, we considered recent reported losses as negative evidence which carried substantial weight. Therefore, we considered evidence related to the four sources of taxable income, to determine whether such positive evidence outweighed the negative evidence associated with the losses incurred. The positive evidence considered included: •taxable income in prior carryback years, if carryback is permitted under the tax law; •future reversals of existing taxable temporary differences; •tax planning strategies; and •future taxable income exclusive of reversing temporary differences and carryforwards. During fiscal years 2014 and 2013, we weighed all available positive and negative evidence, and concluded that the weight of the negative evidence of cumulative losses over several years continued to outweigh the positive evidence. Based on the conclusions reached, we maintained a full valuation allowance during fiscal years 2014 and 2013. The components of our net deferred income tax assets (liabilities) are as follows:
| January 3, 2015 |  | January 4, 2014
| (In thousands)
Deferred income tax assets: |  |  |
Inventory reserves | $ | 3,333 |  |  | $ | 2,832 |
Compensation-related accruals | 5,434 |  |  | 4,893 |
Accruals and reserves | 787 |  |  | 1,030 |
Accounts receivable | 728 |  |  | 1,291 |
Restructuring costs | 212 |  |  | 488 |
Property and equipment | 16 |  |  | — |
Pension | 13,214 |  |  | 8,245 |
Benefit from net operating loss (“NOL”) carryovers (1) | 76,264 |  |  | 70,169 |
Other | 685 |  |  | 703 |
Total gross deferred income tax assets | 100,673 |  |  | 89,651 |
Less: Valuation allowances | (99,979 | ) |  | (88,279 | )
Total net deferred income tax assets | $ | 694 |  |  | $ | 1,372 |
Deferred income tax liabilities: |  |  |  |  |
Property and equipment | — |  |  | (365 | )
Other | (711 | ) |  | (1,006 | )
Total deferred income tax liabilities | (711 | ) |  | (1,371 | )
Deferred income tax assets (liabilities), net | $ | (17 | ) |  | $ | 1 |
(1) | Our federal NOL carryovers are $184.2 million and will expire in 14 to 20 years. Our state NOL carryovers are $238.5 million and will expire in 1 to 20 years.
Activity in our deferred tax asset valuation allowance for fiscal years 2014 and 2013 was as follows:
| Fiscal Year Ended January 3, 2015 |  | Fiscal Year Ended January 4, 2014
| (In thousands)
Balance at beginning of the year | $ | 88,279 |  |  | $ | 78,050 |
Valuation allowance provided for taxes related to: |  |  |  |  |
Loss before income taxes | 11,700 |  |  | 10,229 |
Balance at end of the year | $ | 99,979 |  |  | $ | 88,279 |
We have recorded income tax and related interest liabilities where we believe certain of our tax positions are not more likely than not to be sustained if challenged. The following table summarizes the activity related to our unrecognized tax benefits:
| (In thousands)
Balance at December 31, 2011 | $ | 873 |
Increases related to current year tax positions | — |
Additions for tax positions in prior years | — |
Reductions for tax positions in prior years | — |
Reductions due to lapse of applicable statue of limitations | (47 | )
Settlements | — |
Balance at December 29, 2012 | 826 |
Increases related to current year tax positions | — |
Additions for tax positions in prior years | — |
Reductions for tax positions in prior years | — |
Reductions due to lapse of applicable statue of limitations | (567 | )
Settlements | — |
Balance at January 4, 2014 | 259 |
Increases related to current year tax positions | — |
Additions for tax positions in prior years | — |
Reductions for tax positions in prior years | — |
Reductions due to lapse of applicable statute of limitations | (75 | )
Settlements | — |
Balance at January 3, 2015 | $ | 184 |
Included in the unrecognized tax benefits at January 3, 2015, and January 4, 2014, were $0.2 million and $0.3 million, respectively, of tax benefits that, if recognized, would reduce our annual effective tax rate. We also accrued an immaterial amount of interest related to these unrecognized tax benefits during fiscal 2014 and 2013, and this amount is reported in “Interest expense” in our Consolidated Statements of Operations and Comprehensive Income (Loss). We do not expect our unrecognized tax benefits to change materially over the next 12 months. We file U.S., state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2011 through 2014 tax years generally remain subject to examination by federal and most state and foreign tax authorities.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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