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Income Taxes | 12 Months Ended
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Jan. 02, 2016
Income Tax Disclosure [Abstract] |
Income Taxes |
10. | Income Taxes
The components of income tax expense were as follows:
| Fiscal Year Ended
| January 2, 2016 |  | December 27, 2014 |  | December 28, 2013
| (In thousands)
Current |  |  |  |  |
Federal | $ | 20,033 |  |  | $ | 15,128 |  |  | $ | 6,363 |
State | 972 |  |  | 129 |  |  | 1,124 |
Foreign | 121 |  |  | 91 |  |  | 41 |
Total current tax provision | 21,126 |  |  | 15,348 |  |  | 7,528 |
Deferred |  |  |  |  |
Federal | (1,657 | ) |  | 1,268 |  |  | (2,026 | )
State | (628 | ) |  | (2,010 | ) |  | (728 | )
Total deferred tax provision | (2,285 | ) |  | (742 | ) |  | (2,754 | )
Total income tax provision | $ | 18,841 |  |  | $ | 14,606 |  |  | $ | 4,774 |
In certain jurisdictions, an immaterial provision has been made for deferred taxes on undistributed earnings of non-U.S. subsidiaries. In other jurisdictions, for the remaining undistributed earnings of non-U.S. subsidiaries, no provision has been made for deferred taxes as these earnings have been indefinitely reinvested. As of January 2, 2016, a deferred tax liability has not been established for approximately $1.0 million of cumulative undistributed earnings of non-U.S. subsidiaries, as the Company plans to keep these amounts permanently reinvested overseas. The amount of any unrecognized deferred tax liability on these undistributed earnings would be immaterial. The components of net deferred tax assets were as follows:
| January 2, 2016 |  | December 27, 2014
| (In thousands)
Net deferred tax assets |  |  |
Current deferred tax assets |  |  |
Reserves and accruals | $ | — |  |  | $ | 18,568 |
Stock-based compensation | — |  |  | 767 |
Net operating loss carryforwards | — |  |  | 2,470 |
Foreign tax credits | — |  |  | 148 |
Total current deferred tax assets | — |  |  | 21,953 |
Non-current deferred tax assets |  |  |
Reserves and accruals | 21,544 |  |  | 586 |
Tax credits | 6,114 |  |  | 5,927 |
Property and equipment | 1,308 |  |  | 178 |
Stock-based compensation | 5,962 |  |  | 5,011 |
Net operating loss carryforwards | 3,606 |  |  | 3,879 |
Total non-current deferred tax assets | 38,534 |  |  | 15,581 |
Current deferred tax liabilities |  |  |
Prepaids | — |  |  | 448 |
Total current deferred tax liabilities | — |  |  | 448 |
Non-current deferred tax liabilities |  |  |
Prepaids | 623 |  |  | — |
Intangible assets | 6,190 |  |  | 7,172 |
Total non-current deferred tax liabilities | 6,813 |  |  | 7,172 |
Total net deferred tax assets | $ | 31,721 |  |  | $ | 29,914 |
In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes: Balance Sheet Classification of Deferred Taxes." ASU 2015-17 requires that the presentation of deferred tax assets and liabilities be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This standard will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016, with early adoption allowed. The Company elected to prospectively adopt ASU 2015-17. The prior reporting period was not retrospectively adjusted. The adoption of this guidance had no impact on the Company's Consolidated Statements of Income and Comprehensive Income. As of December 28, 2013, the Company maintained a valuation allowance of $2.1 million related to certain state tax attributes from the Evolution Robotics, Inc. acquisition. During the year ended December 27, 2014, this valuation allowance was released when realization of these state tax attributes became more likely than not. As of January 2, 2016, the Company did not record a valuation allowance as all deferred tax assets are considered realizable. The table below summarizes activity relating to the valuation allowance:
Fiscal Year Ended | Balance at beginning of period |  | Additions Charged to Costs and Expenses |  | Additions Charged to Goodwill |  | Deductions |  | Balance at End of Period
| (In thousands)
December 28, 2013 | $ | 2,691 |  |  | — |  |  | — |  |  | 601 |  |  | $ | 2,090 |
December 27, 2014 | $ | 2,090 |  |  | — |  |  | — |  |  | 2,090 |  |  | $ | — |
January 2, 2016 | $ | — |  |  | — |  |  | — |  |  | — |  |  | $ | — |
The Company has federal net operating loss carryforwards of $8.0 million and $15.1 million as of January 2, 2016 and December 27, 2014, respectively, which expire in 2031. The Company has state net operating loss carryforwards of $15.0 million and $19.4 million as of January 2, 2016 and December 27, 2014, respectively, which expire from 2029 to 2031. The Company has federal research and development credit carryforwards of $1.0 million and $1.0 million as of January 2, 2016 and December 27, 2014, respectively, which expire from 2026 to 2031. The Company has state research and development credit carryforwards of $9.3 million and $8.1 million as of January 2, 2016 and December 27, 2014, respectively, which expire from 2023 to 2030. The Company has state investment tax credit carryforwards of $0.3 million and $0.7 million as of January 2, 2016 and December 27, 2014, respectively, which expire from 2024 to 2025. Under the Internal Revenue Code, certain substantial changes in the Company’s ownership could result in an annual limitation on the amount of these tax carryforwards which can be utilized in future years. As of January 2, 2016, the Company has $23.0 million of federal and state net operating loss carryforwards and $2.2 million of federal and state research and development credits related to the acquisition of Evolution Robotics that are limited by Section 382 and Section 383, respectively, of the Internal Revenue Code. However, these limitations are not expected to cause any of these federal and state net operating loss carryforwards or federal and state research and development credits to expire prior to being utilized. The reconciliation of the expected tax (benefit) expense (computed by applying the federal statutory rate to income before income taxes) to actual tax expense was as follows:
| Fiscal Year Ended
| January 2, 2016 |  | December 27, 2014 |  | December 28, 2013
| (In thousands)
Expected federal income tax | $ | 22,040 |  |  | $ | 18,344 |  |  | $ | 11,345 |
Miscellaneous permanent items | 608 |  |  | 691 |  |  | 405 |
State taxes (net of federal benefit) | 982 |  |  | 1,058 |  |  | 867 |
Federal and state credits | (2,767 | ) |  | (1,487 | ) |  | (3,909 | )
Change in valuation allowance | — |  |  | (2,090 | ) |  | — |
Domestic production activities deduction | (2,145 | ) |  | (1,562 | ) |  | (1,168 | )
Settlement of uncertain tax positions | (194 | ) |  | (176 | ) |  | (2,696 | )
Other | 317 |  |  | (172 | ) |  | (70 | )
| $ | 18,841 |  |  | $ | 14,606 |  |  | $ | 4,774 |
A summary of the Company’s adjustments to its gross unrecognized tax benefits in the current year is as follows:
| Fiscal Year Ended
| January 2, 2016 |  | December 27, 2014 |  | December 28, 2013
| (in thousands)
Balance at beginning of period | $ | 2,491 |  |  | $ | 2,618 |  |  | $ | 4,469 |
Increase for tax positions related to the current year | 786 |  |  | 252 |  |  | 355 |
Increase (decrease) for tax positions related to prior years | 3,533 |  |  | (108 | ) |  | 490 |
Decreases for settlements with applicable taxing authorities | — |  |  | (271 | ) |  | (2,696 | )
Decreases for lapses of statute of limitations | (194 | ) |  | — |  |  | — |
Balance at end of period | $ | 6,616 |  |  | $ | 2,491 |  |  | $ | 2,618 |
The Company accrues interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are classified as a component of income tax expense. As of January 2, 2016, December 27, 2014 and December 28, 2013 there were no material accrued interest or penalties. Over the next twelve months, it is reasonably possible that the Company may recognize approximately $0.2 million of previously net unrecognized tax benefits related to U.S. federal, state and foreign tax audits and expiration of the statute of limitations. If all of our unrecognized tax benefits as of January 2, 2016 were to become recognizable in the future, we would record a $2.1 million benefit, inclusive of interest, to the income tax provision, reflective of federal benefit on state items. Included in the Company’s state tax credit carryforwards are unrecognized tax benefits related to stock-based compensation beginning from January 1, 2006 of $0.6 million and $0.5 million as of January 2, 2016 and December 27, 2014, respectively. Included in the Company's state net operating loss carryforwards are unrecognized tax benefits related to stock-based compensation beginning from January 1, 2006 of $1.0 million and $0.7 million as of January 2, 2016 and December 27, 2014, respectively. These unrecognized tax benefits will be credited to additional paid-in capital when they reduce income taxes payable. Therefore, these amounts were not included in the Company’s gross or net deferred tax assets at January 2, 2016 and December 27, 2014. The Company follows the with and without approach for direct and indirect effects of windfall tax deductions.

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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 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 2: 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 Reference 3: 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 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 SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 + Details
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