Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

The provision for income taxes on loss from continuing operations for fiscal 2016, 2015 and 2014 consists of the following (in thousands):


	2016		2015			2014
Federal:
Current	$	—	$	—		$	(324	)
Deferred		—		—			—

		—		—			(324	)
State:
Current		5		6			5
Deferred		—		—			—

		5		6			5
Foreign:
Current		237		561			81
Deferred		9		(12	)		8,666

		246		549			8,747
Total	$	251	$	555		$	8,428

Income (Loss) Before Income Taxes

Income (loss) before income taxes for fiscal 2016, 2015 and 2014 consisted of the following (in thousands):


	2016			2015			2014
U.S	$	(8,703	)	$	(9,538	)	$	(13,191	)
Foreign		1,513			927			(5,826	)

	$	(7,190	)	$	(8,611	)	$	(19,017	)

Effective tax rate		(3.5	)%		(6.4	)%		(44.3	)%

Significant Components of Deferred Tax Assets

Significant components of deferred tax assets are as follows (in thousands):


	December 31, 2016			January 2, 2016
Deferred tax assets:
Vacation, warranty and other accruals	$	926		$	898
Depreciation and amortization		600			814
Intangible amortization		2,060			2,397
Inventory valuation		3,091			3,321
Deferred income		29			750
Equity-based compensation		3,821			3,612
Net operating loss, research and other tax credit carryforwards		54,844			51,186
Other		918			481

		66,289			63,459
Valuation allowance for deferred tax assets		(65,189	)		(62,365	)

Total deferred tax assets		1,100			1,094

Deferred tax liabilities:
Purchased technology		(720	)		(950	)
Unbilled revenue		(377	)		(132	)

Total deferred tax liabilities		(1,097	)		(1,082	)

Net deferred tax assets	$	3		$	12

As reported on the balance sheet:
Current deferred tax assets	$	—		$	12
Non-current deferred tax assets		3			—

	$	3		$	12

Difference Between Tax Provision (Benefit) at Statutory Federal Income Tax Rate and Tax Provision

The difference between the tax provision (benefit) at the statutory federal income tax rate and the tax provision (benefit) for fiscal 2016, 2015 and 2014 was as follows (in thousands):


	2016			2015			2014
Income tax (benefit) at the federal statutory rate	$	(2,517	)	$	(3,014	)	$	(6,656	)
State income taxes, net of federal benefit		5			6			5
Change in valuation allowance:
U.S		3,333			1,625			4,733
Foreign		(136	)		631			9,394
Effect of foreign operations taxed at various rates		(232	)		(140	)		1,662
Research tax credits		(1,058	)		(931	)		(569	)
Effect of tax rate changes, permanent differences and adjustments of prior deferrals		1,137			2,114			153
Unrecognized tax benefits		(281	)		264			(294	)

Total	$	251		$	555		$	8,428

Aggregate Changes in Balance of Gross Unrecognized Tax Benefits

The aggregate changes in the balance of gross unrecognized tax benefits were as follows for fiscal 2016, 2015 and 2014:


	2016			2015		2014
	(in thousands)
Beginning balance	$	7,173		$	6,578	$	6,482
Additions based on tax positions related to the current year		652			574		57
Additions for tax positions of prior years		—			21		250
Settlements		(281	)		—		—
Lapse of statute of limitations		—			—		(211	)

Ending balance	$	7,544		$	7,173	$	6,578