Income Taxes (Tables)

12 Months Ended

Jan. 02, 2021

Income Taxes

Schedule of income before income taxes

Income before income taxes includes the following components (in thousands):

	Year Ended
	January 2,		December 28,		December 29,
	2021		2019		2018
Domestic	$	(19,491)	$	2,025	$	19,777
Foreign		34,792		47,624		52,384
	$	15,301	$	49,649	$	72,161

Schedule of provision (benefit) for income taxes

The provision (benefit) for income taxes consists of the following (in thousands):

	Year Ended
	January 2,		December 28,		December 29,
	2021		2019		2018
Current:
Domestic	$	1,485	$	(779)	$	(8,843)
Foreign		7,803		8,157		5,888
Total Current		9,288		7,378		(2,955)
Deferred:
Domestic		(4,031)		33,624		(8,978)
Foreign		(2,487)		(10,618)		503
Total Deferred		(6,518)		23,006		(8,475)
Provision (benefit) for income taxes	$	2,770	$	30,384	$	(11,430)

Schedule of reconciliation of federal statutory tax rate to effective tax rate

The reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows:

	Year Ended
	January 2,		December 28,		December 29,
	2021		2019		2018
Federal statutory rate	21.0	%	21.0	%	21.0	%
Foreign tax rate benefit	(19.2)		(14.9)		(14.8)
Research and development tax credits	(50.9)		(15.2)		(9.8)
GILTI and Subpart F income	35.7		4.9		4.1
Nondeductible (nontaxable) foreign items	(1.5)		5.4		4.4
State tax expense	2.6		1.0		1.5
Release of prior year unrecognized tax benefits	—		(0.4)		(2.7)
Nondeductible officer compensation	15.7		4.3		2.4
Change in cost-sharing treatment of stock-based compensation	—		54.8		(2.2)
Excess tax benefit of stock-based compensation	(4.0)		(2.2)		(5.9)
Change in prior period valuation allowance	2.5		1.3		(2.5)
One-time impacts of tax reform	—		(0.5)		(11.5)
Nondeductible (nontaxable) domestic items	14.8		2.8		1.5
Other	1.4		(1.1)		(1.3)
Effective Tax Rate	18.1	%	61.2	%	(15.8)	%

Schedule of significant components of deferred taxes

Significant components of the Company’s deferred taxes as of January 2, 2021 and December 28, 2019 are as follows (in thousands):

	January 2,		December 28,
	2021		2019
Deferred tax assets:
Net operating loss carryforwards	$	6,839	$	7,912
Tax credit carryforwards		22,421		14,755
Stock-based compensation		2,683		2,619
Intangible assets		9,802		7,135
Fixed assets		261		289
Capitalized research and development		1,237		1,735
Deferred income on shipments to distributors		3,099		4,018
Leases		6,335		3,446
Accrued liabilities and other		7,652		7,374
		60,329		49,283
Less: Valuation allowance		(5,311)		(4,486)
		55,018		44,797
Deferred tax liabilities:
Intangible assets		16,758		16,621
Fixed assets		8,473		4,969
Leases		5,999		3,166
Debt		21,674		5,741
Prepaid expenses and other		4,919		2,424
		57,823		32,921
Net deferred tax assets (liabilities)	$	(2,805)	$	11,876

Schedule of valuation allowance

The following table summarizes the activity related to the valuation allowance for deferred tax assets (in thousands):

	Balance at		Additions
	Beginning of		Charged to				Balance at
	Period		Expenses		Deductions		End of Period
Year ended January 2, 2021	$	4,486	$	847	$	(22)	$	5,311
Year ended December 28, 2019	$	4,975	$	1,044	$	(1,533)	$	4,486
Year ended December 29, 2018	$	6,518	$	435	$	(1,978)	$	4,975

Schedule of activity related to gross unrecognized tax benefits

The following table summarizes the activity related to gross unrecognized tax benefits (in thousands):

	Year Ended
	January 2,		December 28,		December 29,
	2021		2019		2018
Beginning balance	$	2,276	$	2,036	$	3,187
Additions based on tax positions related to current year		577		436		630
Additions based on tax positions related to prior years		—		—		115
Reductions based on tax positions related to prior years		—		(196)		—
Reductions for tax positions as a result of a lapse of the applicable statute of limitations		—		—		(1,896)
Ending balance	$	2,853	$	2,276	$	2,036