Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of Income (loss) from continuing operations, inclusive of equity-method earnings and before income taxes

Income (loss) from continuing operations, inclusive of equity-method earnings and before income taxes, includes the following components (in thousands):

	Year Ended
	December 31,		January 1,		January 2,
	2022		2022		2021
Domestic	$	32,088	$	(15,384)	$	(55,988)
Foreign		97,764		(29,063)		(74,099)
	$	129,852	$	(44,447)	$	(130,087)

Schedule of provision (benefit) for income taxes

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

	Year Ended
	December 31,		January 1,		January 2,
	2022		2022		2021
Current:
Domestic	$	52,834	$	(12,630)	$	(9,740)
Foreign		3,856		9,447		1,656
Total Current		56,690		(3,183)		(8,084)
Deferred:
Domestic		(17,728)		17,873		(4,031)
Foreign		(512)		(1,263)		(2,487)
Total Deferred		(18,240)		16,610		(6,518)
Provision (benefit) for income taxes	$	38,450	$	13,427	$	(14,602)

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
	December 31,		January 1,		January 2,
	2022		2022		2021
Federal statutory rate	21.0	%	21.0	%	21.0	%
Foreign tax rate benefit	(6.2)		(16.4)		(11.1)
Research and development tax credits	(5.3)		0.1		4.2
Return to provision adjustments	(2.0)		0.8		—
Excess tax benefit of stock-based compensation	(1.1)		3.7		0.4
Change in prior period valuation allowance	(0.3)		(10.5)		(0.3)
Net operating loss not benefited	—		(6.0)		—
Nondeductible (nontaxable) domestic items	0.7		(2.8)		(1.4)
State tax expense	1.2		(0.8)		(0.1)
Nondeductible officer compensation	2.0		(10.3)		(1.7)
Nondeductible (nontaxable) foreign items	4.4		(7.2)		(0.2)
GILTI and Subpart F income	16.5		(2.4)		0.6
Other	(1.3)		0.6		(0.2)
Effective tax rate	29.6	%	(30.2)	%	11.2	%

Schedule of significant components of deferred taxes

Significant components of the Company’s deferred taxes as of December 31, 2022 and January 1, 2022 were as follows (in thousands):

	December 31,		January 1,
	2022		2022
Deferred tax assets:
Capitalized research and development	$	15,188	$	981
Tax credit carryforwards		13,334		12,247
Intangible assets		7,938		8,687
Accrued liabilities		6,809		6,078
Deferred income on shipments to distributors		6,726		4,588
Leases		5,517		6,033
Net operating loss carryforwards		4,965		5,803
Other		7,118		3,199
		67,595		47,616
Less: Valuation allowance		(9,409)		(9,529)
		58,186		38,087
Deferred tax liabilities:
Intangible assets		13,789		14,479
Fixed assets		8,518		8,692
Prepaid expenses and other		5,460		6,049
Leases		5,189		5,664
Unrealized gain on equity-method investment		4,120		3,342
Debt		177		16,399
		37,253		54,625
Net deferred tax assets (liabilities)	$	20,933	$	(16,538)

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 December 31, 2022	$	9,529	$	792	$	(912)	$	9,409
Year ended January 1, 2022	$	5,311	$	5,370	$	(1,152)	$	9,529
Year ended January 2, 2021	$	4,486	$	847	$	(22)	$	5,311

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
	December 31,		January 1,		January 2,
	2022		2022		2021
Beginning balance	$	3,677	$	2,853	$	2,276
Additions based on tax positions related to current year		872		830		577
Reductions based on tax positions related to prior years		(6)		(6)		—
Reductions for tax positions as a result of a lapse of the applicable statute of limitations		(434)		—		—
Ending balance	$	4,109	$	3,677	$	2,853