Income Taxes (Tables)

12 Months Ended

Jan. 01, 2021

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Income from continuing operations before provision (benefit) for income taxes was as follows (in thousands):

	Years Ended
	2020			2019			2018
Domestic	$	(16,245	)	$	(5,321	)	$	(2,629	)
Foreign		24,512			18,347			9,268
Income before income taxes	$	8,267		$	13,026		$	6,639

Schedule of Components of Income Tax Expense (Benefit)

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

	Years Ended
	2020			2019			2018
Current tax provision:
U.S. federal	$	2		$	—		$	—
State		15			13			10
Foreign		3,186			2,446			1,220
Total current provision		3,203			2,459			1,230
Deferred tax provision (benefit):
U.S. federal		(573	)		(3,003	)		—
State		78			(373	)		—
Foreign		(354	)		(105	)		441
Total deferred provision (benefit)		(849	)		(3,481	)		441
Provision (benefit) for income taxes	$	2,354		$	(1,022	)	$	1,671

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the statutory U.S. federal tax rate to the Company’s effective tax rate was as follows (dollars in thousands):

	Years Ended
	2020						2019						2018
	Rate			Amount			Rate			Amount			Rate			Amount
Computed provision for taxes based    on income at statutory rate		21.0	%	$	1,736			21.0	%	$	2,735			21.0	%	$	1,394
Increase (decrease) in taxes resulting from:
Permanent differences		0.4	%		29			0.5	%		60			0.5	%		34
State taxes, net of federal income    tax benefit		0.9	%		74			(2.2	)%		(284	)		0.1	%		8
State tax benefit		(16.9	)%		(1,397	)		0.7	%		93			(6.7	)%		(447	)
Foreign tax differential		(27.9	)%		(2,304	)		(11.6	)%		(1,514	)		(11.0	)%		(730	)
Expiration of state net operating tax loss    carryforwards		3.2	%		268			8.0	%		1,039			—			—
Foreign earnings not permanently    reinvested, net of the participation    exemption		(0.1	)%		(5	)		(0.1	)%		(7	)		(14.0	)%		(926	)
Foreign dividend withholding		—			—			—			—			4.8	%		317
ASC 718 share based payment adjustment		5.8	%		476			—			—			(6.5	)%		(434	)
Incentive stock option compensation		(59.4	)%		(4,907	)		(0.4	)%		(55	)		(12.7	)%		(842	)
Non-qualified stock option and restricted   stock tax deduction in excess of   cumulative book deduction		(52.3	)%		(4,324	)		(12.9	)%		(1,679	)		(12.7	)%		(842	)
Executive compensation Section 162(m) limitation		43.0	%		3,552			4.4	%		569			0.9	%		60
GILTI inclusion		54.0	%		4,461			25.9	%		3,372			26.8	%		1,780
Other		(2.5	)%		(204	)		0.9	%		121			0.5	%		30
Valuation allowance		59.3	%		4,899			(42.0	)%		(5,472	)		34.2	%		2,269
Effective tax provision (benefit)		28.5	%	$	2,354			(7.8	)%	$	(1,022	)		25.2	%	$	1,671

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets (liabilities) at January 1, 2021 and January 3, 2020 were as follows (in thousands):

	2020			2019
Deferred tax assets:
Allowance for doubtful accounts and sales returns	$	357		$	233
Inventories		691			703
Accrued vacation		599			428
Accrued other expenses		786			1,036
Stock-based compensation		3,277			2,859
Pensions		1,679			1,159
Depreciation and amortization		—			162
Net operating loss carryforwards		38,642			32,251
Business, foreign, AMT and R&D credit carryforwards		3,051			3,164
Prepaid expenses		280			272
Capitalized R&D		1,000			986
Operating lease liability		1,687			1,309
Other		19			5
Valuation allowance		(42,502	)		(37,007	)
Total deferred tax assets	$	9,566		$	7,560
Deferred tax liabilities:
Foreign tax withholding	$	(1,295	)	$	(1,295	)
Operating lease ROU assets		(1,662	)		(1,309	)
Depreciation and amortization		(424	)		—
Amortization of R&D		(846	)		(805	)
Net foreign earnings not permanently reinvested		(617	)		(401	)
Total deferred tax liabilities		(4,844	)		(3,810	)
Total net deferred tax assets	$	4,722		$	3,750

Summary of Income Tax Examinations

The following tax years remain subject to examination:

Significant jurisdictions	Open Years
U.S. Federal	2017 – 2019
California	2016 – 2019
Switzerland	2019
Japan	2018 – 2019