Income Taxes (Tables)

12 Months Ended

Jan. 01, 2022

Components of income from continuing operations before income taxes

The components of income before provision for income taxes are as follows:


(In thousands)	January 1, 2022		January 2, 2021		December 28, 2019
Domestic	$	26,599	$	14,132	$	93
Foreign	85,453		59,555		68,829
	$	112,052	$	73,687	$	68,922

Components of the provision for income taxes from continuing operations

The components of the provision for income taxes are as follows:


(In thousands)	January 1, 2022		January 2, 2021		December 28, 2019
Current Provision (Benefit):
Federal	$	2,173	$	339	$	(264)
Foreign	25,512		16,800		18,778
State	870		667		335
	28,555		17,806		18,849
Deferred Provision (Benefit):
Federal	1,823		2,146		(453)
Foreign	(3,430)		(2,361)		(1,253)
State	223		357		(785)
	(1,384)		142		(2,491)
	$	27,171	$	17,948	$	16,358

Income tax reconciliation

The provision for income taxes in the accompanying consolidated statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:


(In thousands)	January 1, 2022		January 2, 2021		December 28, 2019
Provision for Income Taxes at Statutory Rate	$	23,531	$	15,474	$	14,474
Increases (Decreases) Resulting From:
Foreign tax rate differential	2,819		1,891		2,584
Nondeductible expenses	1,673		2,117		2,407
Excess tax benefit related to stock-based compensation	(1,525)		(661)		(3,305)
State income taxes, net of federal income tax	863		807		(355)
U.S. tax cost of foreign earnings	481		599		146
Reversal of tax benefit reserves, net	(444)		(730)		(286)
Research and development tax credits	(454)		(465)		(381)
Change in valuation allowance	(31)		(469)		81
Other	258		(615)		993
	$	27,171	$	17,948	$	16,358

Net deferred tax (liability) asset

The Company's net deferred tax liability consists of the following:


(In thousands)	January 1, 2022		January 2, 2021
Deferred Tax Asset:
Net operating loss carryforwards	$	14,162	$	13,719
Lease liabilities	6,393		6,855
Inventory basis difference	4,600		4,576
Employee compensation	4,368		3,189
Reserves and accruals	3,167		3,565
Capitalized research expenses	2,349		2,668
Foreign, state, and alternative minimum tax credit carryforwards	508		472
Allowance for credit losses	420		397
Other	48		213
Deferred tax asset, gross	36,015		35,654
Less: valuation allowance	(9,212)		(9,609)
Deferred tax asset, net	26,803		26,045
Deferred Tax Liability:
Goodwill and intangible assets	(43,780)		(30,166)
Fixed asset basis difference	(6,009)		(4,964)
ROU assets	(5,431)		(5,812)
Provision for unremitted foreign earnings	(559)		(1,233)
Other	(1,819)		(1,574)
Deferred tax liability	(57,598)		(43,749)
Net deferred tax liability	$	(30,795)	$	(17,704)

Unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


(In thousands)	January 1, 2022		January 2, 2021
Unrecognized Tax Benefits, Beginning of Year	$	8,337	$	8,331
Gross Increases—Tax Positions in Prior Periods	2,409		4
Gross Decreases—Tax Positions in Prior Periods	(2,182)		(21)
Gross Increases—Current-period Tax Positions	1,920		1,468
Lapses of Statutes of Limitations	(649)		(1,488)
Currency Translation	(104)		43
Unrecognized Tax Benefits, End of Year	$	9,731	$	8,337