Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Components of income from continuing operations before income taxes

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


(In thousands)	December 31, 2022		January 1, 2022		January 2, 2021
Domestic	$	46,558	$	26,599	$	14,132
Foreign	119,078		85,453		59,555
	$	165,636	$	112,052	$	73,687

Components of the provision for income taxes from continuing operations

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


(In thousands)	December 31, 2022		January 1, 2022		January 2, 2021
Current Provision:
Federal	$	8,738	$	2,173	$	339
Foreign	26,032		25,512		16,800
State	1,977		870		667
	36,747		28,555		17,806
Deferred Provision (Benefit):
Federal	1,970		1,823		2,146
Foreign	4,233		(3,430)		(2,361)
State	956		223		357
	7,159		(1,384)		142
	$	43,906	$	27,171	$	17,948

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 of 21% to income before provision for income taxes due to the following:


(In thousands)	December 31, 2022		January 1, 2022		January 2, 2021
Provision for Income Taxes at Statutory Rate	$	34,784	$	23,531	$	15,474
Increases (Decreases) Resulting From:
Foreign tax rate differential	5,770		2,819		1,891
Nondeductible expenses	2,683		1,673		2,117
State income taxes, net of federal income tax	2,316		863		807
Reversal of tax benefit reserves, net	(1,368)		(444)		(730)
U.S. tax cost of foreign earnings	932		481		599
Research and development tax credits	(425)		(454)		(465)
Excess tax benefit related to stock-based compensation	(377)		(1,525)		(661)
Change in valuation allowance	318		(31)		(469)
Other	(727)		258		(615)
	$	43,906	$	27,171	$	17,948

Net deferred tax (liability) asset

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


(In thousands)	December 31, 2022		January 1, 2022
Deferred Tax Asset:
Net operating loss carryforwards	$	13,057	$	14,162
Lease liabilities	6,031		6,393
Inventory basis difference	4,118		4,600
Employee compensation	3,697		4,368
Capitalized research expenses	3,398		2,349
Reserves and accruals	1,949		3,167
Allowance for credit losses	673		420
Foreign, state, and alternative minimum tax credit carryforwards	490		508
Other	122		48
Deferred tax asset, gross	33,535		36,015
Less: valuation allowance	(8,983)		(9,212)
Deferred tax asset, net	24,552		26,803
Deferred Tax Liability:
Goodwill and intangible assets	(41,129)		(43,780)
Fixed asset basis difference	(11,438)		(6,009)
ROU assets	(5,145)		(5,431)
Provision for unremitted foreign earnings	(783)		(559)
Other	(1,976)		(1,819)
Deferred tax liability	(60,471)		(57,598)
Net deferred tax liability	$	(35,919)	$	(30,795)

Unrecognized tax benefits

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


(In thousands)	December 31, 2022		January 1, 2022
Unrecognized Tax Benefits, Beginning of Year	$	9,731	$	8,337
Gross Increases—Tax Positions in Prior Periods	2,116		2,409
Gross Decreases—Tax Positions in Prior Periods	(138)		(2,182)
Gross Increases—Current-period Tax Positions	1,260		1,920
Lapses of Statutes of Limitations	(2,251)		(649)
Currency Translation	(364)		(104)
Unrecognized Tax Benefits, End of Year	$	10,354	$	9,731