Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES (Tables)

v3.26.1
INCOME TAXES (Tables)
 12 Months Ended
Jan. 03, 2026
Income Tax Disclosure [Abstract]  
Schedule of Consolidated Income Before Income Taxes
Consolidated earnings before income taxes consists of the following:
Year Ended
2025 2024 2023
United States $ (56,248) $ (35,274) $ (19,988)
Foreign 97,775  111,625  122,441 
Total earnings before income taxes $ 41,527  $ 76,351  $ 102,453 
Schedule of Income Tax Expense (Benefit) Included in Income From Continuing Operations
Income tax expense (benefit) included in income from continuing operations consists of the following:
Year Ended
2025 2024 2023
Current
Federal $ —  $ —  $ (42)
State 855  330  469 
Foreign 36,331  40,699  40,913 
Total current 37,186  41,029  41,340 
Deferred
Federal (6,853) (6,803) (4,031)
State (628) (100) (59)
Foreign 345  165  1,415 
Total deferred (7,136) (6,738) (2,675)
$ 30,050  $ 34,291  $ 38,665 
Schedule of Effective Income Tax Rate
The effective tax rate for 2024 and 2023 reconciled to the statutory U.S. federal tax rate is as follows:
Year Ended
2024 2023
Statutory U.S. federal income tax rate 21.0 % 21.0 %
State income taxes, net of federal tax benefit 0.5  0.5 
Permanent tax differences 0.9  0.7 
Excess foreign tax credits (26.3) (16.4)
Net increase in valuation allowance 24.4  13.0 
Foreign income tax rate differences 15.2  8.7 
Foreign withholding taxes 12.3  10.6 
Uncertain tax position reserve 0.6  (0.4)
Change in U.S. tax laws (2.6) — 
All other, net (1.0) — 
44.9 % 37.7 %
The effective tax rate for 2025 is disaggregated and reconciled to the statutory U.S. federal tax rate according to the new requirements of ASU 2023-09 as follows:
Year Ended
2025
Amount Percent
U.S. federal statutory tax rate $ 8,721  21.0%
State and local income taxes, net of federal income tax effect(1)
684  1.6%
Foreign tax effects
China
Statutory income tax rate difference 3,635  8.8%
Withholding taxes 8,293  20.0%
Other 577 1.4%
India
Changes in valuation allowances 469  1.1%
Other (39) (0.1)%
Other foreign jurisdictions 1,303  3.1%
Effects of cross-border tax laws
U.S. taxation of foreign disregarded entities 20,692  49.8%
Tax credits
Foreign tax credits (37,651) (90.6)%
Changes in valuation allowances 21,487  51.7%
Nontaxable and nondeductible items
Share-based payment awards 1,375  3.3%
Non-deductible compensation 513  1.2%
Other (554) (1.2)%
Changes in unrecognized tax benefits 545  1.3%
Effective tax rate $ 30,050  72.4%
______________________________
(1)State and local taxes in New York and California comprise the majority (greater than 50%) of the tax effect in this category.
Schedule of Cash Flow, Supplemental Disclosures
Income taxes paid (net of refunds received) for 2025 were as follows:
Year Ended
2025
U.S. federal $ — 
U.S. state and local 683 
Foreign
China 32,800 
All other foreign 3,697 
36,497 
Total $ 37,180 
Schedule of Deferred Taxes
The significant categories of deferred taxes are as follows:
January 3,
2026		 December 28,
2024
Deferred tax assets
Inventory $ 6,222  $ 4,749 
Accruals not currently deductible 6,543  6,869 
Equity-based compensation 2,304  2,438 
Depreciation and amortization 834  777 
Intangible assets 6,436  6,162 
Foreign currency translation 1,713  2,066 
Capitalized R&D expenses 18,163  16,450 
Tax credit carry forwards 173,927  152,951 
Net operating losses 2,770  2,348 
Other 5,654  5,343 
Gross deferred tax assets 224,566  200,153 
Valuation allowance (178,670) (156,669)
Net deferred tax assets 45,896  43,484 
Deferred tax liabilities
Depreciation and amortization (4,972) (6,653)
Prepaid expenses (1,587) (1,992)
Intangible assets (6,436) (6,162)
Withholding tax on unremitted earnings (7,868) (9,899)
Other (2,716) (3,207)
Gross deferred tax liabilities (23,579) (27,913)
Net deferred taxes $ 22,317  $ 15,571 
The components of net deferred taxes are as follows:
January 3,
2026		 December 28,
2024
Net noncurrent deferred tax assets $ 27,209  $ 19,644 
Net noncurrent deferred tax liabilities (4,892) (4,073)
Net deferred taxes $ 22,317  $ 15,571 
Schedule of Unrecognized Tax Benefits Reconciliation
The following reconciliation provides the changes in unrecognized tax benefits for the years presented:
Year Ended
2025 2024 2023
Beginning balance of unrecognized tax benefits $ 1,187  $ 1,074  $ 1,450 
Increases related to prior year tax positions —  43  30 
Decreases related to prior year tax positions (26) (69) (363)
Increases related to current year tax positions 384  139  409 
Decreases for settlements with taxing authorities —  —  (452)
Ending balance of unrecognized tax benefits $ 1,545  $ 1,187  $ 1,074