v3.25.4
Income Taxes (Tables)
 12 Months Ended
Jan. 03, 2026
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Expense (Benefit) Income tax expense (benefit) consisted of the following (in thousands):
2025
2024
2023
Current:
Federal
$428
$6,904
$5,474
State
2,380
1,256
3,106
2,808
8,160
8,580
Deferred:
Federal
24,057
(12,568)
(10,151)
State
9,119
(754)
(2,895)
33,176
(13,322)
(13,046)
Income tax expense (benefit)
$35,984
$(5,162)
$(4,466)
Schedule of Reconciliation of Income Tax Expense (Benefit) at the Statutory Federal Rate The following table is a reconciliation of the U.S. federal statutory tax rate of 21 percent to the Company’s effective tax
rate for the year ended January 3, 2026 in accordance with the guidance in ASU 2023-09, which was adopted
prospectively in 2025.
2025
Statutory federal income tax
$(20,154)
21.0%
State and local income taxes(1)
  State and local income taxes
835
(0.8)
  Changes in valuation allowance
9,512
(9.9)
Tax credits - research and development tax credit
(1,449)
1.5
Changes in valuation allowance
45,006
(46.9)
Nontaxable or nondeductible items
  Stock-based compensation
2,218
(2.3)
  Other
548
(0.7)
Changes in unrecognized tax benefits
(361)
0.4
Other
(171)
0.2
Effective income tax
$35,984
(37.5)%
(1) State taxes in California, Texas and Minnesota make up the majority of the effect of the state and local tax category.
The following table is a reconciliation of the U.S. federal statutory tax rate of 21 percent to our effective tax rate for the
years ended December 28, 2024 and December 30, 2023 prior to the adoption of the guidance in ASU 2023-09
2024
2023
Statutory federal income tax
21.0%
21.0%
State income taxes, net of federal benefit
0.8
(3.5)
R&D tax credits
9.0
14.1
Return to provision
6.2
6.1
Investment tax credit
—
1.1
Stock-based compensation
(9.5)
(6.2)
Non-deductible compensation
(2.6)
(5.7)
Non-deductible expenses
(2.1)
(2.8)
Changes in unrecognized tax benefits
(0.5)
(0.5)
Valuation allowance
(3.0)
—
Other
0.9
(1.0)
Effective income tax rate
20.2%
22.6%
Schedule of Deferred Income Taxes The tax effects of temporary differences that give rise to deferred income taxes were as follows (in thousands):
2025
2024
Deferred tax assets:
Stock-based compensation
$5,243
$7,090
Operating lease liabilities
88,673
97,604
Warranty and returns liabilities
4,139
5,880
Net operating loss carryforwards and credits
11,203
2,327
Compensation and benefits
6,172
7,220
Research and development
11,544
19,017
Interest
19,182
9,503
Other
7,705
4,163
Total gross deferred tax assets
153,861
152,804
Valuation allowance
(55,323)
(806)
Total gross deferred tax assets after valuation allowance
98,538
151,998
Deferred tax liabilities:
Property and equipment
15,302
23,240
Operating lease right-of-use assets
77,923
89,276
Deferred revenue
1,453
2,516
Other
3,461
3,391
Total gross deferred tax liabilities
98,139
118,423
Net deferred tax assets
$399
$33,575
Schedule of Income Taxes Paid In accordance with the guidance in ASU 2023-09 (which was adopted prospectively in 2025), net income tax paid in 2025
to the following jurisdictions were as follows (in thousands):
2025
Cash paid for income taxes, net:
Federal
$7,036
State and local
Texas
700
Illinois
194
Other
694
1,588
Total cash paid for income taxes, net:
$8,624
Schedule of Reconciliations Unrecognized Tax Benefits Reconciliations of the beginning and ending amounts of unrecognized tax benefits were as follows (in thousands):
Federal and State Tax
2025
2024
2023
Beginning balance
$3,658
$3,671
$3,645
Increases related to current-year tax positions
419
639
753
Increases related to prior-year tax positions
121
51
40
Decreases related to prior-year tax positions
—
(15)
—
Lapse of statute of limitations
(957)
(688)
(601)
Settlements with taxing authorities
—
—
(166)
Ending balance
$3,241
$3,658
$3,671