v3.26.1
Income Taxes
 3 Months Ended
Apr. 03, 2026
Income Taxes [Abstract]  
INCOME TAXES

17. INCOME TAXES

 

The Company’s domestic and foreign net income before provision for income taxes for three months ended April 3, 2026 consists of the following:

 

    Three Months Ended
April 3,
2026		  
Domestic   $ 4,358  
Foreign     14  
Total   $ 4,372  

 

The Company’s income tax provision for three months ended April 3, 2026 consists of the following:

 

    Three Months Ended
April 3,
2026		  
Current      
Federal   $ —  
State     51  
Foreign     —  
Total current     51  
Deferred        
Federal     4,637  
State     106  
Foreign     (84 )
Total deferred     4,659  
Total income tax provision   $ 4,710  

 

The approximate tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows:

 

    April 3,
2026		  
Deferred tax assets:      
Lease liabilities   $ 2,346  
Accrued expenses and other reserves     1,535  
Tax credits     836  
Deferred revenue     722  
Stock-based compensation     329  
Other     186  
Total deferred tax assets     5,954  
Deferred tax liabilities:        
Excess of book over tax basis of fixed assets     (7,093 )
Right-of-use assets     (2,254 )
Unrealized gains     (838 )
Intangible assets     (320 )
Other     (185 )
Total deferred tax liabilities     (10,690 )
Net deferred tax liabilities   $ (4,736 )

 

The amounts recorded as deferred tax assets as of April 3, 2026 represent the amount of tax benefits of existing deductible temporary differences that are more likely than not to be realized through the generation of sufficient future taxable income. The Company had gross deferred tax assets of approximately $5.9 million as of April 3, 2026, which it believes are more likely than not to be realized. Management reviews the recoverability of deferred tax assets during each reporting period.

 

The actual tax provision for the three months ended April 3, 2026 differs from that derived from using a U.S federal statutory rate of 21% to income before income tax expense as follows:

 

    Three Months Ended
April 3, 2026		  
U.S. federal statutory rate   $ 918       21.0 %
Increase (decrease) in income taxes resulting from:                
State and local income tax, net of federal income tax effect     32       0.7  
Foreign tax effects:                
Germany     14       0.3  
Effect of changes in tax laws or rates enacted in the current period (net deferred tax liabilities established in connection with the Reorganization)     3,533       80.8  
Effect of cross-border tax laws:                
Global Intangible low-taxed income     7       0.2  
Foreign-derived intangible income     (68 )     (1.6 )
Nontaxable or nondeductible items:                
Tax credits     (140 )     (3.2 )
Stock-based compensation     75       1.7  
Other reconciling items     339       7.8  
Effective tax rate   $ 4,710       107.7 %

 

The state and local tax jurisdiction that makes up the majority of the effect of the state and local income tax line item in 2026 is Massachusetts. The Company files income tax returns in the U.S. federal, state, and certain non-U.S. jurisdictions. The Company is subject to U.S. federal and state income tax examinations by authorities for tax years ending after December 31, 2021. The Company is subject to income tax examinations by authorities in its non-U.S. jurisdictions for tax years ending after December 31, 2020.