Income Taxes (Tables)
|
12 Months Ended |
Jun. 28, 2026 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Summary of Income Before Income Tax and Non-controlling Interest |
The income tax provisions were calculated based upon the following components of income before income tax and non-controlling interest (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended |
|
|
|
June 28, 2026 |
|
|
June 29, 2025 |
|
|
June 30, 2024 |
|
Income before income tax and non-controlling interest: |
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
22,265 |
|
|
$ |
18,570 |
|
|
$ |
11,766 |
|
Foreign |
|
|
10,697 |
|
|
|
6,066 |
|
|
|
8,437 |
|
|
|
$ |
32,962 |
|
|
$ |
24,636 |
|
|
$ |
20,203 |
|
|
| Summary of Income Tax Expense |
Income tax expense is summarized as following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended |
|
|
|
June 28, 2026 |
|
|
June 29, 2025 |
|
|
June 30, 2024 |
|
Current: |
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
1,085 |
|
|
$ |
4,726 |
|
|
$ |
4,466 |
|
State |
|
|
238 |
|
|
|
336 |
|
|
|
619 |
|
Foreign |
|
|
6,453 |
|
|
|
2,545 |
|
|
|
3,401 |
|
|
|
|
7,776 |
|
|
|
7,607 |
|
|
|
8,486 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
Federal |
|
|
3,079 |
|
|
|
(1,103 |
) |
|
|
(3,988 |
) |
State |
|
|
331 |
|
|
|
(138 |
) |
|
|
(538 |
) |
Foreign |
|
|
153 |
|
|
|
(649 |
) |
|
|
(185 |
) |
|
|
|
3,563 |
|
|
|
(1,890 |
) |
|
|
(4,711 |
) |
|
|
$ |
11,339 |
|
|
$ |
5,717 |
|
|
$ |
3,775 |
|
|
| Reconciliation at the Federal Statutory Rate to the Effective Tax Rate |
The table below provides the required disclosures for fiscal 2026 related to the Company's effective tax rate. See Note 2 Summary of Significant Accounting Policies — Recently Issued Accounting Standards for additional details on the adoption of ASU 2023-09, Income Taxes. Income tax provision differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate for the years ended June 28, 2026, due to the following items (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
June 28, 2026 |
|
|
Percent of Pre-tax Income |
|
Income taxes at U.S. federal statutory rate |
|
$ |
6,922 |
|
|
|
21.0 |
% |
State taxes, net of federal benefit1 |
|
|
520 |
|
|
|
1.6 |
|
Foreign tax effects |
|
|
|
|
|
|
Mexico |
|
|
|
|
|
|
Statutory rate differential |
|
|
963 |
|
|
|
2.9 |
|
Withholding taxes |
|
|
454 |
|
|
|
1.4 |
|
Other |
|
|
(141 |
) |
|
|
(0.4 |
) |
Effect of cross-border tax laws |
|
|
|
|
|
|
Mexico advanced pricing agreement |
|
|
(836 |
) |
|
|
(2.5 |
) |
U.S. taxes on foreign branch |
|
|
687 |
|
|
|
2.1 |
|
Other |
|
|
(229 |
) |
|
|
(0.7 |
) |
Tax credits |
|
|
|
|
|
|
Research and development credits |
|
|
(975 |
) |
|
|
(3.0 |
) |
Non-taxable or non-deductible items |
|
|
|
|
|
|
Non-controlling interest |
|
|
(385 |
) |
|
|
(1.2 |
) |
Share-based payment awards |
|
|
(453 |
) |
|
|
(1.4 |
) |
Officer compensation limitation |
|
|
546 |
|
|
|
1.7 |
|
Other |
|
|
175 |
|
|
|
0.5 |
|
Changes in unrecognized tax benefits |
|
|
2,993 |
|
|
|
9.1 |
|
Changes in valuation allowance |
|
|
1,027 |
|
|
|
3.1 |
|
Other |
|
|
71 |
|
|
|
0.2 |
|
Income tax expense |
|
$ |
11,339 |
|
|
|
34.4 |
% |
1 State taxes in Michigan made up the majority (greater than 50%) of the tax effect in this category. The reconciliation of taxes at the Federal statutory rate to our provision for income taxes for the years ended June 29, 2025 and June 30, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:
|
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|
|
|
|
|
|
|
|
|
Years Ended |
|
|
|
June 29, 2025 |
|
|
June 30, 2024 |
|
Federal statutory rate |
|
|
21.0 |
% |
|
|
21.0 |
% |
State taxes, net of federal tax benefit |
|
|
1.0 |
|
|
|
2.7 |
|
Foreign subsidiaries |
|
|
(1.7 |
) |
|
|
5.4 |
|
China non-resident capital gain tax |
|
|
— |
|
|
|
(1.6 |
) |
Valuation allowance |
|
|
4.9 |
|
|
|
2.6 |
|
Return to provision adjustment |
|
|
1.1 |
|
|
|
(6.1 |
) |
Research and development tax credit |
|
|
(6.0 |
) |
|
|
(8.1 |
) |
Non-controlling interest |
|
|
0.4 |
|
|
|
2.3 |
|
Stock-based compensation |
|
|
(0.1 |
) |
|
|
0.7 |
|
Other |
|
|
2.6 |
|
|
|
(0.2 |
) |
Effective income tax rate |
|
|
23.2 |
% |
|
|
18.7 |
% |
|
| Cash Paid for Income Taxes (Net of Refunds) |
Cash paid for income taxes (net of refunds) for the year ended June 28, 2026 is as follows (in thousands):
|
|
|
|
|
|
|
Year Ended |
|
|
|
June 28, 2026 |
|
Federal |
|
$ |
2,071 |
|
State |
|
|
31 |
|
Foreign: |
|
|
|
Mexico |
|
|
2,644 |
|
|
|
$ |
4,746 |
|
|
| Reconciliation of Unrecognized Tax Benefits |
The reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended |
|
|
|
June 28, 2026 |
|
|
June 29, 2025 |
|
|
June 30, 2024 |
|
Unrecognized tax benefits, beginning of year |
|
$ |
1,669 |
|
|
$ |
1,417 |
|
|
$ |
1,395 |
|
Increases for tax positions taken in prior years |
|
|
1,860 |
|
|
|
— |
|
|
|
41 |
|
Decreases for tax positions taken in prior years |
|
|
(189 |
) |
|
|
(6 |
) |
|
|
(59 |
) |
Increases for tax positions taken in current year |
|
|
284 |
|
|
|
492 |
|
|
|
427 |
|
Lapse of statutes |
|
|
(305 |
) |
|
|
(234 |
) |
|
|
(387 |
) |
Unrecognized tax benefits, end of year |
|
$ |
3,319 |
|
|
$ |
1,669 |
|
|
$ |
1,417 |
|
|
| Components of Deferred Tax (Liabilities) Assets |
|
|
|
|
|
|
|
|
|
|
|
Years Ended |
|
|
|
June 28, 2026 |
|
|
June 29, 2025 |
|
Deferred tax assets: |
|
|
|
|
|
|
Research and development costs |
|
$ |
6,163 |
|
|
$ |
10,396 |
|
Compensation and employee benefits |
|
|
7,456 |
|
|
|
6,472 |
|
Other accrued expenses |
|
|
4,094 |
|
|
|
4,871 |
|
Capital loss and credit carryforwards |
|
|
5,656 |
|
|
|
4,923 |
|
Lease liabilities |
|
|
552 |
|
|
|
739 |
|
Other |
|
|
1,678 |
|
|
|
1,296 |
|
Gross deferred tax assets |
|
|
25,599 |
|
|
|
28,697 |
|
Valuation allowance |
|
|
(4,445 |
) |
|
|
(3,865 |
) |
Net deferred tax assets |
|
|
21,154 |
|
|
|
24,832 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
Property, plant and equipment |
|
|
(3,565 |
) |
|
|
(3,167 |
) |
Lease right of use assets |
|
|
(484 |
) |
|
|
(662 |
) |
Other |
|
|
(1,025 |
) |
|
|
(1,472 |
) |
Gross deferred tax liabilities |
|
|
(5,074 |
) |
|
|
(5,301 |
) |
Net deferred tax assets |
|
$ |
16,080 |
|
|
$ |
19,531 |
|
|