Income Taxes (Tables)

12 Months Ended

Jul. 01, 2022

Components of Income Before Income Taxes and Income Tax Expense (Benefit)

The components of income before income taxes and income tax provision (benefit) were as follows:


	Fiscal Years
	2022		2021		2020
Income (loss) before income taxes:
United States	$	24,286	$	85,101	$	93,388
Foreign	(5,891)		(7,928)		545
	$	18,395	$	77,173	$	93,933
Tax provision (benefit):
Federal:
Current	$	3,857	$	12,157	$	8,442
Deferred	(230)		(995)		(1,077)
	3,627		11,162		7,365
State:
Current	3,626		6,271		3,407
Deferred	(2,721)		(2,689)		(2,327)
	905		3,582		1,080
Foreign:
Current	2,535		435		475
Deferred	53		(50)		(699)
	2,588		385		(224)
	$	7,120	$	15,129	$	8,221

Reconciliation Between Statutory Federal Income Tax Rate and Effective Income Tax Rate from Continuing Operations

The following is the reconciliation between the statutory Federal income tax rate and the Company’s effective income tax rate:


	Fiscal Years
	2022		2021		2020
Tax provision at federal statutory rates	21.0	%	21.0	%	21.0	%
State income tax, net of federal tax benefit	8.1		6.7		6.1
Research and development tax credits	(39.5)		(10.9)		(11.9)
Provision to return	10.3		(1.3)		(3.1)

Excess tax provision (benefit) related to stock compensation	5.3		(3.7)		(7.7)



Foreign income tax rate differential	2.3		0.9		0.1
Non-deductible compensation	20.9		3.6		2.6



Acquisition costs	1.2		0.4		—
Reserves for unrecognized income tax benefits	5.4		1.3		3.0
Tax rate changes	—		—		(0.5)

Valuation allowance	4.3		1.9		—
Other	(0.6)		(0.3)		(0.8)
	38.7	%	19.6	%	8.8	%

Components of Net Deferred Tax Assets (Liabilities)

The components of the Company’s net deferred tax liabilities were as follows:


	As of
	July 1, 2022		July 2, 2021
Deferred tax assets:
Inventory valuation and receivable allowances	17,248		15,039
Accrued compensation	5,970		5,421
Stock compensation	6,154		4,548
Federal and state tax credit carryforwards	20,294		17,405

Other accruals	1,503		994
Deferred compensation	930		930

Acquired net operating loss carryforward	5,275		10,487
Foreign net operating loss carryforward	1,859		1,703
Operating lease liabilities	21,988		21,889
Deferred revenue	743		2,899

Other	307		734
	82,271		82,049
Valuation allowance	(15,349)		(15,257)
Total deferred tax assets	66,922		66,792
Deferred tax liabilities:
Prepaid expenses	(1,815)		(984)
Property and equipment	(19,766)		(17,734)
Intangible assets	(59,628)		(58,839)
Operating lease right-of-use assets	(17,985)		(17,987)
Other	(126)		(58)
Total deferred tax liabilities	(99,320)		(95,602)
Net deferred tax liabilities	$	(32,398)	$	(28,810)

As reported:


Deferred tax liabilities	$	(32,398)	$	(28,810)
	$	(32,398)	$	(28,810)

Summary of Reserves for Unrecognized Income Tax Benefits

The changes in the Company’s income tax reserves for gross unrecognized income tax benefits, including interest and penalties, are summarized as follows:


	Fiscal Years
	2022		2021
Unrecognized tax benefits, beginning of period	$	7,467	$	4,117
Increases for tax positions taken related to a prior period	160		113
Increases for tax positions taken during the current period	990		917
Increases for tax positions taken by an acquired company	615		2,348
Decreases for tax positions taken related to a prior period	—		(27)
Decreases for tax positions taken during current period	—		—
Decreases for settlements of previously recognized positions	(92)		—
Decreases as a result of a lapse of the applicable statute of limitations	(28)		(1)


Unrecognized tax benefits, end of period	$	9,112	$	7,467