INCOME TAXES (Tables)

12 Months Ended

Dec. 28, 2019

Schedule of components of income before income taxes

The components of income before income taxes were as follows for the periods indicated (in thousands):


	Fiscal Year Ended
	December 28, 2019		December 29, 2018		December 30, 2017
Domestic	$	65,469	$	69,209	$	31,927
Foreign	1,789		406		132
Income before income taxes	$	67,258	$	69,615	$	32,059

Schedule of components of income tax expense

The components of income tax expense were as follows for the periods indicated (in thousands):


	Fiscal Year Ended
	December 28, 2019		December 29, 2018		December 30, 2017
Current tax expense:
U.S. federal	$	627	$	7,190	$	7,440
State	1,505		2,316		379
Foreign	526		247		46
Total current tax expense	2,658		9,753		7,865
Deferred tax expense (benefit):
U.S. federal	12,911		3,298		8,915
State	1,304		(1,172)		(114)
Foreign	(49)		(27)		(8)
Total deferred tax expense	14,166		2,099		8,793
Total income tax expense	$	16,824	$	11,852	$	16,658

Schedule of reconciliation of income taxes

A reconciliation of income taxes computed at the statutory federal income tax rate of 21% in 2019 and 2018 and 35% in 2017 to the effective income tax rate is as follows for the periods indicated (in thousands):


	Fiscal Year Ended
	December 28, 2019		December 29, 2018		December 30, 2017
Income taxes at the statutory rate	$	14,124	$	14,619	$	11,223
Increase (decrease) resulting from:
State income taxes, net of federal tax effect	2,989		2,030		212
Nondeductible expenses	203		248		180
Domestic production activities deduction	—		—		(121)
Research and development tax credits	(2,157)		(578)		(656)
Nontaxable income attributable to noncontrolling interest	—		—		223
Tax expense (benefit) related to stock-based compensation	950		(2,396)		(803)
Enactment of the Tax Act	—		—		5,737
Nondeductible interest expense	—		4		637
Revaluation of deferred tax assets for state income taxes	(92)		(1,154)		(36)
Other	807		(921)		62
Income tax expense	$	16,824	$	11,852	$	16,658

Schedule of deferred tax assets and liabilities

Deferred tax assets and liabilities consisted of the following for the periods indicated (in thousands):


	Fiscal Year Ended
	December 28, 2019		December 29, 2018
Deferred tax assets:
Accrued liabilities	$	4,482	$	3,943
Allowances and other reserves	2,030		1,683
Inventory	1,929		5,472
Stock-based compensation	4,761		14,085
Operating lease liabilities	12,286		—
Deferred rent	—		2,657
Deferred interest	1,703		—
Other	1,497		1,719
Total deferred tax assets	$	28,688	$	29,559
Deferred tax liabilities:
Operating lease assets	$	(9,528)	$	—
Prepaid expenses	(1,897)		(782)
Property and equipment	(10,971)		(8,433)
Intangible assets	(13,546)		(11,857)
Other	(744)		(710)
Total deferred tax liabilities	(36,686)		(21,782)
Net deferred tax (liabilities) assets	$	(7,998)	$	7,777
Amounts included in the Consolidated Balance Sheets:
Deferred income taxes	$	1,082	$	7,777
Other liabilities	(9,080)		—
Net deferred income tax (liabilities) assets	$	(7,998)	$	7,777

Summary of unrecognized tax benefits (excluding interest and penalties)

The following table summarizes the activity related to our unrecognized tax benefits for the periods indicated (excluding interest and penalties) (in thousands):


	Fiscal Year Ended
	December 28, 2019		December 29, 2018
Balance, beginning of year	$	2,381	$	1,064
Gross increases related to current year tax positions	987		1,350
Gross increases related to prior year tax positions	37		—
Gross decreases related to prior year tax positions	—		(14)
Lapse of statute of limitations	(47)		(19)
Balance, end of year	$	3,358	$	2,381