INCOME TAXES (Tables)

12 Months Ended

Jan. 02, 2021

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
	January 2, 2021		December 28, 2019		December 29, 2018
Domestic	$	201,919	$	65,469	$	69,209
Foreign	3,282		1,789		406
Income before income taxes	$	205,201	$	67,258	$	69,615

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
	January 2, 2021		December 28, 2019		December 29, 2018
Current tax expense:
U.S. federal	$	41,884	$	627	$	7,190
State	10,619		1,505		2,316
Foreign	829		526		247
Total current tax expense	53,332		2,658		9,753
Deferred tax expense (benefit):
U.S. federal	(3,332)		12,911		3,298
State	(538)		1,304		(1,172)
Foreign	(62)		(49)		(27)
Total deferred tax expense	(3,932)		14,166		2,099
Total income tax expense	$	49,400	$	16,824	$	11,852

Schedule of reconciliation of income taxes

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


	Fiscal Year Ended
	January 2, 2021		December 28, 2019		December 29, 2018
Income taxes at the statutory rate	$	43,092	$	14,124	$	14,619
Increase (decrease) resulting from:
State income taxes, net of federal tax effect	7,816		2,989		2,030
Nondeductible expenses	63		203		248

Research and development tax credits	(580)		(2,157)		(578)

Tax expense (benefit) related to stock-based compensation	(611)		950		(2,396)

Nondeductible interest expense	—		—		4
Revaluation of deferred tax assets for state income taxes	2		(92)		(1,154)
Other	(382)		807		(921)
Income tax expense	$	49,400	$	16,824	$	11,852

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
	January 2, 2021		December 28, 2019
Deferred tax assets:
Accrued liabilities	$	6,857	$	4,482
Allowances and other reserves	2,979		2,030
Inventory	5,012		1,929
Stock-based compensation	4,796		4,761
Operating lease liabilities	10,714		12,286

Deferred interest	—		1,703
Other	2,360		1,497
Total deferred tax assets	$	32,718	$	28,688
Deferred tax liabilities:
Operating lease assets	$	(8,222)	$	(9,528)
Prepaid expenses	(644)		(1,897)
Property and equipment	(11,425)		(10,971)
Intangible assets	(15,843)		(13,546)
Other	(745)		(744)
Total deferred tax liabilities	(36,879)		(36,686)
Net deferred tax liabilities	$	(4,161)	$	(7,998)
Amounts included in the Consolidated Balance Sheets:
Deferred income taxes	$	1,062	$	1,082
Other liabilities	(5,223)		(9,080)
Net deferred income tax liabilities	$	(4,161)	$	(7,998)

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
	January 2, 2021		December 28, 2019
Balance, beginning of year	$	3,358	$	2,381
Gross increases related to current year tax positions	4,522		987
Gross increases related to prior year tax positions	—		37
Gross decreases related to prior year tax positions	(65)		—
Lapse of statute of limitations	(565)		(47)
Balance, end of year	$	7,250	$	3,358