INCOME TAXES (Tables)

12 Months Ended

Jan. 01, 2022

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 1, 2022		January 2, 2021		December 28, 2019
Domestic	$	262,182	$	201,919	$	65,469
Foreign	6,228		3,282		1,789
Income before income taxes	$	268,410	$	205,201	$	67,258

Schedule of Components of Income Tax Expense (Benefit)

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


	Fiscal Year Ended
	January 1, 2022		January 2, 2021		December 28, 2019
Current tax expense:
U.S. federal	$	37,963	$	41,884	$	627
State	11,018		10,619		1,505
Foreign	1,726		829		526
Total current tax expense	50,707		53,332		2,658
Deferred tax expense (benefit):
U.S. federal	4,770		(3,332)		12,911
State	540		(538)		1,304
Foreign	(209)		(62)		(49)
Total deferred tax expense	5,101		(3,932)		14,166
Total income tax expense	$	55,808	$	49,400	$	16,824

Schedule of Effective Income Tax Rate Reconciliation

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 1, 2022		January 2, 2021		December 28, 2019
Income taxes at the statutory rate	$	56,366	$	43,092	$	14,124
Increase (decrease) resulting from:
State income taxes, net of federal tax effect	8,562		7,816		2,989

Foreign-derived intangible income	(3,056)		(1,046)		(159)
Research and development tax credits	(630)		(580)		(2,157)

Tax expense (benefit) related to stock-based compensation	(7,259)		(611)		950



Other	1,825		729		1,077
Income tax expense	$	55,808	$	49,400	$	16,824

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 1, 2022		January 2, 2021
Deferred tax assets:
Accrued liabilities	$	7,188	$	6,857
Allowances and other reserves	3,350		2,979
Inventory	4,990		5,012
Stock-based compensation	4,298		4,796
Operating lease liabilities	16,201		10,714


Other	3,225		2,360
Total deferred tax assets	$	39,252	$	32,718
Deferred tax liabilities:
Operating lease assets	$	(13,516)	$	(8,222)
Prepaid expenses	(1,602)		(644)
Property and equipment	(15,180)		(11,425)
Intangible assets	(18,180)		(15,843)
Other	(92)		(745)
Total deferred tax liabilities	(48,570)		(36,879)
Net deferred tax liabilities	$	(9,318)	$	(4,161)
Amounts included in the Consolidated Balance Sheets:
Deferred income taxes	$	1,602	$	1,062
Other liabilities	(10,920)		(5,223)
Net deferred income tax liabilities	$	(9,318)	$	(4,161)

Schedule of Unrecognized Tax Benefits

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 1, 2022		January 2, 2021
Balance, beginning of year	$	7,250	$	3,358
Gross increases related to current year tax positions	4,070		4,522

Gross decreases related to prior year tax positions	(100)		(65)
Lapse of statute of limitations	(107)		(565)
Balance, end of year	$	11,113	$	7,250