Income Taxes

12 Months Ended

Dec. 27, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 9 — Income Taxes

Provision for Income Taxes

Income (loss) from continuing operations before provision for income taxes was as follows (in thousands):

	Years Ended
	2024			2023			2022
Domestic	$	(52,859	)	$	(46,388	)	$	(25,366	)
Foreign		43,807			80,084			70,918
Income (loss) before income taxes	$	(9,052	)	$	33,696		$	45,552

The provision for income taxes consisted of the following (in thousands):

	Years Ended
	2024			2023			2022
Current tax provision:
U.S. federal	$	—		$	—		$	—
State		27			21			—
Foreign		7,539			9,064			8,141
Total current provision		7,566			9,085			8,141
Deferred tax provision (benefit):
U.S. federal		3,738			3,306			(1,821	)
State		137			12			82
Foreign		(285	)		(54	)		(515	)
Total deferred provision (benefit)		3,590			3,264			(2,254	)
Provision for income taxes	$	11,156		$	12,349		$	5,887

A reconciliation of the statutory U.S. federal tax rate to the Company’s effective tax rate was as follows (dollars in thousands):

	Years Ended
	2024			2023			2022
	Amount			Amount			Amount
Income (loss) before income taxes	$	(9,052	)	$	33,696		$	45,552
Income tax expense:
Taxes at federal statutory tax rate		(1,901	)		7,076			9,566
State taxes, net of federal income tax benefit		(330	)		440			3,673
Equity compensation		2,237			1,035			(331	)
Foreign rate differential		(3,902	)		(7,611	)		(6,997	)
Foreign income inclusion		9,659			16,922			14,583
Net operating loss adjustments		—			—			532
Valuation allowance		4,060			(4,233	)		(15,560	)
Tax credits		(277	)		(930	)		(39	)
Return to provision adjustment		100			(284	)		314
Uncertain tax positions		1,450			—			—
Non-deductible expenses		163			134			108
Other		(103	)		(200	)		38
Total income tax expense	$	11,156		$	12,349		$	5,887
Effective tax rate		(123.2	)%		36.6	%		12.9	%

Note 9 — Income Taxes (Continued)

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) were as follows (in thousands):

	2024			2023
Deferred tax assets:
Accrued expenses	$	1,230		$	1,435
Stock-based compensation		6,103			4,010
Operating lease liability		6,466			6,162
Net operating loss and other credit carryforwards		44,083			44,998
Other deferred tax assets		2,776			2,376
Gross deferred tax assets		60,658			58,981
Valuation allowance		(46,804	)		(42,744	)
Total deferred tax assets	$	13,854		$	16,237
Deferred tax liabilities:
Property, plant, equipment and intangibles	$	(5,976	)	$	(4,222	)
Operating lease ROU assets		(6,066	)		(6,019	)
Foreign taxes		(1,321	)		(1,883	)
Total deferred tax liabilities		(13,363	)		(12,124	)
Total net deferred tax assets	$	491		$	4,113

The ultimate realization of deferred tax assets is dependent upon future generation of income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the projected future income and tax planning strategies in making this assessment. In addition, management considers all other available positive and negative evidence in its analysis. This includes existing profits in foreign jurisdiction as well as projected future profits. Under the incremental cash tax savings approach, the total net deferred assets represent the Company’s net cash tax savings and benefit at December 27, 2024.

Under the incremental cash tax savings approach, the deferred tax asset valuation allowance activity was as follows (in thousands):

	Years Ended
	2024			2023			2022
Balance at beginning of period	$	(42,744	)	$	(46,977	)	$	(62,860	)
Release (recapture) due to incremental cash tax savings		(4,456	)		(3,318	)		910
Current year change due to deferred tax asset realization		396			7,551			14,973
Balance at end of period	$	(46,804	)	$	(42,744	)	$	(46,977	)

As of December 27, 2024, the Company had U.S. net operating loss (“NOL”) carryforwards consisting of the following (in thousands):

	2024		Expiration Date
Pre-2018 federal NOL carryforwards	$	49,783	will begin to expire in 2027
Post-2018 federal NOL carryforwards		124,895	indefinite
State NOL carryforwards		54,184	will begin to expire in 2025
Post-2020 State NOL carryforwards that follow the federal NOL		2,297	indefinite

Note 9 — Income Taxes (Continued)

Deferred Tax Assets and Liabilities (Continued)

As of December 27, 2024, the Company had U.S. tax credit carryforwards consisting of the following (in thousands):

	2024		Expiration Date
Federal credit carryforwards	$	2,056	will begin to expire in 2030
State research tax credit carryforwards		916	indefinite
Federal foreign tax credit carryforwards		2,013	will begin to expire in 2028

The Company files income tax returns in the U.S. federal, various states and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The following tax years remain subject to examination:

Significant jurisdictions	Open Years
U.S. Federal	2021 – 2023
U.S. States	2020 – 2023
Foreign	2020 – 2023

In various jurisdictions, years prior to 2020 remain open solely for the purposes of examination of the Company’s NOL and credit carryforwards.

Tax Holiday

The Company operates under a tax holiday in Switzerland from 2020 through 2029, which consists of two consecutive five year periods: 2020 - 2024 and 2025 - 2029. The tax holiday is conditional upon the Company meeting specific activity and investment requirements as outlined by the Swiss Tax Authorities. The impact of this tax holiday is as follows (in thousands, except per share amounts):

	Years Ended
	2024		2023		2022
Tax impact related to tax holidays	$	4,466	$	8,683	$	7,394
Impact of tax holidays on diluted earnings (loss) per share	$	0.09	$	0.17	$	0.15

Uncertain Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, exclusive of interest, are included in other current liabilities as income taxes payable, is as follows (in thousands):

	Year Ended
	2024
Balance at beginning of period	$	—
Increases (decreases) - tax positions in prior period		910
Increases (decreases) - tax positions in current period		—
Balance at end of period	$	910

Interest of $540,000 was recognized for the year ended 2024 related to the 2024 uncertain tax positions. The Company expects a reduction of these uncertain tax positions within the next twelve months. There were no uncertain tax positions in 2023 or 2022.