Income Taxes

12 Months Ended

Apr. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes

11.Income Taxes

Pretax income for the fiscal years ended April 2, 2022, April 3, 2021, and March 28, 2020 was attributable to the following tax jurisdictions:

	Year Ended
(Dollars in thousands)	April 2, 2022		April 3, 2021		March 28, 2020
Domestic	$	300,675	$	92,832	$	76,224
Foreign		29,754		18,568		8,830
Income before income taxes	$	330,429	$	111,400	$	85,054

The income tax provision by jurisdiction for the fiscal years ended April 2, 2022, April 3, 2021, and March 28, 2020 was as follows:

	Year Ended
(Dollars in thousands)	April 2, 2022			April 3, 2021			March 28, 2020
Current:
U.S. federal	$	55,983		$	13,094		$	9,360
Foreign		7,907			4,738			1,938
State		15,476			5,081			3,800
Total current	$	79,366		$	22,913		$	15,098
Deferred
U.S. federal	$	2,367		$	2,853		$	5,660
Foreign		1,118			851			5,214
State		(466	)		(116	)		922
Total deferred	$	3,019		$	3,588		$	11,796
Total income tax expense	$	82,385		$	26,501		$	26,894

Income tax expense differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income before income taxes as a result of the following differences:

	Year Ended
(Dollars in thousands)	April 2, 2022			April 3, 2021			March 28, 2020
Tax expense at U.S federal statutory rate	$	69,390		$	23,394		$	17,861
Increase (decrease) in rate resulting from:
State taxes, net of U.S. federal benefit	$	11,908		$	3,969		$	4,491
Foreign tax rate differences		1,417			900			502
Non-deductible compensation due to Section 162(m)		1,119			586			1,007
Recognition of foreign investment basis difference		1,076			616			25
Change in deferred tax valuation allowance		189			1,343			3,652
Uncertain tax positions		-			-			(643	)
Deferred tax rate changes		(200	)		(778	)		538
Other permanent difference		(224	)		265			844
U.S. tax credits		(2,296	)		(3,096	)		(1,005	)
Other		6			(698	)		(378	)
Total income tax expense	$	82,385		$	26,501		$	26,894

The Tax Cuts and Jobs Act enacted in 2017 (“Tax Act”) subjects a U.S. shareholder to current tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred.

The U.S. income tax rate for fiscal 2022, 2021, and 2020 was 21%.

Deferred tax assets and liabilities at April 2, 2022 and April 3, 2021 consisted of the following:

(Dollars in thousands)	April 2, 2022			April 3, 2021
ASSETS
Employee compensation	$	12,042		$	7,500
Intangible assets		9,833			10,665
Warranty reserves		8,043			7,041
Foreign net operating loss carryforwards		6,470			6,250
Self-insurance reserves		5,396			4,058
Lease assets		2,774			2,879
Equity-based compensation		2,206			1,333
Dealer volume discounts		2,077			1,631
State net operating loss carryforwards		2,023			2,372
U.S. tax credit carryforwards		1,891			2,030
Inventory reserves and impairments		1,750			1,558
Capitalized transaction costs		299			377
Foreign capital loss carryforwards		188			187
U.S. federal net operating loss carryforwards		-			4,583
Other		1,631			1,282
Gross deferred tax assets	$	56,623		$	53,746
LIABILITIES
Property, plant, and equipment		9,901			8,213
Intangible assets		7,834			9,470
Prepaid expenses		5,574			658
Foreign tax basis difference in investments		5,124			4,280
Lease liabilities		2,774			2,879
Other		49			60
Gross deferred tax liabilities	$	31,256		$	25,560
Valuation allowance		(12,741	)		(12,552	)
Net deferred tax assets	$	12,626		$	15,634

The Company anticipates periodically repatriating the earnings of its Netherlands and Canadian subsidiaries. A deferred tax liability is recognized for income tax withholding which may be incurred upon the reversal of basis differences in investments in its foreign subsidiaries.

The Company periodically evaluates the realizability of its deferred tax assets based on whether it is “more likely than not” that some portion of the deferred tax assets will not be realized. Our evaluation considers available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. The Company’s valuation allowance principally consists of valuation allowances for certain state NOL carryforwards, certain Canadian deferred tax assets, and the Company’s deferred tax assets in the Netherlands.

As of April 2, 2022, the Company has state NOL carryforwards in various jurisdictions which expire primarily in 2022 through 2042.

Unrecognized tax benefits represent the differences between tax positions taken or expected to be taken on a tax return and the benefits recognized for financial statement purposes. There were no unrecognized tax benefits at April 2, 2022 and April 3, 2021. The Company classifies interest and penalties on income tax uncertainties as a component of income tax expense. Accrued interest and penalties as of April 2, 2022 and April 3, 2021, were not significant.

The Company estimates no material changes to uncertain tax benefits in the next twelve months. The Company is no longer subject to foreign tax examinations by tax authorities for years prior to fiscal 2018. The Company’s U.S. subsidiaries are subject to U.S. federal tax examinations for fiscal 2019 through fiscal 2022, and U.S. state tax examinations by tax authorities for fiscal 2018 through fiscal 2022.