Entity information:
14.
Income Taxes
 
Income before income taxes for the Company's domestic and foreign operations is as follows:
 
 
 
Fiscal Year Ended
 
 
 
April 1,
 
April 2,
 
March 28,
 
 
 
2017
 
2016
 
2015
 
Domestic
 
$
94,629
 
$
83,622
 
$
79,374
 
Foreign
 
 
10,255
 
 
11,163
 
 
5,181
 
 
 
$
104,884
 
$
94,785
 
$
84,555
 
 
The provision for (benefit from) income taxes consists of the following:
 
 
 
Fiscal Year Ended
 
 
 
April 1,
 
April 2,
 
March 28,
 
 
 
2017
 
2016
 
2015
 
Current:
 
 
 
 
 
 
 
 
 
 
Federal
 
$
21,903
 
$
26,281
 
$
21,833
 
State
 
 
887
 
 
1,960
 
 
809
 
Foreign
 
 
3,148
 
 
2,986
 
 
2,621
 
 
 
 
25,938
 
 
31,227
 
 
25,263
 
Deferred:
 
 
 
 
 
 
 
 
 
 
Federal
 
 
8,299
 
 
(279)
 
 
379
 
State
 
 
245
 
 
342
 
 
630
 
Foreign
 
 
(221)
 
 
(399)
 
 
35
 
 
 
 
8,323
 
 
(336)
 
 
1,044
 
Total
 
$
34,261
 
$
30,891
 
$
26,307
 
 
A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows:
 
 
 
Fiscal Year Ended
 
 
 
April 1,
 
April 2,
 
March 28,
 
 
 
2017
 
2016
 
2015
 
Income taxes using U.S. federal statutory rate
 
$
36,710
 
$
33,175
 
$
29,594
 
State income taxes, net of federal benefit
 
 
676
 
 
1,493
 
 
1,191
 
Domestic production activities deduction
 
 
(1,803)
 
 
(2,320)
 
 
(2,414)
 
Foreign rate differential
 
 
(662)
 
 
(1,321)
 
 
842
 
Worthless stock deduction
 
 
—
 
 
—
 
 
(4,100)
 
U.S. unrecognized tax positions
 
 
(290)
 
 
181
 
 
759
 
Other
 
 
(370)
 
 
(317)
 
 
435
 
 
 
$
34,261
 
$
30,891
 
$
26,307
 
 
Net deferred tax assets (liabilities) consist of the following:
 
 
 
April 1,
 
April 2,
 
 
 
2017
 
2016
 
Deferred tax assets (liabilities):
 
 
 
 
 
 
 
Postretirement benefits
 
$
1,018
 
$
1,111
 
Employee compensation accruals
 
 
4,128
 
 
3,541
 
Net operating losses
 
 
443
 
 
431
 
Inventory
 
 
12,110
 
 
13,017
 
Stock compensation
 
 
6,455
 
 
6,357
 
Pension
 
 
698
 
 
1,549
 
State tax
 
 
1,466
 
 
1,672
 
Other
 
 
3,947
 
 
3,006
 
Total gross deferred tax assets
 
 
30,265
 
 
30,684
 
Valuation allowance
 
 
(919)
 
 
(580)
 
Total deferred tax assets
 
$
29,346
 
$
30,104
 
 
 
 
 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
 
 
 
Property, plant and equipment
 
 
(19,548)
 
 
(16,746)
 
Intangible assets
 
 
(21,834)
 
 
(16,566)
 
Total deferred tax liabilities
 
 
(41,382)
 
 
(33,312)
 
 
 
 
 
 
 
 
 
Total net deferred tax assets (liabilities)
 
$
(12,036)
 
$
(3,208)
 
 
The Company evaluates deferred tax assets to ensure that the estimated future taxable income will be sufficient in character (i.e. capital versus ordinary income treatment), amount and timing to result in their recovery. After considering the positive and negative evidence, a valuation allowance has been recorded on certain state credits and state net operating losses as it is more likely than not (i.e. greater than a 50% likelihood) that these items will not be utilized. For the Company’s fiscal year ended April 1, 2017 the valuation allowance increased by $339 which pertained to an increase of state credits. For the Company’s fiscal year ended April 2, 2016 the valuation allowance increased by $42 which pertained to an increase of state credits. These valuation allowances are required because management has determined, based on financial projections and available tax strategies, that it is unlikely the net operating losses and credits will be utilized before they expire. If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge.
 
At April 1, 2017, the Company has state net operating losses in different jurisdictions at varying amounts up to $8,502, which expire at various dates through 2037. At April 1, 2017, the Company has state credits in different jurisdictions at varying amounts up to $2,524 which will expire at various dates through 2037. At April 1, 2017, the Company has foreign credits in different jurisdictions at varying amounts up to $ 703 which will expire at various dates through 2037.
 
A provision has not been made for additional U.S. federal and foreign taxes at April 1, 2017 of approximately $90,182 of undistributed earnings of foreign subsidiaries because the Company intends to reinvest these funds indefinitely to support foreign growth opportunities. It is not practicable to estimate the unrecognized deferred tax liability on these undistributed earnings. These earnings could become subject to additional tax under certain circumstances including, but not limited to, the remission as dividends, loans to the Company, or upon sale or pledging of the subsidiary’s stock.
 
Uncertain Tax Positions
 
Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. If recognized, substantially all of the unrecognized tax benefits for the Company’s fiscal years ended April 1, 2017 and April 2, 2016 would affect the effective income tax rate.
 
A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:
 
 
 
April 1,
 
April 2,
 
March 28,
 
 
 
2017
 
2016
 
2015
 
Balance, beginning of year
 
$
14,297
 
$
5,514
 
$
5,250
 
Gross (decreases) increases – tax positions taken during a prior period
 
 
(488)
 
 
248
 
 
(139)
 
Gross increases – tax positions taken during the current period
 
 
1,280
 
 
8,745
 
 
1,805
 
Reductions due to settlement with taxing authorities
 
 
(223)
 
 
—
 
 
(954)
 
Reductions due to lapse of the applicable statute of limitations
 
 
(1,091)
 
 
(210)
 
 
(448)
 
Balance, end of year
 
$
13,775
 
$
14,297
 
$
5,514
 
 
The Company recognizes the interest and penalties accrued related to unrecognized tax benefits in income tax expense. The Company recognized a benefit of $36 and a charge of $182 of interest and penalties on its statement of operations for the fiscal years ended April 1, 2017 and April 2, 2016, respectively. The Company has approximately $ 864 and $900 of accrued interest and penalties at April 1, 2017 and April 2, 2016, respectively.
 
The Company believes it is reasonably possible that some of its unrecognized tax positions may be effectively settled by the end of the Company’s fiscal year ending March 31, 2018 due to the closing of audits and the statute of limitations expiring in varying jurisdictions. The decrease, pertaining primarily to federal and state credits and state tax, is estimated to be $ 512.
 
The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to state or foreign income tax examinations by tax authorities for years ending before April 2, 2005. The Company is no longer subject to U.S. federal tax examination by the Internal Revenue Service for years ending before March 29, 2014. A U.S. federal tax examination by the Internal Revenue Service for the year ended March 30, 2013 was effectively settled in fiscal 2016.