Helios Technologies Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 29, 2018

Schedule of Income before Income Tax, Domestic and Foreign

For financial reporting purposes, income before income taxes includes the following components:

	For the year ended
	December 29, 2018		December 30, 2017		December 31, 2016
United States	$	44,693	$	37,005	$	30,562
Foreign		11,702		10,539		4,339
Total	$	56,395	$	47,544	$	34,901

Schedule of Components of Income Tax Provision (Benefit)

The components of the income tax provision (benefit) are as follows:

	For the year ended
	December 29, 2018			December 30, 2017			December 31, 2016
Current tax expense (benefit):
United States	$	4,229		$	17,165		$	9,740
State and local		2,522			3,095			923
Foreign		3,707			2,496			1,377
Total current		10,458			22,756			12,040
Deferred tax expense (benefit):
United States		380			(4,922	)		(341	)
State and local		110			(986	)		387
Foreign		(1,283	)		(862	)		(489	)
Total deferred		(793	)		(6,770	)		(443	)
Total income tax provision	$	9,665		$	15,986		$	11,597

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation between the effective income tax rate and the U.S. federal statutory rate is as follows:

	For the year ended
	December 29, 2018			December 30, 2017			December 31, 2016
U.S. federal taxes at statutory rate	$	11,843		$	16,640		$	12,245
Increase (decrease)
Foreign tax credit		—			—			—
Domestic production activity deduction		—			(1,909	)		(1,032	)
Foreign income taxed at different rate		1,292			(1,177	)		(381	)
FDII deduction		(2,195	)		—			—
Change in estimates related to prior years		(2,049	)		—			—
US income tax reform		—			459			—
State and local taxes, net		1,462			1,208			586
Current year tax credits		(633	)		—			—
Foreign deferred other true up		(810	)		—			—
Change in reserve		578			829			(284	)
Foreign patent box benefit		(937	)		—			—
Global intangible low-taxed income		526			—			—
Other		588			(64	)		463
Income tax provision	$	9,665		$	15,986		$	11,597

Schedule of Deferred Tax Assets and Liabilities

The temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 29, 2018, and December 30, 2017, are presented below:

	December 29, 2018			December 30, 2017
Deferred tax assets:
Foreign tax benefit of U.S. reserves	$	3,853		$	3,741
Net operating losses		443			529
Inventory		1,155			860
Intangible assets and goodwill		1,924			2,354
Accrued expenses and other		4,743			1,418
Currency hedging		519			—
Total deferred tax assets		12,637			8,902
Less: Valuation Allowance		(291	)		(346	)
Net deferred tax assets		12,346			8,556
Deferred tax liabilities:
Depreciation		(7,097	)		(5,948	)
Intangible assets and goodwill		(52,543	)		—
Other		(1,026	)		(22	)
Total deferred tax liabilities		(60,666	)		(5,970	)
Net deferred tax (liabilities) assets	$	(48,320	)	$	2,586

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a roll-forward of the Company’s unrecognized tax benefits:

Unrecognized tax benefits - January 2, 2016	$	2,049
Increases from positions taken during prior periods		157
Settled positions and reclassifications		1,295
Lapse of statute of limitations		—
Unrecognized tax benefits - December 31, 2016	$	3,501
Increases from positions taken during prior periods		1,525
Increases from positions taken during current period		558
Settled positions		—
Lapse of statute of limitations		(1,042	)
Unrecognized tax benefits - December 30, 2017	$	4,542
Increases from positions taken during prior periods		372
Increases from positions taken during current period		2,036
Settled positions		—
Lapse of statute of limitations		(837	)
Unrecognized tax benefits - December 29, 2018	$	6,113