Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.26.1
Income Taxes
 3 Months Ended
Apr. 04, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
14. Income Taxes
We are taxed as a Corporation under Subchapter C in the U.S. We also file in U.S. state and local jurisdictions and in other countries where we have operations. Our effective tax rate is based on pre-tax earnings, enacted U.S. statutory tax rates, non-deductible expenses, and certain tax rate differences between U.S. and foreign jurisdictions. Our foreign subsidiaries file income tax returns in local country jurisdictions as required. The U.K., France, and Australia entities are included on U.S. tax returns as pass-through entities.

We account for income taxes in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”). We determine our provision for income taxes for interim periods using an estimate of our annual effective tax rate on year-to-date ordinary income and records any changes affecting the estimated annual effective tax rate in the interim period in which the changes occur. Our provision for income taxes consists of provisions for federal, state, and foreign income taxes. Deferred tax liabilities and assets attributable to different tax jurisdictions are not offset in the Unaudited Condensed Consolidated Financial Statements.
During the three month periods ended April 4, 2026 and March 29, 2025, the Company recorded a total income tax provision of approximately $2.3 and $4.6 on pre-tax income of $2.5 and $15.4 resulting in an effective tax rate of 92.0% and 29.9%, respectively. For the three month period ended April 4, 2026, the effective tax rate was primarily impacted by lower than usual income before tax, state income taxes, nondeductible executive compensation, the discrete impact of share-based compensation, offset by the benefit of tax credits and the U.S. tax net benefit of foreign operations. For the three month period ended March 29, 2025, the effective tax rate was primarily impacted by state income taxes, nondeductible executive compensation, the discrete impact of RSU vesting, offset by the benefit of the R&D credit and the U.S. tax benefit derived from U.S. exports.