Income Taxes |
9 Months Ended |
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Sep. 27, 2025 | |
| 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. The 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 September 27, 2025 and September 28, 2024, we recorded a total income tax provision of approximately $6.1 and $3.3 on pre-tax income of $21.3 and $15.1 resulting in an effective tax rate of 28.6% and 21.9%, respectively. During the nine month periods ended September 27, 2025 and September 28, 2024, we recorded a total income tax provision of approximately $17.1 and $23.3 on pre-tax income of $63.8 and $93.4 resulting in an effective tax rate of 26.8% and 24.9%, respectively. For the three and nine month periods ended September 27, 2025, effective tax rates were primarily impacted by the change in statutory rate differentials, changes in
estimated state income tax and apportionment rates, and permanent differences. For the three and nine month periods ended September 28, 2024, effective rates were primarily impacted by state income taxes, statutory rate differentials, and permanent differences.
On July 4, 2025, H.R.1 (commonly referred to as the One Big Beautiful Bill Act or “OB3”) was enacted, reinstating bonus depreciation, accelerating the deduction for research and experimentation expenses previously capitalized and amortized under the Tax Cuts and Jobs Act of 2017 (“TCJA”), and allowing for an increased deduction of interest expense. During the three month period ended September 27, 2025, we reflected the changes to certain timing differences in the current period. The primary impact of OB3 in the current year was a reclassification between deferred income tax and current income tax of approximately $11.5 million with no material impact to the effective tax rate.
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