Note H - Income Taxes

9 Months Ended

Mar. 29, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

H. Income Taxes

The Company computes its effective tax rate each quarter consistent with the requirements of ASC 740-270-25. However, due to historic domestic losses and the full domestic valuation allowance, the Company has removed the loss jurisdiction for which no tax benefit may be recorded from the Annual Effective Tax Rate ("AETR") calculations consistent with ASC 740-270-30-30.

The Company recorded an overall effective tax rate of 9.3% and 14.0% for the quarters ended March 29, 2024 and March 31, 2023, respectively and an overall effective tax rate of 41.0% and 38.2% for the three quarters ended March 29, 2024 and March 31, 2023. Year-to-date foreign earnings were $14,916 and $8,207, with corresponding income tax expense of $2,599 and $2,303 for the period ended March 29, 2024 and March 31, 2023. The foreign effective tax rate for the period ended March 29, 2024 incudes a total discrete benefit of ($834), of which ($786) related to a favorable tax ruling related to operations in the Netherlands.

Year-to-date domestic earnings were ($8,557) and ($2,063), with corresponding income tax expense of $7 and $47 for the three quarters ended March 29, 2024 and March 31, 2023.