INCOME TAXES

12 Months Ended

Dec. 28, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

(9) INCOME TAXES

Earnings before income taxes and equity in loss of nonconsolidated subsidiaries for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 were as follows:

	Fiscal Year Ended
	December 28,		December 30,		December 31,
	2024		2023		2022
United States	$	328,953	$	195,491	$	224,370
Foreign		139,728		40,961		139,518
Earnings before income taxes and equity in loss of nonconsolidated subsidiaries	$	468,681	$	236,452	$	363,888

Income tax expense (benefit) for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 consisted of:

	Fiscal Year Ended
	December 28,		December 30,		December 31,
	2024		2023		2022
Current:
Federal	$	84,110	$	42,226	$	48,309
State		17,738		8,480		11,888
Foreign		42,150		56,107		48,273
Total current income tax expense		143,998		106,813		108,470
Non-current:		(1,365)		1,957		1,442
Deferred:
Federal		(21,498)		(12,585)		(7,544)
State		(5,261)		(2,586)		(1,973)
Foreign		2,104		(3,478)		8,292
Total deferred income tax benefit		(24,655)		(18,649)		(1,225)
Total income tax expense	$	117,978	$	90,121	$	108,687

The reconciliations of the statutory federal income tax rate and the effective tax rate for the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022 were as follows:

	Fiscal Year Ended
	December 28,		December 30,		December 31,
	2024		2023		2022
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	2.2		1.8		2.3
Carryforwards, credits and changes in valuation allowances	(1.9)		(2.4)		1.0
Foreign jurisdictional tax rate differences	1.5		4.6		4.2
Changes in unrecognized tax benefits	(0.3)		0.8		0.3
Impairment of goodwill and other intangible assets	—		11.9		—
Excess tax benefit on equity compensation	0.7		1.1		0.5
Loss on divestitures	0.1		—		2.2
Other	1.9		(0.7)		(1.6)
Effective tax rate	25.2	%	38.1	%	29.9	%

The fiscal year ended December 30, 2023 included $28,079 of tax expense related to non-tax deductible goodwill impairment. The fiscal year ended December 31, 2022 included $8,166 of tax expense related to the divestiture of the offshore wind energy structures business for which no benefit was recorded.

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax credit carryforwards. The tax effects of significant items comprising the Company’s net deferred income tax assets (liabilities) as of December 28, 2024 and December 30, 2023 were as follows:

	December 28,		December 30,
	2024		2023
Deferred income tax assets:
Accrued expenses and allowances	$	31,340	$	36,883
Tax credits and loss carryforwards		56,180		58,519
Inventory allowances		10,538		8,427
Accrued compensation and benefits		25,779		23,880
Lease liabilities		41,628		41,769
Research and development expenditures		41,214		22,751
Deferred compensation		13,351		16,163
Gross deferred income tax assets		220,030		208,392
Valuation allowance		(44,920)		(48,632)
Net deferred income tax assets		175,110		159,760
Deferred income tax liabilities:
Property, plant, and equipment		36,342		42,299
Intangible assets		48,571		52,017
Defined benefit pension asset		11,630		3,851
Lease assets		41,627		42,717
Other deferred tax liabilities		5,375		6,616
Total deferred income tax liabilities		143,545		147,500
Net deferred income tax assets	$	31,565	$	12,260

Deferred income tax assets (liabilities) were presented in the Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023 as follows:

	December 28,		December 30,
	2024		2023
Other non-current assets	$	37,909	$	33,465
Deferred income taxes		(6,344)		(21,205)
Net deferred income tax assets	$	31,565	$	12,260

The Company’s management has reviewed recent operating results and projected future results, concluding that the realization of its net deferred tax assets is more likely than not. This assessment is based on, among other factors, recent operational changes and available tax planning strategies. As of December 28, 2024 and December 30, 2023, the amounts related to tax credits and loss carryforwards were $56,180 and $58,519, respectively.

Valuation allowances have been recorded for specific losses, reducing deferred tax assets to an amount that is more likely than not realizable. Deferred tax assets as of December 28, 2024 related to tax loss and tax credit carryforwards not reduced by valuation allowances are set to expire beginning in 2025.

Uncertain tax positions, included in “Other non-current liabilities” in the Consolidated Balance Sheets, are evaluated in a two-step process. First, the Company determines whether it is more likely than not that the tax positions will be sustained based on their technical merits. Second, for positions that meet this threshold, the Company recognizes the largest amount of tax benefit that is more than fifty percent likely to be realized upon settlement with the relevant tax authority.

The following summarizes the activity related to unrecognized tax benefits for the fiscal years ended December 28, 2024 and December 30, 2023:

	Fiscal Year Ended
	December 28,		December 30,
	2024		2023
Gross unrecognized tax benefits—beginning of period	$	4,306	$	2,536
Gross increases from tax positions in prior period		44		2,174
Gross increases from current‑period tax positions		410		370
Settlements with taxing authorities		(1,277)		(32)
Lapses of statutes of limitation		(776)		(742)
Gross unrecognized tax benefits—end of period	$	2,707	$	4,306

There are approximately $1,747 of uncertain tax positions for which reversal is reasonably possible within the next 12 months due to the closing of statutes of limitation. Accrued interest and penalties amounted to $383 and $442 as of December 28, 2024 and December 30, 2023, respectively. The Company’s policy is to record interest and penalties directly related to income taxes as “Income tax expense” in the Consolidated Statements of Earnings.

The Company files income tax returns in the U.S., various states, and foreign jurisdictions. U.S. tax years from 2021 onward remain open under statutes of limitation. The total unrecognized tax benefits that, if recognized, would affect the effective tax rate were $2,993 and $4,372 as of December 28, 2024 and December 30, 2023, respectively.

The Organisation for Economic Co-operation and Development issued Pillar Two model rules for a global minimum tax of 15%, effective January 1, 2024. While the U.S. has not enacted legislation to adopt Pillar Two, certain countries in which the Company operates have implemented it, while others are in the process of doing so. Pillar Two had no material impact on the Company’s fiscal 2024 effective tax rate, and the Company does not currently expect it to have a significant impact going forward.