Income Taxes

9 Months Ended

Sep. 27, 2025

Income Taxes [Abstract]

Income Taxes

Note 4 – Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.  The effective tax rates for the periods ended September 27, 2025 and September 28, 2024 reflect the Company’s expected tax rate on reported income before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates. 

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) issued model rules for a new global minimum tax (“Pillar Two”). Various jurisdictions around the world have passed legislation to enact Pillar Two and certain Pillar Two rules are in effect for 2025. The United States has not adopted Pillar Two.  The Company does not anticipate a material increase in income tax expense for 2025 due to Pillar Two and the Company is continuing to monitor Pillar Two developments and the potential future impact on its operations and income tax expense.

On July 4, 2025, H.R. 1 (“the  Act”), a tax reconciliation act, was enacted into law in the United States.  The Act did not change the U.S. federal tax rate and most of the provisions of the Act are effective for tax years beginning after December 31, 2025.  The Company has recorded no change to the deferred U.S. taxes directly related to the Act.  The Act allows the deduction in tax year 2025, or in tax years 2025 and 2026, of previously capitalized research and development costs.  The Company anticipates that these additional tax deductions will preclude the utilization of a U.S. foreign tax credit ("FTC") that is due to expire in 2028. As an indirect result of this change in tax law, the Company recorded a valuation allowance of $9,420 on the deferred tax asset related to this FTC.

In the third fiscal quarter of 2025, the Federal Republic of Germany enacted tax legislation decreasing the federal tax rate beginning in 2028 by 1% per year for five years.  The Company recorded deferred tax expense of $4,237 to reduce the carrying amount of deferred tax assets in Germany based on these new rates.

The Company repatriated $75,000 of accumulated earnings to the United States in the second fiscal quarter of 2025 and paid withholding taxes, in Israel, of $9,375.  The withholding tax expense for the repatriation was recorded in prior years.

During the nine fiscal months ended September 27, 2025, the liabilities for unrecognized tax benefits decreased $682 on a net basis, primarily due to statute expirations, settlements, and payments, partially offset by accruals and foreign currency adjustments for the current period.