Income Tax

6 Months Ended

Jul. 01, 2022

Income Tax Disclosure [Abstract]

Income Tax

8. INCOME TAX

The Company's effective tax rate was (66.9%) and 25.6% for the three months ended July 1, 2022 and June 25, 2021, respectively, and 65.8% and 23.2% for the six months ended July 1, 2022 and June 25, 2021. The Company’s income tax provision was $8.7 million and $6.2 million for the three months ended July 1, 2022 and June 25, 2021, respectively, and $17.3 and $13.2 million for the six months ended July 1, 2022 and June 25, 2021, respectively. The change in respective tax rates reflects, primarily, no tax benefit on the loss related to the divestitures during the second quarter, changes in the geographic mix of worldwide earnings and financial results in jurisdictions which are taxed at different rates, and the impact of losses in jurisdictions with full federal and state valuation allowances.

Company management continuously evaluates the need for a valuation allowance and, as of July 1, 2022, concluded that a full valuation allowance on its U.S. federal and state and certain of its foreign deferred tax assets was still appropriate.

As of July 1, 2022 and June 25, 2021, the Company’s gross liability for unrecognized tax benefits, excluding interest, was $1.7 million and $1.3 million, respectively. Increases or decreases to interest and penalties on uncertain tax positions are included in the income tax provision in the Condensed Consolidated Statements of Operations. Although it is possible that some of the unrecognized tax benefits could be settled within the next twelve months, the Company cannot reasonably estimate the outcome at this time.