Income Tax

3 Months Ended

Mar. 29, 2024

Income Tax Disclosure [Abstract]

Income Tax

INCOME TAX

The Company's effective tax rate was 366.7% and 89.7% for the three months ended March 29, 2024 and March 31, 2023, respectively. The Company’s income tax provision was $9.9 million and $3.5 million for the three months ended March 29, 2024 and March 31, 2023, respectively. The change in respective tax rates reflects, primarily, 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. The increase also reflects the impact of the expiration of a reduced tax rate incentive on a portion of the Company's earnings in certain international subsidiaries and thus the Company is applying the local corporate statutory tax rate on those earnings. The Company is in the process of renewing the international tax incentive and when renewed will make an adjustment to its effective tax rate in that period. Company management continuously evaluates the need for a valuation allowance and, as of March 29, 2024, 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 March 29, 2024 and March 31, 2023, the Company’s gross liability for unrecognized tax benefits, excluding interest, was $2.9 million and $2.7 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.