Income Taxes

3 Months Ended

Mar. 27, 2026

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company recorded income tax provision of $19.2 million and $7.4 million for the three months ended March 27, 2026 and March 28, 2025, respectively. The Company’s effective tax rate was 457.1% and 151.0% for the three months ended March 27, 2026 and March 28, 2025, respectively.

The change in respective tax rates reflects, primarily, the impact of a planned distribution of earnings from one of the Company’s foreign subsidiaries in the current year, 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 valuation allowances on deferred tax assets. Company management continuously evaluates the need for a valuation allowance and, as of March 27, 2026, concluded that a valuation allowance on its U.S. federal, state and certain foreign deferred tax assets was still appropriate.

The provision for income taxes for the three months ended March 27, 2026 includes the impact of a change in the Company’s assertion regarding the permanent reinvestment of undistributed earnings of one of its China subsidiaries. The Company no longer considers the China subsidiary’s undistributed earnings generated prior to fiscal year 2022 permanently reinvested. As a result of this change in assertion, the Company recorded a discrete income tax expense of $14.8 million in the quarter ended March 27, 2026.

As of March 27, 2026 and December 26, 2025, the Company’s gross liability for unrecognized tax benefits, excluding interest, was $5.8 million and $5.6 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.

The Organization for Economic Cooperation and Development (“OECD”) reached agreement among certain member countries to implement a global minimum tax framework, commonly referred to as Pillar Two, which established a minimum 15 percent income tax rate. Pillar Two did not have a significant impact on the Company's financial statements for fiscal year 2025. This legislation is effective for us in additional jurisdictions beginning in fiscal 2026, most notably in Singapore and Malaysia where we currently enjoy a low tax rate under certain tax incentives. The Company has accounted for the impacts of Pillar Two in its provision for income taxes for the three months ended March 27, 2026.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S. The OBBBA included numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S. international tax rules. Certain of the U.S. international provisions of OBBBA became effective in our fiscal 2026 year. The Company has analyzed the impacts of the OBBBA and reflected them in the current period. These impacts did not have a material effect on the provision for income taxes for the three months ended March 27, 2026.