INCOME TAXES

6 Months Ended

Jul. 01, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense was $12.8 million and $15.3 million for the three months ended July 1, 2023 and July 2, 2022, respectively. The decrease in income tax expense was due to lower income before income taxes. The effective tax rate was 25% for each of the three months ended July 1, 2023 and July 2, 2022.

Income tax expense was $16.7 million and $23.1 million for the six months ended July 1, 2023 and July 2, 2022, respectively. The decrease in income tax expense was due to lower income before income taxes. The effective tax rate for the six months ended July 1, 2023 was 26%, compared to 24% for the six months ended July 2, 2022. The higher effective tax rate was primarily due to an unfavorable tax impact related to stock-based compensation in the six months ended July 1, 2023.

Deferred tax assets were $7.9 million as of July 1, 2023 and $23.2 million as of December 31, 2022, which is presented in other assets on our unaudited condensed consolidated balance sheet.

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions, and other items.