INCOME TAXES

3 Months Ended

Mar. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense was $6.5 million and $3.9 million for the three months ended March 30, 2024 and April 1, 2023, respectively. The increase in income tax expense is due to a higher income before income taxes. The effective tax rate for the three months ended March 30, 2024 was 29% compared to 27% for the three months ended April 1, 2023. The higher effective tax rate was primarily due to higher discrete tax expenses, including an unfavorable tax impact related to stock compensation in the three months ended March 30, 2024.

Deferred tax liabilities were $4.2 million as of March 30, 2024 and $4.0 million as of December 30, 2023, which is presented in other liabilities on our unaudited condensed consolidated balance sheet.

The Organization for Economic Co-operation and Development enacted model rules for a new global minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of enacting, legislation to address Pillar Two. For the three months ended March 30, 2024, the impact of Pillar Two on our consolidated financial statements was not material.

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.