INCOME TAXES

9 Months Ended

Sep. 28, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense was $17.8 million and $14.9 million for the three months ended September 28, 2024 and September 30, 2023, respectively. The increase in income tax expense was primarily due to higher income before income taxes. The effective tax rate for the three months ended September 28, 2024 was 24% compared to 26% for the three months ended September 30, 2023. The decrease in the effective tax rate was primarily due to a discrete tax expense related to a change in the estimate for an uncertain tax position in the three months ended September 30, 2023.

Income tax expense was $41.2 million and $31.6 million for the nine months ended September 28, 2024 and September 30, 2023, respectively. The increase in income tax expense was primarily due to higher income before income taxes. The effective tax rate for the nine months ended September 28, 2024 was 25% compared to 26% for the nine months ended September 30, 2023. The decrease in the effective tax rate was primarily due to a discrete tax expense related to a change in the estimate for an uncertain tax position in the nine months ended September 30, 2023.

Deferred tax liabilities were $1.2 million as of September 28, 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. Certain governments globally have enacted, or are in the process of enacting, legislation to address Pillar Two. For the nine months ended September 28, 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.