INCOME TAXES

6 Months Ended

Jun. 28, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income tax expense was $16.9 million for each of the three months ended June 28, 2025 and June 29, 2024. The effective tax rate was 25% for each of the three months ended June 28, 2025 and June 29, 2024.

Income tax expense was $23.7 million and $23.4 million for the six months ended June 28, 2025 and June 29, 2024, respectively. The increase in income tax expense was primarily due to higher income before income taxes. The effective tax rate was 26% for each of the six months ended June 28, 2025 and June 29, 2024.

Deferred tax assets were $2.2 million as of June 28, 2025 and $9.1 million as of December 28, 2024, which is presented in other assets 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 six months ended June 28, 2025, the impact of Pillar Two on our consolidated financial statements was not material.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain provisions of the Tax Cuts and Jobs Act set to expire, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are in the process of evaluating the OBBBA and its impact on our consolidated financial statements.

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.