INCOME TAXES

6 Months Ended

Sep. 28, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

6. INCOME TAXES

The Company conducts business globally and reports its results of operations in a number of foreign jurisdictions in addition to the United States. The Company’s reported tax rate differs from the statutory tax rate due to the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which it operates have tax rates that differ from the U.S. statutory tax rate. The Company’s effective tax rate is adversely impacted by non-deductible expenses including executive compensation and transaction costs.

For the three and six months ended September 28, 2024, the Company reported income tax expense of $10.9 million and $19.2 million, respectively, representing effective tax rates of 24.3% and 21.0%. The effective tax rate for the three months ended September 28, 2024, which includes an immaterial discrete tax benefit. The effective tax rate for the six months ended September 28, 2024 includes $3.6 million of discrete tax benefit, primarily related to stock compensation windfalls. The discrete benefit also includes other items such as provision to return differences.

For the three and six months ended September 30, 2023, the Company reported income tax expense of $7.9 million and $18.5 million, respectively, representing effective tax rates of 24.1% and 21.9%, respectively. The effective tax rate for the three months ended September 30, 2023 includes $0.1 million of discrete tax benefit primarily related to stock compensation windfalls. The effective tax rate for the six months ended September 30, 2023 includes $1.3 million of discrete tax benefit primarily related to stock compensation windfalls.

The increase in the reported tax rate for the three months ended September 28, 2024, compared to the same period in fiscal 2024, relates primarily to the unfavorable impact of the jurisdictional mix of earnings and non-deductible acquisition-related expenses. The decrease in the reported tax rate for the six months ended September 28, 2024, compared to the same period in fiscal 2024, relates primarily to increased discrete tax benefits year-over-year, partially offset by the unfavorable impact of jurisdictional mix of earnings and non-deductible acquisition-related expenses.

On August 26, 2024, the U.S. Tax Court issued a decision in Varian Medical Systems, Inc. v. Commissioner. The decision related to the Tax Cuts and Jobs Act Transition Tax on unrepatriated earnings of applicable foreign subsidiaries. The Company is still evaluating the impact and whether to file a protective refund claim with the U.S. Internal Revenue Service.