Income Taxes

6 Months Ended

Apr. 01, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense for the three and six months ended April 1, 2023 was $7.0 million and $14.2 million, respectively, compared to $4.4 million and $7.8 million for the three and six months ended April 2, 2022, respectively.

The effective tax rate for the three and six months ended April 1, 2023 was 14.6% compared to the effective tax rates of 14.2% and 13.4% for the three and six months ended April 2, 2022, respectively. The increases in effective tax rates for the three and six months ended April 1, 2023 compared to the three and six months ended April 2, 2022 were primarily due to a change in the geographic distribution of pre-tax book income.

The amount of unrecognized tax benefits recorded for uncertain tax positions increased by $0.9 million for the three months ended April 1, 2023. The Company recognizes accrued interest and penalties on uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three and six months ended April 1, 2023 was $0.2 million and $0.3 million, respectively.

One or more uncertain tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company's consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. The Company is under audit in a foreign jurisdiction but any settlement is not expected to have a material impact.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended April 1, 2023, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the EMEA segment and a partial valuation against its net deferred tax assets in certain jurisdictions within the AMER segment, as it was more likely than not that these assets would not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until it determines it is more likely than not that the deferred tax assets will be realized.