INCOME TAXES

6 Months Ended

Apr. 01, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the three and six months ended April 1, 2022 and April 2, 2021, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:

	Three Months Ended						Six Months Ended
(thousands, except tax rate data)	April 1, 2022			April 2, 2021			April 1, 2022			April 2, 2021
Profit before income taxes	$	13,210		$	37,310		$	27,799		$	63,321
Income tax expense	3,310			9,476			7,043			15,640
Effective income tax rate	25.1		%	25.4		%	25.3		%	24.7		%

The effective tax rate for the three months ended April 1, 2022 and the prior year quarter were consistent with no primary factors materially impacting the rate. The effective tax rate was higher for the six months ended April 1, 2022 compared to the prior year period mainly due to the favorable impact from an intra-entity transfer of an asset other than inventory recorded in the prior year.

The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized.  The significant tax jurisdictions that have a valuation allowance for the periods ended April 1, 2022 and April 2, 2021 were:

April 1, 2022	April 2, 2021
France	France
Indonesia	Indonesia
Switzerland	Switzerland

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes.  As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation.  The Company’s 2022 fiscal year tax expense is anticipated to be unchanged related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense.  The Company is projecting accrued interest of $100 related to uncertain income tax positions for the fiscal year ending September 30, 2022.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions.   As of the date of this report, the following tax years remain open to examination by the respective significant tax jurisdictions:

Jurisdiction	Fiscal Years
United States	2018-2021
Canada	2018-2021
France	2018-2021
Germany	2019-2021
Italy	2019-2021
Switzerland	2011-2021