Income Taxes

6 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense was $1.4 million on pre-tax loss of $21.1 million for the three months ended July 2, 2022, as compared to income tax benefit of $3.4 million on pre-tax loss of $11.7 million in the comparable prior year period. Income tax expense was $3.8 million on pre-tax loss of $25.4 million for the six months ended July 2, 2022, as compared to income tax expense of $1.3 million on pre-tax loss of $17.2 million in the comparable prior year period. The effective income tax rates for the three and six months ended July 2, 2022 were (6.6)% and (15.0)%, respectively, compared to 29.1% and (7.6)% in the comparable prior year periods.

The effective tax rate for the three and six months ended July 2, 2022 varied from the effective tax rate in the comparable prior year period due primarily to impairment charges incurred in the second quarter of 2022 for which minimal tax benefit is recognized and increased earnings in taxable jurisdictions.

The effective tax rate for the three and six months ended July 2, 2022 varied from the statutory tax rate primarily due to impairment charges incurred in the second quarter of 2022 for which minimal tax benefit is recognized, losses in tax jurisdictions for which no tax benefit is recognized due to existing valuation allowances, and income in tax jurisdictions with tax rates lower than the Canadian statutory tax rate.