Income Taxes

9 Months Ended

Dec. 29, 2018

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

For the three months ended December 29, 2018 and December 30, 2017, the Company recorded $4.4 million and $15.1 million of income tax expense and had an effective tax rate of 29.7% and 73.6%, respectively. For the nine months ended December 29, 2018 and December 30, 2017 the Company recorded $13.7 million and $22.1 million of income tax expense and had an effective tax rate of (25.5%) and 55.0%, respectively. The change in the effective tax rate for the three and nine months ended December 29, 2018, compared with the same periods of 2017, was primarily due to costs related to the Exchange for which no tax benefit can be recognized including non-deductible equity-based compensation and the remeasurement of U.S. deferred tax assets and liabilities at the new corporate income tax rate of 21%, from 35%, under the 2017 Tax Cuts and Jobs Act signed into law on December 22, 2017 (the “Tax Act”).

The Company’s effective tax rate for the three and nine months ended December 29, 2018 differs from the federal statutory income tax rate of 21%, due primarily to the effect of non-deductible expenses, state and local income taxes, one-time charges related to the Exchange and results of operations in foreign jurisdictions. The Company’s effective tax rate for the three and nine months ended December 30, 2017, was impacted by the IRS rules relating to transitional income tax rates for companies with a fiscal year end resulting in a blended federal statutory rate of 31.5% for fiscal 2018 as well as the remeasurement of U.S. deferred tax assets and liabilities at the new corporate income tax rate of 21%, from 35% under the Tax Act. In addition, the Company’s effective tax rate was impacted by the effect of non-deductible expenses, state and local income taxes, results in foreign jurisdictions and non-taxable entities.

The Company continued its analysis of the Tax Act during the third quarter of fiscal 2019 which resulted in no change to the provisional amounts recorded in fiscal 2018 related to the remeasurement of deferred tax assets and liabilities. As of December 29, 2018, the Company completed its analysis of the impact of the Tax Act and the amounts are no longer considered provisional.

During the three and nine months ended December 29, 2018, the Company’s uncertain tax positions decreased by $0.3 million and $0.7 million, respectively, due to the expiration of certain statutes of limitations. The Company estimates that the expected change to the total amount of uncertain tax benefits in the next twelve months will be an increase of $0.1 million due to additional accrual of interest and penalties. The Company records interest and penalties related to uncertain tax positions as a component of income tax expense. Net interest expense for the periods presented herein was not significant.