Income Taxes |
3 Months Ended | ||
|---|---|---|---|
Apr. 04, 2026 | |||
| Income Taxes | |||
| Income Taxes |
Income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items, with any changes affecting the estimated annual effective tax rate recorded in the interim period in which the change occurs. We determined that the estimated annual effective tax rate method would provide a reliable estimate of our overall annual effective tax rate. Our effective tax rate was 28.1% for the first quarter of 2026. During the first quarter of 2026, we recognized a net discrete tax expense totaling $1.6 million, primarily related to a discrete tax expense related to stock-based compensation, partially offset by a discrete tax benefit related to a return-to-provision adjustment in Mexico. We’ve recognized approximately $1.5 million of an increased valuation allowance during the first quarter of 2026. Our effective tax rate was 209.2% for the first quarter of 2025. During the first quarter of 2025, we recognized a net discrete tax benefit of $1.4 million, primarily related to a discrete tax benefit of $2.1 million for the tax effect of a pre-transition loss related to Section 987 of the Internal Revenue Code of 1986 for the cumulative unrecognized foreign exchange loss relating to our primary operating subsidiary in Canada, which is a qualified business unit for purposes of Section 987, partially offset by discrete tax expenses of $0.7 million related to stock-based compensation and rate changes.
|