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INCOME TAXES | 6 Months Ended
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Jun. 27, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, the Company continues to explore tax planning opportunities that may have a material impact on its effective tax rate.
| Three Months Ended |  | Six Months Ended
| June 27, 2025 |  | June 28, 2024 |  | June 27, 2025 |  | June 28, 2024
Income from continuing operations before taxes | $ | 45,596 |  |  | $ | 40,042 |  |  | $ | 32,597 |  |  | $ | 64,881 |
Provision for income taxes | 8,587 |  |  | 8,835 |  |  | 18,053 |  |  | 13,083 |
Effective tax rate | 18.8 | % |  | 22.1 | % |  | 55.4 | % |  | 20.2 | %
(10.) INCOME TAXES (Continued) The difference between the Company’s effective tax rates and the U.S. federal statutory income tax rate of 21% for the second quarter of 2025 is due principally to the net impact of the Company’s earnings outside the U.S., which are generally taxed at rates that differ from the U.S. federal rate, the Global Intangible Low-Taxed Income (“GILTI”) tax, the Foreign Derived Intangible Income (“FDII”) deduction, the availability of tax credits and the recognition of certain discrete tax items. The difference between the Company’s effective tax rates and the U.S. federal statutory income tax rate of 21% for the first six months of 2025 is due principally to the impact of the 2028 Convertible Notes Exchange Transactions, including the nondeductible induced conversion expense and reduction of future original issue discount amortization for U.S. income tax purposes. To a lesser extent, the remaining difference between the Company’s effective tax rate and the U.S. federal statutory income tax rate are consistent with the differences recognized in the second quarter and first six months of 2024 and consist of the net impact of the Company’s earnings outside the U.S., which are generally taxed at rates that differ from the U.S. federal rate, the Global Intangible Low-Taxed Income (“GILTI”) tax, the Foreign Derived Intangible Income (“FDII”) deduction, the availability of tax credits and the recognition of certain discrete tax items. For the second quarter and first six months of 2025, the Company recorded discrete tax benefits of $0.7 million and $2.2 million, respectively. The discrete tax benefits for the second quarter and first six months of 2025 are predominately related to excess tax benefits from stock-based compensation, net of deductibility limitations. For the second quarter and first six months of 2024, the Company recorded discrete tax expense of $0.5 million and a discrete tax benefit of $0.3 million, respectively. The discrete tax expense for the second quarter of 2024 relates predominately to unfavorable return to provision adjustments attributable to certain foreign tax returns filed during the quarter. The net discrete tax benefit recorded for the six months of 2024 includes discrete tax amounts for the first quarter of 2024 predominately related to excess tax benefits, net of deductibility limitations, recognized upon vesting of RSUs. On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework. The effective dates are January 1, 2024 and January 1, 2025, for different aspects of the directive. The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries. The Company’s 2025 provision for income taxes includes the impact of the Pillar Two 15% Global Minimum Tax. Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts reflected in the financial statements. As of June 27, 2025, the Company had unrecognized tax benefits of approximately $6.4 million, substantially all of which would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized. As of June 27, 2025, the Company believes it is reasonably possible that a reduction of approximately $4.0 million of the balance of unrecognized tax benefits may occur within the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”) enacting a broad range of tax reform provisions, including extending and modifying certain key domestic and international Tax Cuts & Jobs Act provisions. Only certain provisions will have current-year financial reporting implications due to varying effective dates and discretionary elections. The Company is currently evaluating the OBBBA and does not anticipate a material impact to the condensed consolidated financial statements.

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