XML 25 R11.htm IDEA: XBRL DOCUMENT v3.23.2
Income Taxes
 3 Months Ended
Jul. 29, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 4. Income Taxes

The provision for income taxes for an interim period is based on an estimated annual effective income tax rate applied to ordinary year-to-date earnings or losses. The estimated annual effective income tax rate is determined excluding the effects of unusual or significant one-time items that are reported net of the related tax effects in the period in which they occur. In addition, any material effects of enacted tax law or rate changes as well as the Company’s ability to utilize various tax assets is recognized in the period in which the change occurs.

The computation of the estimated annual effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year by jurisdiction, certain book to tax adjustments, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as the Company’s tax environment changes.

The Company’s income tax expense and effective tax rate for the three months ended July 29, 2023 and July 30, 2022 were as follows:

 

 

Three Months Ended

 

($ in millions)

 

July 29, 2023

 

 

July 30, 2022

 

Pre-tax income

 

$

1.0

 

 

$

25.9

 

Income tax expense

 

0.1

 

 

4.4

 

Effective tax rate

 

 

10.0

%

 

 

17.0

%

The effective tax rate for the three months ended July 29, 2023 was lower than the U.S. statutory tax rate primarily due to income derived from foreign operations with lower statutory tax rates and research deductions claimed in foreign jurisdictions, partially offset by GILTI and non-deductible expenses. The effective tax rate for the three months ended July 30, 2022 was lower than the U.S. statutory tax rate primarily due to income derived from foreign operations with lower statutory tax rates partially offset by non-deductible expenses.

The Company’s gross unrecognized income tax benefits was $4.5 million at both July 29, 2023 and April 29, 2023. If any portion of the Company’s unrecognized tax benefits is recognized, it would impact the Company’s effective tax rate. The unrecognized tax benefits are reviewed periodically and adjusted for changing facts and circumstances, such as tax audits, the lapsing of applicable statutes of limitations and changes in tax law. The Company recognizes interest and penalties related to income tax uncertainties in income tax expense. Accrued interest and penalties were $0.3 million and $0.2 million as of July 29, 2023 and April 29, 2023, respectively.