Income Taxes

6 Months Ended

Jun. 26, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12. Income Taxes

The following table provides details of income taxes:

	Three Months Ended						Six Months Ended
	June 26,			June 27,			June 26,			June 27,
	2021			2020			2021			2020
Income before income taxes	$	35,956		$	7,418		$	62,558		$	3,414
Provision (benefit) for income taxes	$	905		$	(6	)	$	3,394		$	394
Effective tax rate		3	%		0	%		5	%		12	%

The income tax provision for the three and six months ended June 26, 2021 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.  The increase in the Company’s income tax provision for the three and six months ended June 26, 2021 as compared to the three and six months ended June 27, 2020 is primarily due to an increase in quarterly earnings, offset by (i) an increase in the Foreign Derived Intangible Income (“FDII”) deduction, (ii) an increase in the excess tax benefit associated with equity compensation, and (iii) a release of reserves due to expiration of the applicable statute of limitations.  The Company’s recorded effective tax rate is less than the U.S. statutory rate primarily due to projected FDII deductions and federal research and development tax credits.

The Company currently has a partial valuation allowance recorded against certain foreign and state net operating loss and credit carryforwards where the realizability of such deferred tax assets is substantially in doubt.  Each quarter, the Company assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers available evidence, both positive and negative, including forecasted earnings in assessing its need for a valuation allowance.  As a result of the Company’s analysis, it concluded that it is more likely than not that a portion of its deferred tax assets will not be realized. Therefore, the Company continues to provide a valuation allowance against certain deferred tax assets.  The Company continues to monitor available evidence and may reverse some or all of its remaining valuation allowance in future periods, if appropriate.  The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $14,254 and $14,238 as of June 26, 2021 and December 26, 2020, respectively.