Income Taxes

9 Months Ended

Sep. 25, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12. Income Taxes

The following table provides details of income taxes:

	Three Months Ended						Nine Months Ended
	September 25,			September 26,			September 25,			September 26,
	2021			2020			2021			2020
Income before income taxes	$	43,069		$	8,927		$	105,627		$	12,341
Provision for income taxes	$	6,621		$	836		$	10,015		$	1,230
Effective tax rate		15	%		9	%		10	%		10	%

The income tax provision for the three and nine months ended September 25, 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 months ended September 25, 2021 as compared to the three months ended September 26, 2020 is primarily due to an increase in quarterly earnings, a decrease to the estimated tax benefit of the R&D and foreign tax credits, offset by an increase in the Foreign Derived Intangible Income (“FDII”) deduction and an increase in the excess tax benefit associated with equity compensation.  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 $14,244 and $14,238 as of September 25, 2021 and December 26, 2020, respectively.