Income Taxes

9 Months Ended

Oct. 01, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense was $5.1 million on pre-tax income of $6.4 million for the three months ended October 1, 2022, as compared to income tax expense of $3.1 million on pre-tax income of $21.2 million in the comparable prior year period. Income tax expense was $8.9 million on pre-tax loss of $19.0 million for the nine months ended October 1, 2022, as compared to income tax expense of $4.4 million on pre-tax income of $4.0 million in the comparable prior year period. The effective income tax rates for the three and nine months ended October 1, 2022 were 79.7% and (46.8)%, respectively, compared to 14.6% and 110.0% in the comparable prior year periods.

The effective tax rate for the three months ended October 1, 2022 varied from the effective tax rate in the comparable prior year period due to foreign exchange losses incurred in the third quarter of 2022 in tax jurisdictions for which no tax benefit is recognized due to existing valuation allowances. The effective tax rate for the nine months ended October 1, 2022 varied from the effective tax rate in the comparable prior year period due primarily to impairment charges incurred in the second quarter of 2022 for which minimal tax benefit is recognized.

The effective tax rate for the three and nine months ended October 1, 2022 varied from the statutory tax rate primarily due to impairment charges incurred in the second quarter of 2022 for which minimal tax benefit is recognized, losses in tax jurisdictions for which no tax benefit is recognized due to existing valuation allowances, and income in tax jurisdictions with tax rates lower than the Canadian statutory tax rate.