INCOME TAXES (Tables)

12 Months Ended

Oct. 03, 2015

Income from continuing operations by location, the provision (benefit) for income taxes and the effective tax rate

The following table reflects income from continuing operations by location, the provision for income taxes and the effective tax rate for fiscal 2015, 2014, and 2013:



	Fiscal
(dollar amounts in thousands)	2015			2014			2013
United States operations	$	4,178		$	7,700		$	(4,340	)
Foreign operations	33,527			69,433			71,008
Income from operations before tax	37,705			77,133			66,668
Income tax (benefit)/expense	(12,934		)	14,145			7,310
Net income	$	50,639		$	62,988		$	59,358

Effective tax rate	(34.3		)%	18.3		%	11.0		%

Provision (benefit) for income taxes from continuing operations

The following table reflects the provision for income taxes from continuing operations for fiscal 2015, 2014, and 2013:



	Fiscal
(in thousands)	2015			2014		2013
Current:
Federal	$	1,459		$	843	$	(212	)
State	76			78		291
Foreign	4,707			5,534		1,732
Deferred:
Federal	(20,250		)	5,474		985
State	(10		)	5		5
Foreign	1,084			2,211		4,509
Provision for income taxes	$	(12,934	)	$	14,145	$	7,310

Effective income tax rate reconciliation

The following table reflects the difference between the provision for income taxes and the amount computed by applying the statutory federal income tax rate for fiscal 2015, 2014, and 2013:



	Fiscal
(in thousands)	2015			2014			2013
Computed income tax expense based on U.S. statutory rate	$	13,197		$	26,997		$	23,334
Effect of earnings of foreign subsidiaries subject to different tax rates	(6,103		)	(9,763		)	(11,193		)
Benefits from foreign approved enterprise zones	(5,855		)	(17,423		)	(9,626		)
Benefits from research and development tax credits (including prior years)	(4,090		)	—			—
Change in Permanent Reinvestment Assertion	(19,704		)	—			—
Dividend income	—			8,190			—
Effect of permanent items	1,822			(298		)	664
Changes in valuation allowance	2,634			(1,820		)	1,429
Foreign operations (withholding taxes, deferred taxes on unremitted earnings, US taxation of foreign earnings)	4,904			5,906			1,789
Reserve for uncertain tax positions	886			131			683
State income tax expense	(1,543		)	2,241			(734		)
Other, net	918			(16		)	964
Provision for income taxes	$	(12,934	)	$	14,145		$	7,310

Net deferred tax balance

The following table reflects the net deferred tax balance, composed of the tax effects of cumulative temporary differences for fiscal 2015 and 2014:



	Fiscal
(in thousands)	2015			2014
Inventory reserves	$	641		$	692
Other accruals and reserves	3,470			3,713
Net operating loss carryforwards	628			666
Valuation allowance	(613		)	(780		)
Total short-term deferred tax asset	$	4,126		$	4,291

Total short-term deferred tax liability	23			106
Net short-term deferred tax asset	$	4,103		$	4,185

Domestic tax credit carryforwards	$	5,035		$	688
Net operating loss carryforwards	32,355			27,361
Stock options	525			703
Other	337			400
	38,252			29,152
Valuation allowance	(22,502		)	(23,844		)
Total long-term deferred tax asset (1)	$	15,750		$	5,308

Repatriation of foreign earnings, including foreign withholding taxes	$	27,101		$	43,204
Depreciable assets	16,735			3,013
Prepaid expenses and other	—			300
Total long-term deferred tax liability	$	43,836		$	46,517
Net long-term deferred tax liability	$	28,086		$	41,209
Total net deferred tax liability	$	23,983		$	37,024


(1)	Included in other assets on the Consolidated Balance Sheets are deferred tax assets of $3.2 million and $3.8 million as of October 3, 2015 and September 27, 2014, respectively.

Unrecognized tax benefits

The beginning and ending balances of the Company's unrecognized tax benefits are reconciled below for fiscal 2015, 2014, and 2013:



	Fiscal
(in thousands)	2015			2014			2013
Unrecognized tax benefit, beginning of year	$	7,192		$	6,869		$	6,186
Additions for tax positions, current year	—			—			—
Additions for tax positions, prior year	5,140			717			2,485
Reductions for tax positions, prior year	(5,231		)	(394		)	(1,802		)
Unrecognized tax benefit, end of year	$	7,101		$	7,192		$	6,869