INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2017

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

The following table reflects income or losses from continuing operations by location, the provision for income taxes and the effective tax rate for fiscal 2017, 2016, and 2015:



	Fiscal
(dollar amounts in thousands)	2017			2016			2015
United States operations	$	(4,114	)	$	(12,600	)	$	4,178
Foreign operations	107,800			67,350			33,527
Income from operations before tax	103,686			54,750			37,705
Income tax (benefit) / expenses	$	(8,135	)	$	7,638		$	(12,934	)

Effective tax rate	(7.8		)%	14.0		%	(34.3		)%

Provision (benefit) for income taxes from continuing operations

The following table reflects the provision for income taxes from continuing operations for fiscal 2017, 2016, and 2015:



	Fiscal
(in thousands)	2017			2016			2015
Current:
Federal	$	(3,975	)	$	871		$	1,459
State	64			53			76
Foreign	13,290			21,841			4,707
Deferred:
Federal	(15,374		)	(13,423		)	(20,250		)
State	40			12			(10		)
Foreign	(2,180		)	(1,716		)	1,084
Provision for income taxes	$	(8,135	)	$	7,638		$	(12,934	)

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 2017, 2016, and 2015:



	Fiscal
(in thousands)	2017			2016			2015
Computed income tax expense based on U.S. statutory rate	$	36,290		$	19,163		$	13,197
Effect of earnings of foreign subsidiaries subject to different tax rates	(20,226		)	(7,330		)	(6,103		)
Benefits from foreign approved enterprise zones	(21,556		)	(8,531		)	(5,855		)
Benefits from research and development tax credits	(1,859		)	(2,839		)	(4,090		)
Benefits from foreign tax credits	(26,119		)	—			—
Change in permanent reinvestment assertion	—			(9,696		)	(19,704		)
Tax impact on restructuring	—			4,238			—
Tax audit settlement	—			4,889			—
Effect of permanent items	778			(2,274		)	1,822
Non-deductible goodwill impairment	8,805			—			—
Deferred taxes not benefited	6,458			3,585			2,634
Foreign operations (withholding taxes, deferred taxes on unremitted earnings, US taxation of foreign earnings)	6,039			4,981			4,904
Reserve for uncertain tax positions	2,936			208			886
State income tax expense (net of federal benefit)	60			996			(1,543		)
Other, net	259			248			918
Provision for income taxes	$	(8,135	)	$	7,638		$	(12,934	)

Net deferred tax balance

The following table reflects the net deferred tax balance, composed of the tax effects of cumulative temporary differences for fiscal 2017 and 2016:



	Fiscal
(in thousands)	2017			2016
Inventory reserves	$	589		$	546
Stock options	422			647
Other accruals and reserves	8,230			4,937
Domestic tax credit carryforwards	17,635			8,011
Net operating loss carryforwards	35,937			31,817
	$	62,813		$	45,958

Valuation allowance	$	(29,614	)	$	(27,381	)
Total long-term deferred tax asset	$	33,199		$	18,577

Foreign withholding tax on undistributed earnings	$	20,945		$	20,119
Fixed and intangible assets	11,262			9,333
Total long-term deferred tax liability	$	32,207		$	29,452
Total net deferred tax asset / (liability)	$	992		$	(10,875	)

Reported as
Deferred tax asset	$	27,771		$	16,822
Deferred tax liability	26,779			27,697
Total net deferred tax asset / (liability)	$	992		$	(10,875	)

Unrecognized tax benefits

The beginning and ending balances of the Company's unrecognized tax benefits are reconciled below for fiscal 2017, 2016, and 2015:



	Fiscal
(in thousands)	2017			2016			2015
Unrecognized tax benefit, beginning of year	$	7,453		$	7,101		$	7,192
Additions for tax positions, current year	3,657			519			—
Additions for tax positions, prior year	1,834			827			5,140
Reductions for tax positions, prior year	(882		)	(994		)	(5,231		)
Unrecognized tax benefit, end of year	$	12,062		$	7,453		$	7,101