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Note 13. Income Taxes
 3 Months Ended
Jul. 01, 2012
Income Tax Disclosure [Text Block]
13.  Income Taxes

The income tax benefit for the six months ended July 1, 2012 was $2.1 million compared to an income tax provision of $8.7 million for the six months ended July 3, 2011. Lakes’ income tax benefit in the current year period is primarily due to its ability to carry back estimated 2012 taxable loss to a prior year and receive a refund of taxes previously paid.  In the prior period, the income tax provision consisted primarily of current income tax provision and additional valuation allowance.  The Company’s effective tax rates were (2,186)% and 44% for the six months ended July 1, 2012 and July 3, 2011, respectively. For the six months ended July 1, 2012, the effective tax rate differs from the federal tax rate of 35% primarily due to state taxes and discrete items recognized.  For the six months ended July 3, 2011, the effective tax rate differs from the federal tax rate of 35% primarily due to state taxes and additional valuation allowance recorded due to projected 2011 timing differences.

Deferred tax assets are evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies.  Management has evaluated all available evidence and has determined that negative evidence continues to outweigh positive evidence for the realization of deferred tax assets and as a result continues to provide a full valuation allowance against its deferred tax assets.