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Income Taxes | 12 Months Ended
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Sep. 27, 2013
Income Taxes [Abstract] |
Income Taxes | 6 INCOME TAXES The U.S. and foreign income before income taxes for the respective years consisted of the following:
| 2013 | 2012 | 2011
United States | $ | 19,885 | $ | 20,332 | $ | 11,133
Foreign |  | 4,775 |  | (406) |  | 1,117
| $ | 24,660 | $ | 19,926 | $ | 12,250
Income tax expense (benefit) for the respective years consisted of the following:
| 2013 | 2012 | 2011
Current: |  |  |  |  |  |
Federal (net of tax benefit from operating loss carryforward of $0, $3,098 and $2,505, respectively) | $ | 2,832 | $ | 828 | $ | -
State |  | 470 |  | 378 |  | 642
Foreign |  | 1,437 |  | 1,595 |  | 2,000
Deferred |  | 594 |  | 6,991 |  | (23,036)
| $ | 5,333 | $ | 9,792 | $ | (20,394)
The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at the end of the respective years are presented below:
| 2013 | 2012 |
Deferred tax assets: |  |  |  |  |  |
Inventories | $ | 1,974 | $ | 3,700 |  |
Compensation |  | 7,074 |  | 8,635 |  |
Tax credit carryforwards |  | 6,385 |  | 8,331 |  |
Goodwill and other intangibles |  | - |  | 3,181 |  |
Net operating loss carryforwards |  | 7,215 |  | 7,507 |  |
Depreciation and amortization |  | - |  | 220 |  |
Other |  | 5,109 |  | 5,178 |  |
Total gross deferred tax assets |  | 27,757 |  | 36,752 |  |
Less valuation allowance |  | 9,479 |  | 13,299 |  |
Deferred tax assets |  | 18,278 |  | 23,453 |  |
Deferred tax liabilities: |  |  |  |  |  |
Goodwill and other intangibles |  | 1,279 |  | - |  |
Depreciation and amortization |  | 1,091 |  | - |  |
Foreign statutory reserves |  | 1,114 |  | 694 |  |
Net deferred tax assets | $ | 14,794 | $ | 22,759 |  |
The net deferred tax assets recorded in the Consolidated Balance Sheet as of the fiscal years ended September 27, 2013 and September 28, 2012 were as follows:
| 2013 | 2012 |
Current assets | $ | 7,869 | $ | 8,645 |  |
Non-current assets |  | 8,039 |  | 14,808 |  |
Non-current liabilities |  | 1,114 |  | 694 |  |
Net deferred tax assets | $ | 14,794 | $ | 22,759 |  |
The significant differences between the statutory federal tax rate and the effective income tax rates for the Company for the respective years shown below were as follows:
|  | 2013 | 2012 | 2011
Statutory U.S. federal income tax rate |  | 35.0 | 35.0 | 35.0
Foreign rate differential |  | (4.1) | (1.0) | (0.9)
State income tax, net of federal benefit |  | 4.5 | 3.1 | 4.2
Tax credit |  | (3.1) | - | (2.4)
Increase (Decrease) in valuation reserve for deferred tax assets |  | (11.5) | 7.1 | (211.0)
Other |  | 0.8 | 4.9 | 8.6
|  | 21.6 | 49.1 | (166.5)
The Company’s net operating loss carryforwards and their expirations as of September 27, 2013 were as follows:
| State | United States | Foreign | Total
Year of expiration |  |  |  |  |  |  |  |
2014-2018 | $ | 1,673 | $ | - | $ | 1,226 | $ | 2,899
2019-2023 |  | 1,049 |  | - |  | 1,501 |  | 2,550
2024-2028 |  | 3,211 |  | - |  | 2,006 |  | 5,217
2029-2033 |  | 29,739 |  | - |  | 594 |  | 30,333
Indefinite |  | - |  | - |  | 9,135 |  | 9,135
Total | $ | 35,672 | $ | - | $ | 14,462 | $ | 50,134
The Company has tax credit carryforwards comprised of foreign tax credits, research and development and other state credits as shown in the table below.
| State | Federal | Total
Year of expiration |  |  |  |  |  |
2014-2018 | $ | 767 | $ | - | $ | 767
2019-2023 |  | 1,143 |  | 2,464 |  | 3,607
2024-2028 |  | 767 |  | 386 |  | 1,153
2029-2033 |  | - |  | 765 |  | 765
Indefinite |  | - |  | 93 |  | 93
Total | $ | 2,677 | $ | 3,708 | $ | 6,385
Under generally accepted accounting principles, the Company considers at each reporting period all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed to reduce its deferred tax asset to an amount that is more likely than not to be realized. The determination of the need for a valuation allowance for the deferred tax assets is dependent upon management’s evaluation of both positive and negative evidence. Positive evidence includes the probability of achieving forecasted future taxable income, applicable tax strategies and assessments of the current and future economic and business conditions. Negative evidence includes the Company’s cumulative losses and expiring tax carryforwards. For 2013, the positive impact of the valuation allowance in the amount of $2,831 on tax expense was primarily the result of the expected usage of foreign tax credits of $3,076, offset in part by increases in foreign valuation allowances of $244. Operating losses in France, Netherlands, New Zealand and the United Kingdom were partially offset by income in Italy, Spain and Japan. The change in the valuation allowance in 2012 provided a negative impact of $1,410 to the effective tax expense. This amount was primarily the result of increases in foreign valuation allowances of $1,787, which were partially offset by U.S. usage of tax attributes totaling $377. In fiscal 2012, the Company established a valuation allowance of $173 against the net deferred tax assets in the New Zealand tax jurisdiction based on a cumulative earnings deficit. Additional operating losses in France, Japan, Italy, Spain and United Kingdom also increased the valuation allowance by $1,614 in fiscal 2012. At September 30, 2011, the Company’s federal and state deferred tax assets were comprised of future tax benefits associated with net operating loss carryforwards and future deductions and credits and, prior to a valuation allowance, totaled $34,814. Based upon future projections and the fact that the Company’s U.S. operations generated cumulative profits over the three year period ended September 30, 2011, the Company believed it would generate sufficient taxable income before most tax assets will expire. It therefore concluded during fiscal 2011 that a valuation allowance was no longer required for the majority of the federal deferred tax assets. The decrease in the valuation allowance in 2011, due to usage during the year and the year-end reversal, provided a benefit of $25,305 to the Company’s effective tax expense. This was partially offset by the increase in foreign valuation allowances of $2,419. In fiscal 2011 the Company established a valuation allowance of $903 against the net deferred tax assets in French tax jurisdictions based upon a cumulative earnings deficit. Additional operating losses in Japan, Italy, Spain and United Kingdom also increased the valuation allowance by $1,516 in fiscal 2011. Taxes paid were $2,399, $3,163 and $878 for 2013, 2012 and 2011, respectively. The decrease in deferred tax assets due to utilization of U.S. federal net operating loss carryforwards was $0, $5,260 and $3,135 for 2013, 2012 and 2011, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the last three fiscal years was as follows:
Balance at October 1, 2010 | $ | 1,255
Settlement |  | (168)
Lapse of statute of limitations |  | (122)
Gross increases - tax positions in period |  | 719
Balance at September 30, 2011 | $ | 1,684
Settlement |  | (773)
Lapse of statute of limitations |  | (123)
Gross increases - tax positions in period |  | 1,112
Balance at September 28, 2012 | $ | 1,900
Settlement |  | (186)
Lapse of statute of limitations |  | (214)
Gross increases - tax positions in period |  | 655
Balance at September 27, 2013 | $ | 2,155
Unrecognized tax benefits are included in accrued taxes in the accompanying Consolidated Balance Sheets. In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. The total accrued interest with respect to income taxes was approximately $354 and $361 for the years ended September 27, 2013 and September 28, 2012, respectively. Interest of ($6), $113 and $39 was recorded as a component of income tax expense (benefit) in the accompanying Consolidated Statements of Operations during fiscal years 2013, 2012 and 2011, respectively. The Company is currently undergoing an examination in Italy. There was a change in unrecognized tax benefits as a result of the settlement of a tax audit in Italy in the year ended September 28, 2012 and in Germany in the year ended September 30, 2011. The amount of unrecognized tax benefits recognized within the next twelve months may decrease due to expiration of the statute of limitations for certain years in various jurisdictions. However, it is possible that a jurisdiction may open an audit prior to the statute expiring or one of the above audits may adjust the Company’s tax filings. At this time, an estimate of the range of the reasonably possible change cannot be made. The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The following tax years remain subject to examination by the respective major tax jurisdictions:
Jurisdiction | Fiscal Years
United States | 2010-2013
Canada | 2009-2013
France | 2009-2013
Germany | 2009-2013
Italy | 2009-2013
Japan | 2012-2013
Switzerland | 2003-2013
The Company has not provided additional U.S. income taxes on $118,542 of undistributed earnings of consolidated foreign subsidiaries included in Shareholders’ Equity attributable to Johnson Outdoors. Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation. The Company’s intent is for such earnings to be reinvested by the subsidiaries or to be repatriated only when it would be tax effective through the utilization of foreign tax credits. It is not practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings. As of September 27, 2013, the Company held approximately $45,900 of cash and cash equivalents in foreign jurisdictions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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