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Income Taxes | 12 Months Ended
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Sep. 30, 2016
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:
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | 2016 | 2015 | 2014
﻿United States | $ | 28,881 | $ | 11,886 | $ | 11,592
﻿Foreign |  | (5,226) |  | 3,867 |  | 5,830
﻿ | $ | 23,655 | $ | 15,753 | $ | 17,422
﻿ |  |  |  |  |  |
﻿ Income tax expense for the respective years consisted of the following:
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | 2016 | 2015 | 2014
﻿Current: |  |  |  |  |  |
﻿Federal | $ | 9,471 | $ | 4,916 | $ | 3,888
﻿State |  | 1,492 |  | 882 |  | 403
﻿Foreign |  | 986 |  | 1,469 |  | 1,886
﻿Deferred |  | (1,795) |  | (2,130) |  | 2,122
﻿ | $ | 10,154 | $ | 5,137 | $ | 8,299
﻿ |  |  |  |  |  |
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:
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | 2016 | 2015 |
﻿Deferred tax assets: |  |  |  |  |  |
﻿Inventories | $ | 2,041 | $ | 2,495 |  |
﻿Compensation |  | 13,956 |  | 12,312 |  |
﻿Tax credit carryforwards |  | 4,691 |  | 4,888 |  |
﻿Net operating loss carryforwards |  | 7,628 |  | 6,360 |  |
﻿Other |  | 7,558 |  | 5,532 |  |
﻿Total gross deferred tax assets |  | 35,874 |  | 31,587 |  |
﻿Less valuation allowance |  | 10,215 |  | 9,786 |  |
﻿Deferred tax assets |  | 25,659 |  | 21,801 |  |
﻿Deferred tax liabilities: |  |  |  |  |  |
﻿Goodwill and other intangibles |  | 1,571 |  | 1,185 |  |
﻿Depreciation and amortization |  | 5,744 |  | 5,411 |  |
﻿Foreign statutory reserves |  | 497 |  | 520 |  |
﻿Net deferred tax assets | $ | 17,847 | $ | 14,685 |  |
﻿ |  |  |  |  |  |
﻿ The net deferred tax assets recorded in the accompanying Consolidated Balance Sheet as of the years ended September 30, 201 6 and October 2, 201 5 were as follows:
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | 2016 | 2015 |
﻿Non-current assets | $ | 19,063 | $ | 15,867 |  |
﻿Non-current liabilities |  | 1,216 |  | 1,182 |  |
﻿Net deferred tax assets | $ | 17,847 | $ | 14,685 |  |
﻿ |  |  |  |  |  |
﻿ ﻿ 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:
﻿ |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |
﻿ |  | 2016 | 2015 | 2014
﻿Statutory U.S. federal income tax rate |  | 35.0 | % | 35.0 | % | 35.0 | %
﻿Foreign rate differential |  | 0.3 |  | (1.5) |  | (0.5) |
﻿State income tax, net of federal benefit |  | 6.1 |  | 2.4 |  | 4.4 |
﻿Tax credit |  | (3.5) |  | (18.8) |  | (6.3) |
﻿Deferred tax asset valuation allowance |  | 0.8 |  | 10.0 |  | (0.3) |
﻿Uncertain tax positions, net of settlements |  | 1.4 |  | 1.7 |  | 5.4 |
﻿Goodwill impairment |  | 6.6 |  | 0.0 |  | 10.4 |
﻿Section 199 manufacturer's deduction |  | (4.2) |  | (3.7) |  | (1.6) |
﻿Amended tax returns |  | 0.0 |  | 3.5 |  | 0.0 |
﻿Other |  | 0.4 |  | 4.0 |  | 1.2 |
﻿ |  | 42.9 | % | 32.6 | % | 47.7 | %
﻿ |  |  |  |  |  |  |
The Company’s net operating loss carryforwards and their expirations as of September 30, 201 6 were as follows: ﻿ ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | State | Foreign | Total
﻿Year of expiration |  |  |  |  |  |
﻿2017-2021 | $ | 6 | $ | 3,084 | $ | 3,090
﻿2022-2026 |  | 2,953 |  | 5,434 |  | 8,387
﻿2027-2031 |  | 31,144 |  | - |  | 31,144
﻿2032-2036 |  | 585 |  | - |  | 585
﻿Indefinite |  | - |  | 9,941 |  | 9,941
﻿Total | $ | 34,688 | $ | 18,459 | $ | 53,147
﻿ |  |  |  |  |  |
The Company has tax credit carryforwards comprised of state credits as shown in the table below. ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ | State | Federal | Total
﻿Year of expiration |  |  |  |  |  |
﻿2017-2021 | $ | 1,499 | $ | - | $ | 1,499
﻿2022-2026 |  | 1,929 |  | - |  | 1,929
﻿2027-2031 |  | 904 |  | - |  | 904
﻿2032-2036 |  | 359 |  | - |  | 359
﻿Indefinite |  | - |  |  |  | -
﻿Total | $ | 4,691 | $ | - | $ | 4,691
﻿ |  |  |  |  |  |
The negative impact of the valuation allowance in 2016 was primarily the result of not realizing a significant portion of net deferred tax assets in certain foreign jurisdiction. In the fourth quarter of 2016, the Company reached the conclusion that it was appropriate to setup a valuation allowance against the deferred tax assets in Austria and Indonesia due to negative operating performance in both of these jurisdictions. ﻿ The negative impact of the valuation allowance in 2015 was primarily the result of not realizing a significant portion of the U.S. state deferred tax assets. In the fourth quarter of 2015, the Company reached the conclusion that it was appropriate to (1) release the valuation allowance against the Italian deferred tax assets due to the sustained positive operating performance of its Italy operations and (2) setup a valuation allowance against the deferred tax assets in Australia and Switzerland due to continued negative operating performance in both of these jurisdictions. ﻿ The positive impact of the valuation allowance in fiscal 2014 of a tax benefit was primarily the result of earnings in Italy, Netherlands, Spain and United Kingdom offsetting operating losses in France, Japan and New Zealand. The Company believed at that time that the negative evidence continued to outweigh the positive evidence and, as such, the valuation allowance during fiscal 2014 remained in place. ﻿ 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. Interest and penalties of $194, $148 and $186 were recorded as a c omponent of income tax expense in the accompanying Consolidated Statements of Operations during fiscal years 2016, 2015 and 2014, respectively. ﻿ A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
﻿ |  |
﻿ |  |
﻿Balance at October 3, 2014 | $ | 3,535
﻿Settlement |  | (103)
﻿Lapse of statute of limitations |  | (329)
﻿Gross increases - tax positions in period |  | 778
﻿Balance at October 2, 2015 | $ | 3,881
﻿Settlement |  | -
﻿Lapse of statute of limitations |  | (391)
﻿Gross increases - tax positions in period |  | 1,606
﻿Balance at September 30, 2016 | $ | 5,096
﻿ |  |
The total accrued interest and penalties with respect to income taxes was approximately $1,079 and $787 for the years ended September 30, 201 6 and October 2, 201 5, respectively. The Company’s liability for unrecognized tax benefits as of September 30, 2016 was $5,100, and if recognized, $4,600 would have an effective tax rate impact. ﻿ The Company has not provided additional U.S. income taxes on $108,552 of undistributed earnings of consolidated foreign subsidiaries included in shareholders’ equity attributable to the Company. Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation. The Company is planning to repatriate foreign earnings in fiscal 2017 and the related U.S. tax liability is anticipated to be offset by foreign tax credits for the foreign income taxes previously paid on these earnings. The Company does not intend or foresee a need to repatriate the remaining undistributed foreign earnings and considers these earnings indefinitely reinvested in the foreign subsidiaries. If at some future date these earnings cease to be indefinitely reinvested and are repatriated, the Company may be subject to additional U.S. income taxes and foreign withholding and other taxes on such amounts. It is not practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings. ﻿ As of September 30, 201 6, the Company held approximately $53,698 of cash and cash equivalents in foreign jurisdictions. ﻿ The Company is currently undergoing examinations in Italy, France and Germany. 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 aforementioned audits may result in adjustments to 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 | 2013-2016
Canada | 2012-2016
France | 2012-2016
Germany | 2009-2016
Italy | 2011-2016
﻿Japan | 2013-2016
Switzerland | 2006-2016
﻿

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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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
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