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INCOME TAXES | 12 Months Ended
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Sep. 29, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The U.S. and foreign income before income taxes for the respective years consisted of the following:
| 2017 |  | 2016 |  | 2015
United States | $ | 41,463 |  |  | $ | 28,881 |  |  | $ | 11,886 |
Foreign | 6,747 |  |  | (5,226 | ) |  | 3,867 |
| $ | 48,210 |  |  | $ | 23,655 |  |  | $ | 15,753 |
Income tax expense for the respective years consisted of the following:
| 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |
Federal | $ | 13,154 |  |  | $ | 9,471 |  |  | $ | 4,916 |
State | 2,361 |  |  | 1,492 |  |  | 882 |
Foreign | 1,455 |  |  | 986 |  |  | 1,469 |
Deferred | (3,917 | ) |  | (1,795 | ) |  | (2,130 | )
| $ | 13,053 |  |  | $ | 10,154 |  |  | $ | 5,137 |
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:
| 2017 |  | 2016
Deferred tax assets: |  |  |
Inventories | $ | 2,263 |  |  | $ | 2,041 |
Compensation | 14,260 |  |  | 13,956 |
Tax credit carryforwards | 8,203 |  |  | 4,691 |
Net operating loss carryforwards | 5,844 |  |  | 7,628 |
Other | 8,041 |  |  | 7,558 |
Total gross deferred tax assets | 38,611 |  |  | 35,874 |
Less valuation allowance | 8,613 |  |  | 10,215 |
Deferred tax assets | 29,998 |  |  | 25,659 |
Deferred tax liabilities: |  |  |  |  |
Goodwill and other intangibles | 1,805 |  |  | 1,571 |
Depreciation and amortization | 6,802 |  |  | 5,744 |
Foreign statutory reserves | 604 |  |  | 497 |
Net deferred tax assets | $ | 20,787 |  |  | $ | 17,847 |
The net deferred tax assets recorded in the accompanying Consolidated Balance Sheet as of the years ended September 29, 2017 and September 30, 2016 were as follows:
| 2017 |  | 2016
Non-current assets | $ | 22,632 |  |  | $ | 19,063 |
Non-current liabilities | 1,845 |  |  | 1,216 |
Net deferred tax assets | $ | 20,787 |  |  | $ | 17,847 |
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:
| 2017 |  | 2016 |  | 2015
Statutory U.S. federal income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Foreign rate differential | (1.1 | )% |  | 0.3 | % |  | (1.5 | )%
State income tax, net of federal benefit | 4.0 | % |  | 6.1 | % |  | 2.4 | %
Tax credit | (0.9 | )% |  | (3.2 | )% |  | (16.6 | )%
Deferred tax asset valuation allowance | (0.3 | )% |  | 0.8 | % |  | 10.0 | %
Uncertain tax positions, net of settlements | 0.9 | % |  | 1.4 | % |  | 1.7 | %
Goodwill impairment | — | % |  | 6.6 | % |  | — | %
Section 199 manufacturer's deduction | (2.8 | )% |  | (4.2 | )% |  | (3.7 | )%
Taxes related to foreign income, net of credits | (8.7 | )% | * | 0.5 | % |  | (0.8 | )%
Amended tax returns | — | % |  | — | % |  | 3.5 | %
Other | 1.0 | % |  | (0.4 | )% |  | 2.6 | %
| 27.1 | % |  | 42.9 | % |  | 32.6 | %
* Rate benefit is primarily from excess foreign tax credits generated by a dividend repatriation in the first quarter of fiscal 2017. The Company’s net operating loss carryforwards and their expirations as of September 29, 2017 were as follows:
| State |  | Foreign |  | Total
Year of expiration |  |  |  |  |
2018-2022 | $ | — |  |  | $ | 2,336 |  |  | $ | 2,336 |
2023-2027 | 3,071 |  |  | 2,605 |  |  | 5,676 |
2028-2032 | 16,968 |  |  | — |  |  | 16,968 |
2033-2037 | 312 |  |  | — |  |  | 312 |
Indefinite | — |  |  | 9,631 |  |  | 9,631 |
Total | $ | 20,351 |  |  | $ | 14,572 |  |  | $ | 34,923 |
The Company has tax credit carryforwards as follows:
| State |  | Federal |  | Total
Year of expiration |  |  |  |  |
2018-2022 | $ | 1,783 |  |  | $ | — |  |  | $ | 1,783 |
2023-2027 | 1,536 |  |  | 3,894 |  |  | 5,430 |
2028-2032 | 751 |  |  | — |  |  | 751 |
2033-2037 | 239 |  |  | — |  |  | 239 |
Indefinite | — |  |  | — |  |  | — |
Total | $ | 4,309 |  |  | $ | 3,894 |  |  | $ | 8,203 |
A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
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 |
Settlement | (81 | )
Lapse of statute of limitations | (380 | )
Gross increases - tax positions in period | 854 |
Balance at September 29, 2017 | $ | 5,489 |
The total accrued interest and penalties with respect to income taxes was approximately $1,325 and $1,079 for the years ended September 29, 2017 and September 30, 2016, respectively. The Company’s liability for unrecognized tax benefits as of September 29, 2017 was $5,489, and if recognized, $5,094 would have an effective tax rate impact. 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 $185, $194 and $148 were recorded as a component of income tax expense in the accompanying Consolidated Statements of Operations during fiscal years 2017, 2016 and 2015, respectively. The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. At September 29, 2017, the Company was under income tax examination in Italy. 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 the aforementioned audit 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 following tax years remain subject to examination by the Company's respective major tax jurisdictions:
Jurisdiction | Fiscal Years
United States | 2014-2017
Canada | 2013-2017
France | 2014-2017
Germany | 2013-2017
Italy | 2012-2017
Switzerland | 2007-2017
The Company has not provided additional U.S. income taxes on $112,638 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. 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 29, 2017, the Company held approximately $39,205 of cash and cash equivalents in bank accounts 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 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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