Note 6 - Income Taxes

3 Months Ended

Aug. 27, 2017

6 .	Income Taxes

The provision for income taxes for the

three

months ended

August 27, 2017

and

August 28, 2016

was

$1.3

million and

$1.9

million respectively. The effective tax rate for the

three

months ended

August 27, 2017

and

August 28, 2016

was

37%

and

36%,

respectively

. The effective tax rate for the

three

months ended

August 27, 2017

and

August 28, 2016

was higher than the statutory federal income tax rate of

35%

primarily due to state income taxes; partially offset by the domestic manufacturing deduction and research and development credits

As of

August 27, 2017

and

May 28, 2017,

the Company had unrecognized tax benefits of approximately

$630

,000

and

$537

,000,

respectively. Included in the balance of unrecognized tax benefits as of

August 27, 2017

and

May 28, 2017

is approximately

$495

,000

and

$419,000,

respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. In the

twelve

months following

August 27, 2017

, the Company expects its unrecognized tax benefits to decrease by approximately

$215,000

The Company has elected to classify interest and penalties related to uncertain tax positions as a component of its provision for income taxes.

The Company has accrued an insignificant amount of interest and penalties relating to the income tax on the unrecognized tax benefits as of

August 27, 2017

and

May 28, 2017

Due to tax attribute carryforwards, the Company is subject to examination for tax years

199

forward for U.S. tax purposes. The Company is also subject to examination in various state jurisdictions for tax years

1998

forward,

none

of which were individually material.