INCOME TAXES (Tables)

12 Months Ended

May. 03, 2015

Schedule of Allocation of Income Tax Expense

Total income tax expense was allocated as follows:

(dollars in thousands)	2015			2014			2013
income from operations	$	7,885			1,596			1,972
shareholders’ equity, related to the tax benefit arising from stock based compensation		(109	)		(143	)		(76	)
	$	7,776			1,453			1,896

Schedule of Income Tax Expense Attributable to Income from Operations

Income tax expense attributable to income from operations consists of:

(dollars in thousands)	2015			2014			2013
current
federal	$	-			-			-
state		(7	)		-			19
foreign		4,713			3,323			2,297
		4,706			3,323			2,316
deferred
federal		(849	)		1,065			192
state		(52	)		416			14
undistributed earnings – foreign subsidiaries		(260	)		(5,018	)		7,011
U.S. operating loss carryforwards		4,487			1,838			3,665
foreign		(92	)		(42	)		608
valuation allowance		(55	)		14			(11,834	)
		3,179			(1,727	)		(344	)
	$	7,885			1,596			1,972

Schedule of Income (Loss) before Income Taxes related to Foreign and U.S. Operations

Income (loss) before income taxes related to the company’s foreign and U.S. operations consists of:

(dollars in thousands)	2015			2014			2013
Foreign
China	$	12,531			11,512			10,593
Canada		2,695			2,149			2,075
Poland		(260	)		(370	)		(630	)
Total Foreign		14,966			13,291			12,038

United States		7,990			5,752			8,251
	$	22,956			19,043			20,289

Summary of Differences in Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate

The following schedule summarizes the principal differences between the income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2015			2014			2013
federal income tax rate		34.0	%		34.0	%		34.0	%
foreign tax rate differential		(6.7	)		(7.2	)		(6.7	)
increase in the liability for uncertain tax positions		3.7			4.3			4.0
undistributed earnings from foreign subsidiaries		3.0			(26.3	)		34.6
change in valuation allowance		(0.2	)		0.1			(58.3	)
other		0.5			3.5			2.1
		34.3	%		8.4	%		9.7	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities consist of the following:

(dollars in thousands)	2015			2014
deferred tax assets:
accounts receivable	$	444			274
inventories		2,251			1,801
compensation		4,497			3,200
liabilities and other		1,155			1,109
alternative minimum tax credit		1,320			1,320
property, plant and equipment (1)		447			572
loss carryforwards – U.S.		12,133			17,161
loss carryforwards – foreign		361			311
unrecognized tax benefits – U.S.		(10,349	)		(9,778	)
valuation allowances		(922	)		(977	)
total deferred tax assets		11,337			14,993
deferred tax liabilities:
undistributed earnings on foreign subsidiaries		(1,733	)		(1,993	)
property, plant and equipment (2)		(4,022	)		(4,581	)
goodwill		(1,197	)		(1,028	)
other		(198	)		(134	)
total deferred tax liabilities		(7,150	)		(7,736	)
Net deferred tax asset	$	4,187			7,257

(1)	Pertains to the company’s operations located in China.

(2)	Pertains to the company’s operations located in the U.S. and Canada.

Schedule of Unrecognized Tax Benefit

The following table sets forth the change in the company’s unrecognized tax benefit:

(dollars in thousands)	2015			2014			2013
beginning balance	$	13,740			13,166			12,462
increases from prior period tax positions		588			756			812
decreases from prior period tax positions		(187	)		(182	)		(108	)
increases from current period tax positions		-			-			-
ending balance	$	14,141			13,740			13,166