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Note 7 - Taxes
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6 Months Ended |
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Jul. 02, 2011
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| Income Tax Disclosure [Text Block] |
Note
7 – Taxes
The
Company’s provision for income taxes for the quarters
ended July 2, 2011 and July 3, 2010 is comprised mostly of
state minimum income taxes and interest and penalties on
income tax reserves.
As
of July 2, 2011, the Company’s unaudited condensed
consolidated balance sheet reflects a liability for
unrecognized tax benefits of approximately $5.5 million,
including approximately $2.1 million of accrued interest and
penalties. The Company anticipates that total unrecognized
tax benefits will decrease by approximately $1.1 million,
including interest and penalties of approximately $0.2
million, due to the settlement of certain state and local
income tax liabilities or the expiration of statutes of
limitation within the next twelve months. The Company
currently has U.S. net operating loss carryforwards and has
utilized net operating loss carrybacks. Upon examination, one
or more of these net operating loss carryforwards or
carrybacks may be limited or disallowed.
The
Company maintains a full valuation allowance on all of the
net deferred tax assets due to the weight of significant
negative evidence as of July 2, 2011. Excluding the valuation
allowances on net deferred tax assets, the Company would have
recognized a tax benefit from continuing operations of $2.9
million or an effective tax rate of 40.2% due to the losses
incurred in the quarter ended July 2, 2011. Excluding the
valuation allowances on net deferred tax assets, the Company
would have recognized a tax benefit from continuing
operations of $3.1 million or an effective tax rate of 40.4%
due to the losses incurred in the quarter ended July 3,
2010.
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