Note 7 - Taxes | 9 Months Ended |
|---|---|
Oct. 01, 2011 | |
| Income Tax Disclosure [Text Block] |
Note
7 – Taxes
The
Company’s income tax benefits for the quarters ended
October 1, 2011 and October 2, 2010 are due mostly to the
recognition of tax benefits associated with the expiration of
certain statutes of limitations.
As
of October 1, 2011, the Company’s unaudited condensed
consolidated balance sheet reflects a liability for
unrecognized tax benefits of approximately $4.5 million,
including approximately $2.0 million of accrued interest and
penalties. The Company anticipates that total unrecognized
tax benefits will decrease by approximately $0.1 million,
including interest and penalties of approximately $0.1
million, due to the settlement of certain state and local
income tax liabilities or the expiration of statutes of
limitations 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 presence of significant
negative evidence as of October 1, 2011. In addition, the
Company acquired a subsidiary operating under a Honduran
tax free regime during the quarter ended October 1, 2011.
Excluding the valuation allowances on net deferred tax
assets and the tax effect of the Honduran tax free regime,
the Company would have recognized a tax benefit from
continuing operations of $2.2 million or an effective tax
rate of 69.2% due to the expiration of certain statutes of
limitations and losses incurred in the quarter ended
October 1, 2011. Excluding the valuation allowances on net
deferred tax assets, the Company would have recognized a
tax benefit from continuing operations of $0.5 million or
an effective tax rate of -45.3% due to the expiration of
certain statutes of limitations offset by tax on income in
the quarter ended October 2, 2010. Excluding
the valuation allowances on net deferred tax assets and the
tax effect of the Honduran tax free regime, we would have
recognized a tax benefit from continuing operations of $6.6
million or an effective tax rate of 46.3% due to the
expiration of certain statutes of limitations and losses
incurred in the nine months ended October 1, 2011.
Excluding the valuation allowances on net deferred tax
assets, we would have recognized a tax benefit from
continuing operations of $5.4 million or an effective tax
rate of 49.0% due to the expiration of certain statutes of
limitations and losses incurred in the nine months ended
October 2, 2010.
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