INCOME TAXES

3 Months Ended

Oct. 01, 2011

Income Tax Disclosure [Abstract]

INCOME TAXES

11. INCOME TAXES

Accounting for Uncertainty in Income Taxes

The Company’s total amount of unrecognized tax benefits as of October 1, 2011 was $917,000. All of this amount would affect the corporation’s tax rate if recognized. In addition, as of October 1, 2011 the Company had accrued $78,000 for any interest and penalties related to unrecognized tax benefits. 

Our effective tax rate may differ from the federal statutory rate primarily due to state income taxes, research and development tax credits, stock-based compensation from incentive stock options, and differing tax rates in income-earning foreign jurisdictions, and the inability to utilize losses in certain foreign entities to offset domestic income.

The Company is subject to examination by Federal, foreign, and various state jurisdictions for the years 2005 through 2010. To the Company’s knowledge, there are currently no examinations underway.

Income Tax Expense

Income tax expense for the three months ended October 1, 2011 and October 2, 2010 was $534,000 and $5.4 million, respectively, and was comprised of domestic federal and state income tax and foreign income and withholding tax. As of October 1, 2011, the Company has recorded a valuation allowance of $1.1 million against its deferred tax assets.