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Income Taxes
9 Months Ended
Mar. 28, 2015
Income Taxes [Abstract]  
INCOME TAXES

10. INCOME TAXES

Income Tax Expense (Benefit)

Income tax expense (benefit) for the nine months ended March 28, 2015 and March 29, 2014 was $2.8 million and ($521,000), respectively, and was comprised of domestic federal and state income tax and foreign income tax. The income tax benefit for the nine months ended March 29, 2014 included a $1.8 million benefit from the release of tax reserves accrued under ASC 740-10. The effective tax rate for the nine months ended March 28, 2015 was 25%, which resulted from the allocation of earnings between different tax jurisdictions, certain discrete items, and the inability to utilize losses in certain non-includable entities. As of March 28, 2015 and June 28, 2014, the Company has recorded a valuation allowance of $5.1 million against its deferred tax assets.

The Company’s effective tax rate may differ from the federal statutory rate primarily due to the permanent differences related to the benefit of foreign rate differentials, the benefit of generating federal research and development tax credits, income inclusions under Subpart F tax rules, and non-deductible share-based compensation from equity grants.

Accounting for Uncertainty in Income Taxes

The Company’s total amount of unrecognized tax benefits for uncertain tax positions as of March 28, 2015 was $2,248,000. Of this amount, $1,121,000 would affect the Company’s effective tax rate if recognized. In addition, as of March 28, 2015, the Company had accrued $259,000 for any interest and penalties related to unrecognized tax benefits.

The Company is subject to examination by federal, foreign, and various state jurisdictions for the years 2008 through 2014. As of March 28, 2015, one of the Company’s subsidiaries in a foreign tax jurisdiction is under audit for the years 2010 to 2013. A tax provision has been made against the uncertain tax provision in relation to the tax audit. Although the final outcome is uncertain, the Company believes that the ultimate outcome will not have a material adverse effect on its financial position, cash flows or results of operations.