Note 5 - Income Taxes	9 Months Ended
Jun. 29, 2018
Notes to Financial Statements
Income Tax Disclosure [Text Block]	NOTE 5—INCOME TAXES Our income tax provision in our third quarter of fiscal year 2018 was less than $0.1 million, the same as during our third quarter of fiscal year 2017. Our third quarter of fiscal year 2018 income tax provision is composed primarily of income tax expense for our foreign subsidiaries, state income tax expense, and the true up of estimates to actual returns filed. For the nine -month period ended June 29, 2018, we recorded an income tax expense of less than $0.1 million compared to an income tax provision of $0.3 million for the nine -month period ended June 30, 2017. Our year to date 2018 income tax provision is composed primarily of income tax expense for our foreign subsidiaries, state income tax expense and true-up of estimates to actual returns filed, and the release of valuation allowance in relation to the refundable minimum tax credit carryforward resulting from the tax law changes in the Tax Cuts and Jobs Act of 2017 (see discussion below), while our year to date 2017 income tax provision was composed primarily of income tax expense for our foreign subsidiaries and state income tax expense. The Company established a valuation allowance against deferred tax assets in the U.S. in the first quarter of fiscal year 2012 and has continued to maintain a full valuation allowance in the U.S. through the third quarter of fiscal year 2018, except for the portion of the valuation allowance attributable to the minimum tax credit carryforward. Tax Cuts and Jobs Act of 2017 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “2017 Act”) was enacted, which changes U.S. tax law and includes various provisions that impact our company. The 2017 Act affects our company by (i) changing U.S. tax rates, (ii) reducing our company’s ability to utilize accumulated net operating losses, (iii) allows us to obtain a refund of our minimum tax credit carryforward, (iv) requires a one -time transition tax on unrepatriated foreign earnings and profits, and (v) impacts the estimates of our deferred tax assets and liabilities. Under ASC 740, changes in tax rates and tax laws are accounted for in the period of enactment, and the resulting effects are recorded as discrete components of the income tax provision related to continuing operations in the same period. In accordance with Staff Accounting Bulletin (SAB) No. 118, we have used the best possible data available to reasonably estimate the effect on the current and deferred income taxes resulting from the changes in the tax law and have accounted for such in our income tax provision for the first quarter of fiscal year 2018. We will continue to evaluate the effect of the tax law changes in the subsequent periods until the final determination of the tax liability is complete. Accordingly, the Company has released the valuation allowance on the minimum tax credit carryforward as it can now be refunded as a result of the 2017 Act. In addition, the Company also estimated the undistributed earnings and profits of its foreign subsidiaries and included a one -time section 965 (a) repatriation toll charge in computing federal taxable income. Since the Company is in a net operating loss position, there was no adverse regular federal tax impact as a result of the one -time toll charge inclusion. Further, the Company is not expected to be in AMT position as a result of the one -time toll charge inclusion, given the sufficient AMT operating loss carryforwards and foreign tax credit that can be used to offset any such tax due.

NOTE

5—INCOME

TAXES

Our income tax provision in our

third

quarter of fiscal year

2018

was less than

$0.1

million, the same as during our

third

quarter of fiscal year

2017.

Our

third

quarter of fiscal year

2018

income tax provision is composed primarily of income tax expense for our foreign subsidiaries, state income tax expense, and the true up of estimates to actual returns filed. For the

nine

-month period ended

June 29, 2018,

we recorded an income tax expense of less than

$0.1

million compared to an income tax provision of

$0.3

million for the

nine

-month period ended

June 30, 2017.

Our year to date

2018

income tax provision is composed primarily of income tax expense for our foreign subsidiaries, state income tax expense and true-up of estimates to actual returns filed, and the release of valuation allowance in relation to the refundable minimum tax credit carryforward resulting from the tax law changes in the Tax Cuts and Jobs Act of

2017

(see discussion below), while our year to date

2017

income tax provision was composed primarily of income tax expense for our foreign subsidiaries and state income tax expense. The Company established a valuation allowance against deferred tax assets in the U.S. in the

first

quarter of fiscal year

2012

and has continued to maintain a full valuation allowance in the U.S. through the

third

quarter of fiscal year

2018,

except for the portion of the valuation allowance attributable to the minimum tax credit carryforward.

Tax Cuts and Jobs Act of

2017

December 22, 2017,

the Tax Cuts and Jobs Act of

2017

(the

“2017

Act”) was enacted, which changes U.S. tax law and includes various provisions that impact our company. The

2017

Act affects our company by (i) changing U.S. tax rates, (ii) reducing our company’s ability to utilize accumulated net operating losses, (iii) allows us to obtain a refund of our minimum tax credit carryforward, (iv) requires a

one

-time transition tax on unrepatriated foreign earnings and profits, and (v) impacts the estimates of our deferred tax assets and liabilities.

Under ASC

740,

changes in tax rates and tax laws are accounted for in the period of enactment, and the resulting effects are recorded as discrete components of the income tax provision related to continuing operations in the same period. In accordance with Staff Accounting Bulletin (SAB)

No.

118,

we have used the best possible data available to reasonably estimate the effect on the current and deferred income taxes resulting from the changes in the tax law and have accounted for such in our income tax provision for the

first

quarter of fiscal year

2018.

We will continue to evaluate the effect of the tax law changes in the subsequent periods until the final determination of the tax liability is complete.

Accordingly, the Company has released the valuation allowance on the minimum tax credit carryforward as it can now be refunded as a result of the

2017

Act. In addition, the Company also estimated the undistributed earnings and profits of its foreign subsidiaries and included a

one

-time section

965

(a) repatriation toll charge in computing federal taxable income. Since the Company is in a net operating loss position, there was

adverse regular federal tax impact as a result of the

one

-time toll charge inclusion. Further, the Company is

not

expected to be in AMT position as a result of the

one

-time toll charge inclusion, given the sufficient AMT operating loss carryforwards and foreign tax credit that can be used to offset any such tax due.