H.	Income Taxes

For the

three

quarters ended

March

31,

2017

and

March

25,

2016,

the Company’s effective income tax rate was

34.8%

and

51.5%,

respectively. Foreign cash repatriation in fiscal

2016

resulted in the recognition of

$2,400

of foreign tax benefits. The net benefits when calculated with regards to the consolidated net loss position increased the prior year tax rate by

12.7%.

A foreign entity with a history of losses and a full valuation allowance, but which had forecasted income in fiscal

2016,

was included in the fiscal

2016

consolidated income tax calculation, as per interim reporting rules. In fiscal

2017

this entity forecasted a loss and, therefore, was not included in the calculation. This resulted in a reduction of the current year rate by

3.4%.

The Company recognized a goodwill impairment in fiscal

2017,

which decreased the effective tax rate by

2.5%.

The mix of earnings by jurisdiction during fiscal

2017

resulted in higher overall applied tax benefit of

$100

which resulted in an increase in the effective tax rate of

1.3%.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company takes into account such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. Due to recent operating income in a certain foreign jurisdiction with a history of generating losses, the Company has evaluated the realizability of the net deferred tax assets related to this jurisdiction. This evaluation concluded that based primarily upon recent losses in this jurisdiction and failure to achieve targeted levels of improvement, a full valuation allowance continues to be necessary. However, it is reasonably possible that this entity

may

begin to achieve targeted levels of improvement in future periods and a full valuation allowance

may

possibly not continue to be necessary.

The Company has not provided for additional U.S. income taxes on cumulative earnings of consolidated foreign subsidiaries that are considered to be reinvested indefinitely. The Company reaffirms its position that these earnings remain permanently invested. Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation.

Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. Under this effective tax rate methodology, the Company applies an estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter.

The Company has approximately

$987

of unrecognized tax benefits, including related interest and penalties, as of

March

31,

2017,

which, if recognized, would favorably impact the effective tax rate. There was no significant change in the total unrecognized tax benefits due to the settlement of audits, the expiration of statutes of limitations or for other items during the quarter ended

March

31,

2017.

Annually, the Company files income tax returns in various taxing jurisdictions inside and outside the United States. In general, the tax years that remain subject to examination are

2011

through

2016

for the major operations in Italy, Canada, Belgium, and Japan. The tax years open to examination in the U.S. are for years subsequent to fiscal

2012.

The state of Wisconsin income tax audit remains ongoing for the fiscal years

2010

through

2015.

During the quarter the Company began a US Federal Income tax audit for the fiscal year

2015

and a Swiss Income tax audit for the period

2012

through

2016.

It is reasonably possible that other audit cycles will be completed during fiscal

2017.