Income Taxes

3 Months Ended

Apr. 01, 2012

Income Taxes [Abstract]

Income Taxes

15. Income Taxes

The Company’s effective tax rate, as calculated by dividing income tax expense by income before income taxes, for Q1 2012 and Q1 2011 was 46.7% and 37.9%, respectively. The Company’s effective tax rate, as calculated by dividing income tax expense by the difference of income before income taxes minus net income attributable to noncontrolling interest, for Q1 2012 and Q1 2011 was 49.5% and 40.0%, respectively.

The following table provides a reconciliation of the income tax expense at the statutory federal rate to actual income tax expense.

	First Quarter
In Thousands	2012			2011
Statutory expense	$	3,347		$	3,675
State income taxes, net of federal effect		413			458
Valuation allowance adjustment		701			—
Noncontrolling interest – Piedmont		(303	)		(254	)
Manufacturing deduction benefit		(275	)		(318	)
Meals and entertainment		233			135
Adjustment for uncertain tax positions		146			153
Other, net		205			92
Income tax expense	$	4,467		$	3,941

As of April 1, 2012, the Company had $4.8 million of uncertain tax positions, including accrued interest, of which $2.4 million would affect the Company’s effective tax rate if recognized. As of January 1, 2012, the Company had $4.7 million of uncertain tax positions, including accrued interest, of which $2.3 million would affect the Company’s effective tax rate if recognized. As of April 3, 2011, the Company had $5.0 million of uncertain tax positions, including accrued interest, of which $2.6 million would affect the Company’s effective tax rate if recognized. While it is expected that the amount of uncertain tax positions may change in the next 12 months, the Company does not expect any change to have a significant impact on the consolidated financial statements.

The Company recognizes potential interest and penalties related to uncertain tax positions in income tax expense. As of April 1, 2012, January 1, 2012, and April 3, 2011, the Company had $.5 million, $.4 million and $.5 million, respectively, of accrued interest related to uncertain tax positions. Income tax expense included interest expense of approximately $35,000 in Q1 2012 and an interest expense of approximately $.1 million in Q1 2011.

Tax years from 2008 remain open to examination by the Internal Revenue Service, and various tax years from 1993 remain open to examination by certain state tax jurisdictions to which the Company is subject due to loss carryforwards.

The Company’s income tax assets and liabilities are subject to adjustment in future periods based on the Company’s ongoing evaluations of such assets and liabilities and new information that becomes available to the Company.