INCOME TAXES (Tables)

12 Months Ended

Oct. 01, 2016

Income from continuing operations by location, the provision (benefit) for income taxes and the effective tax rate

The following table reflects income from continuing operations by location, the provision for income taxes and the effective tax rate for fiscal 2016, 2015, and 2014:



	Fiscal
(dollar amounts in thousands)	2016			2015			2014
United States operations	$	(12,600	)	$	4,178		$	7,700
Foreign operations	67,350			33,527			69,433
Income from operations before tax	54,750			37,705			77,133
Income tax expense/(benefit)	7,638			(12,934		)	14,145
Net income	$	47,112		$	50,639		$	62,988

Effective tax rate	14.0		%	(34.3		)%	18.3		%

Provision (benefit) for income taxes from continuing operations

The following table reflects the provision for income taxes from continuing operations for fiscal 2016, 2015, and 2014:



	Fiscal
(in thousands)	2016			2015			2014
Current:
Federal	$	871		$	1,459		$	843
State	53			76			78
Foreign	21,841			4,707			5,534
Deferred:
Federal	(13,423		)	(20,250		)	5,474
State	12			(10		)	5
Foreign	(1,716		)	1,084			2,211
Provision for income taxes	$	7,638		$	(12,934	)	$	14,145

Effective income tax rate reconciliation

The following table reflects the difference between the provision for income taxes and the amount computed by applying the statutory federal income tax rate for fiscal 2016, 2015, and 2014:



	Fiscal
(in thousands)	2016			2015			2014
Computed income tax expense based on U.S. statutory rate	$	19,163		$	13,197		$	26,997
Effect of earnings of foreign subsidiaries subject to different tax rates	(7,330		)	(6,103		)	(9,763		)
Benefits from foreign approved enterprise zones	(8,531		)	(5,855		)	(17,423		)
Benefits from research and development tax credits (including prior years)	(2,839		)	(4,090		)	—
Change in permanent reinvestment assertion	(9,696		)	(19,704		)	—
Tax impact on restructuring	4,238			—			—
Tax audit settlement	4,889			—			—
Dividend income	—			—			8,190
Effect of permanent items	(2,274		)	1,822			(298		)
Changes in valuation allowance	3,585			2,634			(1,820		)
Foreign operations (withholding taxes, deferred taxes on unremitted earnings, US taxation of foreign earnings)	4,981			4,904			5,906
Reserve for uncertain tax positions	208			886			131
State income tax expense	996			(1,543		)	2,241
Other, net	248			918			(16		)
Provision for income taxes	$	7,638		$	(12,934	)	$	14,145

Net deferred tax balance

The following table reflects the net deferred tax balance, composed of the tax effects of cumulative temporary differences for fiscal 2016 and 2015:



	Fiscal
(in thousands)	2016			2015
Inventory reserves	$	546		$	641
Stock options	647			525
Other accruals and reserves	4,940			3,797
Domestic tax credit carryforwards	8,011			5,035
Net operating loss carryforwards	31,817			32,983
	$	45,961		$	42,981

Valuation allowance	(27,381		)	(23,128		)
Total long-term deferred tax asset (1)	$	18,580		$	19,853

Repatriation of foreign earnings, including foreign withholding taxes	$	20,119		$	27,101
Depreciable assets	9,333			16,735
Total long-term deferred tax liability	$	29,452		$	43,836
Total net deferred tax liability	$	10,872		$	23,983

Reported as
Current deferred tax asset	$	—		$	4,126
Deferred tax asset	16,825			3,230
Current deferred tax liability	—			23
Deferred tax liability	27,697			31,316
Total net deferred tax liability	$	10,872		$	23,983


(1)	Included in other assets on the Consolidated Balance Sheets are deferred tax assets of $16.8 million and $3.2 million as of October 1, 2016 and October 3, 2015, respectively.

Unrecognized tax benefits

The beginning and ending balances of the Company's unrecognized tax benefits are reconciled below for fiscal 2016, 2015, and 2014:



	Fiscal
(in thousands)	2016			2015			2014
Unrecognized tax benefit, beginning of year	$	7,101		$	7,192		$	6,869
Additions for tax positions, current year	519			—			—
Additions for tax positions, prior year	827			5,140			717
Reductions for tax positions, prior year	(994		)	(5,231		)	(394		)
Unrecognized tax benefit, end of year	$	7,453		$	7,101		$	7,192