Note 8 - Income Taxes

9 Months Ended

Jan. 27, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8

.

INCOME TAXES

On

December 22, 2017,

the Tax Cuts and Jobs Act (the “Tax Act”)

was enacted into law. The Tax Act makes changes to the U.S. tax code, including reducing the U.S. federal tax rate from

35%

to

21%

effective

January 1, 2018.

The phasing in of the lower corporate income tax rate results in a blended federal statutory rate of

30.4%

for our fiscal

2018,

compared with the previous

35%

rate. The federal statutory tax rate will be reduced to

21%

in subsequent fiscal years.

On

December 22, 2017,

the U.S. Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin

1

18

(“SAB

118”

), which clarifies accounting for income taxes under FASB’s Accounting Standards Codification

740

in the reporting period that include the enactment date of the Tax Act. SAB

118

allows a company to report provisional estimates in the reporting period that include the enactment date if the company does

not

have the necessary information to fully analyze certain income tax effects of the Tax Act.

We are compelled by regulations to record a

one

-time adjustment to remeasure previous deferred tax liabilities by

$4.3

million and adjust prior year-to-date income tax to the estimated effective tax rate for the full year resulting in a

$7

million reduction in tax expense

.

Accordingly, our effective tax rate for the

third

quarter and

first

nine

months of fiscal

2018

was

10.9%

and

26.9%,

respectively.

 For the

third

quarter and

first

nine

months of fiscal

2017,

the effective tax rate was

34.2%.