Income Taxes

6 Months Ended

Sep. 24, 2011

Income Taxes [Abstract]

Income Taxes

6.Income Taxes

We recorded income tax expense of $6.8 million and $12.0 million for the second quarter and first six months of fiscal year 2012, both of which were primarily non-cash charges, on pre-tax income of $18.0 million and $32.5 million, respectively, yielding effective tax rates of 37.5 percent and 37.1 percent, respectively.  Our income tax expense for the second quarter and first six months of fiscal year 2012 is based on estimated effective tax rates derived from an estimate of consolidated earnings before taxes, adjusted for nondeductible expenses and other permanent differences for fiscal year 2012.  The estimated effective tax rates were impacted primarily by the worldwide mix of consolidated earnings before taxes.  Our income tax expense for the second quarter and first six months of fiscal year 2012 was slightly above the federal statutory rate primarily due to the effect of state income taxes and nondeductible expenses.

We recorded an income tax benefit of $1.6 million and $1.4 million for the second quarter and first six months of fiscal year 2011 on pre-tax income of $29.3 million and $47.0 million, respectively, yielding an effective tax benefit rate of 5.5 percent and 3.1 percent, respectively. Our income tax benefit for the second quarter and first six months of fiscal year 2011 was based on an estimated effective tax rate, which was derived from an estimate of consolidated earnings before taxes for fiscal year 2011.  The estimated effective tax rate was impacted primarily by the worldwide mix of consolidated earnings before taxes and an assessment regarding the ability to realize our deferred tax assets.  This assessment resulted in a $2.2 million increase in deferred tax assets for the three months ended September 25, 2010. Our income tax expense for the second quarter and first six months of fiscal year 2011 was less than the Federal statutory rate primarily as a result of the utilization of a portion of our U.S. deferred tax asset and related valuation allowance.

        We had no unrecognized tax benefits as of September 24, 2011.  We do not expect our unrecognized tax benefits to change significantly over the next 12 months.  Our policy is to recognize interest and penalties related to income tax matters in income tax expense. As of September 24, 2011, the balance of accrued interest and penalties was zero. No interest or penalties were incurred during the first six months of fiscal year 2012. 

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. Fiscal years 2008 through 2011 remain open to examination by the major taxing jurisdictions to which we are subject.