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Income Taxes
6 Months Ended
Mar. 30, 2013
Income Tax Expense (Benefit) [Abstract]  
Income Taxes
INCOME TAXES
Income tax expense for the three and six months ended March 30, 2013 was $2.0 million and $3.0 million, respectively. The effective tax rates for the three and six months ended March 30, 2013 were 9.8 percent and 8.0 percent, respectively. The increase in the effective tax rate for the quarter, compared to current year-to-date, was the result of an assessment from the Internal Revenue Service ("IRS") resulting from an audit of fiscal 2008 through 2010. The decrease in the effective tax rate for the three and six months ended March 30, 2013, as compared to 10.9 percent and 10.0 percent, for the three and six months ended March 31, 2012, respectively, was primarily due to an increase in income in the APAC segment, which benefits from reduced taxes due to tax holidays. Also, as demonstrated in recent quarters, the tax rate can vary during the year based on the mix of forecasted earnings by tax jurisdiction.
As of March 30, 2013, there was no material change in the amount of unrecognized tax benefits recorded for uncertain tax positions as compared to fiscal 2012 year end. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. The amount of interest and penalties recorded for both the three and six months ended March 30, 2013 and March 31, 2012 was not material.
It is reasonably possible that a number of uncertain tax positions may be settled within the next 12 months. The Company is currently under examination by taxing authorities in the U.S.; however, the Company is not currently undergoing any tax examinations in any of the foreign jurisdictions in which the Company has significant operations.
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. During the three and six months ended March 30, 2013, the Company continued to record a full valuation allowance against its net deferred tax assets in the U.S., Germany and Romania and at a certain entity in the United Kingdom, as it is more likely than not that these assets will not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until the need for a valuation allowance is eliminated. The need for a valuation allowance will be eliminated when the Company determines it is more likely than not that the deferred tax assets will be realized.