Taxes

6 Months Ended

Jul. 01, 2012

Taxes [Abstract]

Taxes

NOTE 12: Taxes

A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate, or income tax provision, was as follows:

	Three-months Ended						Six-months Ended
	July 1, 2012			July 3, 2011			July 1, 2012			July 3, 2011
Income tax at federal statutory rate		35	%		35	%		35	%		35	%
State income taxes, net of federal benefit		1			1			1			1
Foreign tax rate differential		(15	)		(13	)		(15	)		(13	)
Income tax provision		21	%		23	%		21	%		23	%

During the six-month period ended July 1, 2012, the Company recorded a $222,000 increase in liabilities, net of deferred tax benefit, for uncertain tax positions that were recorded as income tax expense, of which $111,000 was recorded in the three-month period ended July 1, 2012. Estimated interest and penalties included in these amounts totaled $63,000 for the six-month period ended July 1, 2012, of which $31,000 was recorded in the three-month period ended July 1, 2012.

The Company’s reserve for income taxes, including gross interest and penalties was $5,624,000 as of July 1, 2012, of which $558,000 was classified as current and $5,066,000 was classified as noncurrent. The amount of gross interest and penalties included in these balances was $1,299,000. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period, less $311,000 that would be recorded through Additional Paid in Capital. As a result of the expiration of certain statutes of limitations, there is a potential that a portion of these reserves could be released, which would decrease income tax expense by approximately $300,000 to $400,000 over the next twelve months.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Japan, and within the United States, Massachusetts and California. Within the United States, the tax years 2006 through 2011 remain open to examination by various taxing authorities due to a 2009 carryback claim, while the tax years 2007 through 2011 remain open to examination by various taxing authorities in other jurisdictions in which the Company operates.