Income Taxes (Tables)

12 Months Ended

Jan. 01, 2016

Total income tax expense for the fiscal years ended January 1, 2016, January 2, 2015 and January 3, 2014 consisted of the following:

	Fiscal Years
(In thousands)	2015		2014		2013

Current
Federal	$	25,081	$	26,647	$	22,468
Foreign		1,385		896		1,411
State		4,895		5,798		4,824
		31,361		33,341		28,703
Deferred
Federal		(3,411)		(5,059)		(2,703)
State		(416)		(1,018)		(695)
		(3,827)		(6,077)		(3,398)
Total	$	27,534	$	27,264	$	25,305

Reconciliation of Effective Income Tax Rate

The Company’s effective tax rate differs from the statutory federal tax rate of 35% as shown in the following schedule:

	Fiscal Years
(In thousands)	2015			2014			2013

Tax at federal statutory rate	$	24,897		$	23,788		$	22,381
State taxes, net of federal benefit		2,910			3,226			2,819
Tax exempt interest income		(23)			(44)			(36)
Non-deductible expenses		261			289			226
Non-deductible stock-based compensation		(42)			-			(79)
Other		(469)			5			(6)
Tax expense	$	27,534		$	27,264		$	25,305

Effective tax rate		38.7	%		40.1	%		39.6	%

Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at January 1, 2016 and January 2, 2015 are presented in the following schedule:

	Fiscal Years
(In thousands)	2015		2014

Deferred tax assets:
Accrued liabilities and allowances	$	17,780	$	17,244
Deferred compensation		27,425		26,873
Other		43		28
Total deferred tax assets		45,248		44,145

Deferred tax liabilities:
State taxes		(1,850)		(1,717)
Deductible goodwill		(3,014)		(2,978)
Property, equipment and leasehold improvements		(205)		(459)
Unrealized gain of deferred compensation plan assets		(723)		(3,377)
Other		-		-
Total deferred tax liabilities		(5,792)		(8,531)
Net deferred tax assets	$	39,456	$	35,614

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at January 3, 2014	$	1,147,000
Additions based on tax positions related to the current year		486,000
Additions for tax positions of prior years		-
Reductions due to lapse of statute of limitations		(87,000)
Reductions due to change in accounting method		-
Settlements		-
Balance at January 2, 2015	$	1,546,000
Additions based on tax positions related to the current year		406,000
Additions for tax positions of prior years		80,000
Reductions due to lapse of statute of limitations		(154,000)
Reductions due to change in accounting method		-
Settlements		-
Balance at January 1, 2016	$	1,878,000