Income Taxes

9 Months Ended

Sep. 29, 2012

Income Taxes [Abstract]

Income Taxes

Note 5 – Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.  The effective tax rates for the periods ended September 29, 2012 and October 1, 2011 reflect the Company’s expected tax rate on reported income from continuing operations before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States.  Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates.

During the third fiscal quarter of 2012, the Company repatriated $72,100 of cash to the U.S., which substantially completed the $112,500 cash repatriation program the Company initiated in 2008.  This repatriated cash was used to reduce the amount outstanding under the Company’s revolving credit facility.  The tax effect of this repatriation was recorded during the fourth fiscal quarter of 2008.  At the present time, the Company expects that the remaining cash and profits generated by foreign subsidiaries will continue to be reinvested indefinitely.

In January 2011, a new tax law was enacted in Israel which effectively lowered the corporate income tax rate on certain types of income earned after December 31, 2010.  Accordingly, the Company’s deferred tax assets in Israel were written down to reflect the lower rate and a one-time tax expense of $10,024 was recorded in the consolidated condensed statement of operations during the nine fiscal months ended October 1, 2011.

During the nine fiscal months ended September 29, 2012, the liabilities for unrecognized tax benefits increased by $3,134 on a net basis, principally due to increases for positions taken in prior periods and interest expense.