Note 5 - Income Taxes

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

5. Income Taxes

We used the estimated effective tax rate (“ETR”) expected to be applicable for the full fiscal year in computing our interim tax provisions. The ETR on income from continuing operations for the

three

months ended

March 31, 2018

and

March 25, 2017

was

20.8%

and

16.7%,

respectively. The tax provision in

2018

and

2017

differs from the U.S. federal statutory rate primarily due to the lack of a provision (benefit) on our domestic income (losses) as a result of our valuation allowance on deferred tax assets, foreign income taxed at different rates, changes in our deferred tax asset valuation allowance, state taxes and interest related to unrecognized tax benefits.

We have

not

adjusted our provisional tax estimates related to the U.S. Tax Cuts and Jobs Act (“Tax Act”) that we recorded in the

fourth

quarter of

2017.

Our accounting remains incomplete as of

March 31,

2018

and will be refined and, if necessary, adjusted throughout

2018

as required by SEC Staff Accounting Bulletin

No.

118

(“SAB

118”

) based on our ongoing analysis of data and tax positions along with new guidance from regulators and interpretation of the law.

Due to the complexity of the Tax Act’s global intangible low-taxed income (“GILTI”) tax rules, we are continuing to evaluate this provision and the application of ASC

740.

Under GAAP, we are allowed to make an accounting policy election to either (i) treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred or (ii) factor such amounts into a company’s measurement of its deferred taxes. We have 

not

yet decided on an accounting policy with respect to the new GILTI tax rules. Our net tax provision for the quarter ended

March 31, 2018

did

not

include any incremental amount of GILTI tax as we expect to utilize existing net operating losses, that have a full valuation allowance, to offset the impact of the GILTI inclusion.

Other than for foreign currency exchange rate changes and the Kita acquisition, there was

no

material change to our unrecognized tax benefits and related accrued interest and penalties during the

three

-month periods ended

March 31, 2018

and

March 25, 2017.