Income Taxes

3 Months Ended

Apr. 05, 2020

The Company regularly reviews its tax positions in each significant taxing jurisdiction in the process of evaluating its unrecognized tax benefits. The Company makes adjustments to its unrecognized tax benefits when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position; (ii) a tax position is effectively settled with a tax authority at a differing amount; and/or (iii) the statute of limitations expires regarding a tax position.

The total provision for income taxes included in the condensed consolidated statements of operations consisted of the following:



	Three Months Ended
	April 5, 2020		March 31, 2019
	(In thousands)
Continuing operations	$	974	$	1,312
Discontinued operations	50		41
Total	$	1,024	$	1,353

At April 5, 2020, the Company had gross tax effected unrecognized tax benefits of $34.9 million, of which $33.2 million, if recognized, would affect the continuing operations effective tax rate. The remaining amount, if recognized, would affect discontinued operations.

The Company believes that it is reasonably possible that approximately $4.1 million of its uncertain tax positions at April 5, 2020, including accrued interest and penalties, and net of tax benefits, may be resolved over the next twelve months as a result of lapses in applicable statutes of limitations and potential settlements. Various tax years after 2010 remain open to examination by certain jurisdictions in which the Company has significant business operations, such as Finland, Germany, Italy, Netherlands, Singapore, China and the United States. The tax years under examination vary by jurisdiction.

During the first three months of fiscal years 2020 and 2019, the Company recorded net discrete income tax benefits of $4.9 million and $4.0 million, respectively. The most significant discrete tax benefits recorded in the first three months of fiscal year 2020 include recognition of excess tax benefits on stock compensation of $1.6 million and $3.8 million associated with a valuation allowance reversal during the first three months of fiscal year 2020. The most significant discrete tax benefits recorded in the first three months of fiscal year 2019 include recognition of excess tax benefits on stock compensation of $2.9 million.