INCOME TAXES	6 Months Ended
Jun. 26, 2015
INCOME TAXES [Abstract]
INCOME TAXES	Note 7. INCOME TAXES The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company and its subsidiaries are generally no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2010. As a result of the acquisition of Ft. Wayne Holdings Inc. (“FTW”), the Company recorded deferred tax liabilities of $2.4 million which reduced its net deferred tax assets. The reduction in deferred tax assets caused a release of a valuation allowance of $2.3 million in the six months ended June 27, 2014. As of June 26, 2015 the Company had deferred tax assets, net of deferred tax liabilities, of $79.8 million subject to a valuation allowance of $80.0 million. As of December 31, 2014 the Company had deferred tax assets, net of deferred tax liabilities, of $78.9 million subject to a valuation allowance of $79.0 million. Domestic net operating loss (“NOL”) carry forwards comprised $63.1 million and 62.1 million of the deferred tax assets as of June 26, 2015 and December 31, 2014. Katy’s history of operating losses in many of its taxing jurisdictions provides significant negative evidence with respect to the Company’s ability to generate future taxable income. The valuation allowance relates to federal, state and foreign net operating loss carry-forwards, foreign and domestic tax credits, and certain other deferred tax assets to the extent they exceed deferred tax liabilities. Accounting for Uncertainty in Income Taxes Included in the balances at each of June 26, 2015 and December 31, 2014 are $0.1 million of liabilities for unrecognized tax benefits. Because of the impact of deferred tax accounting, other than interest and penalties, the recognition of these liabilities would not affect the annual effective tax rate. The Company recognizes interest and penalties accrued related to the unrecognized tax benefits in the income tax provision. The Company had approximately $25,000 of interest and penalties accrued at each of June 26, 2015 and December 31, 2014.

INCOME TAXES

6 Months Ended

Jun. 26, 2015

Note 7. INCOME TAXES

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company and its subsidiaries are generally no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2010.

As a result of the acquisition of Ft. Wayne Holdings Inc. (“FTW”), the Company recorded deferred tax liabilities of $2.4 million which reduced its net deferred tax assets. The reduction in deferred tax assets caused a release of a valuation allowance of $2.3 million in the six months ended June 27, 2014.

As of June 26, 2015 the Company had deferred tax assets, net of deferred tax liabilities, of $79.8 million subject to a valuation allowance of $80.0 million. As of December 31, 2014 the Company had deferred tax assets, net of deferred tax liabilities, of $78.9 million subject to a valuation allowance of $79.0 million. Domestic net operating loss (“NOL”) carry forwards comprised $63.1 million and 62.1 million of the deferred tax assets as of June 26, 2015 and December 31, 2014. Katy’s history of operating losses in many of its taxing jurisdictions provides significant negative evidence with respect to the Company’s ability to generate future taxable income. The valuation allowance relates to federal, state and foreign net operating loss carry-forwards, foreign and domestic tax credits, and certain other deferred tax assets to the extent they exceed deferred tax liabilities.

Accounting for Uncertainty in Income Taxes

Included in the balances at each of June 26, 2015 and December 31, 2014 are $0.1 million of liabilities for unrecognized tax benefits. Because of the impact of deferred tax accounting, other than interest and penalties, the recognition of these liabilities would not affect the annual effective tax rate.

The Company recognizes interest and penalties accrued related to the unrecognized tax benefits in the income tax provision. The Company had approximately $25,000 of interest and penalties accrued at each of June 26, 2015 and December 31, 2014.