Income Taxes

9 Months Ended

Oct. 08, 2011

Income Taxes

Income Tax Disclosure [Text Block]

Note 9 – Income Taxes

                For the third quarter 2011 and 2010, our tax expense was $6.6 million and $7.5 million, respectively.  During year-to-date 2011 and 2010, our tax expense was $18.1 million and $20.1 million, respectively.

                The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted for any discrete events, which are reported in the period that they occur.  This estimate is re-evaluated each quarter based on the Company’s estimated tax expense for the full fiscal year.  The third quarter 2011 and 2010 Company effective tax rate was impacted by the reversal of previously unrecognized tax benefits primarily due to statute of limitations expirations.  The effect of these discrete events in the third quarter 2011 was less than ($0.1) million and ($2.2) million for 2010.  For the third quarter and year-to-date periods of 2011, the effective tax rate was 39.7% and 39.6%, respectively as compared to 32.8% and 37.2% for the third quarter and year-to-date periods of 2010, respectively. 

                The total amount of unrecognized tax benefits as of the end of the third quarter 2011 was $2.0 million.  The net increase in unrecognized tax benefits of $0.1 million since June 18, 2011 is due to the increase in unrecognized tax benefits as a result of tax positions taken in prior periods.  The total amount of tax benefits that if recognized would impact the effective tax rate was $0.5 million at the end of the third quarter 2011.  We recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense.  At the end of the third quarter 2011, we had approximately $0.2 million for the payment of interest and penalties accrued.

                We do not expect our unrecognized tax benefits to change significantly over the next 12 months. 

                The Company or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions.  With few exceptions, we are no longer subject to U.S. federal, state or local examinations by tax authorities for years 2006 and prior.