Note 16 - Income Taxes

6 Months Ended

Jul. 02, 2011

Income Tax Disclosure [Text Block]

16. Income Taxes

The effective income tax rate for income from continuing operations was 40.8% for the twenty-six week period ended July 2, 2011.  The current period effective tax rate is comprised of an estimated effective tax rate of 43.4% in the United States offset by an effective tax rate of 27.2% in Canada (due to income tax abatements in Canada in 2011).  The Company also experienced an approximate loss of $0.1 million in Ireland whereby the net effect of a full valuation allowance yielded no tax benefit and increased the Company’s consolidated effective tax rate.

For the twenty-six week period ended July 3, 2010, the Company recognized a nonrecurring current tax benefit of $1.1 million due to the discrete nature of the goodwill and intangible asset tax deduction for the liquidation of its Oracle business unit subsidiary described in Note 15 to the Consolidated Financial Statements.  The Company recognized an impairment of the book goodwill and intangible assets associated with this subsidiary in 2008.  This was offset by regular tax provision expense of $1.9 million on current taxable income from continuing operations, resulting in a cumulative income tax benefit of approximately $0.8 million (not including the tax benefit from discontinued operations).  Excluding the tax benefit from the nonrecurring goodwill and intangible asset tax deduction, the Company’s recognized effective tax rate for the twenty-six week period ended July 3, 2010 was 38.2%.