Note 15 - Income Taxes

9 Months Ended

Sep. 28, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

15. Income Taxes

The Company recognized

$0.3

million of income tax expense for the

thirty-nine

week period ended

September 28, 2019,

as compared to an income tax expense of

$0.7

million for the comparable prior year period.  The Company recognized a tax benefit of

$0.6

million during the Company’s

first

fiscal quarter of

2019

due to a verbal settlement with the U.S. Internal Revenue Service regarding an uncertain tax position from a previous tax year. Otherwise, the consolidated effective income tax rate for the current period was

25.9%

as compared to

25.8%

for the comparable prior year period.

Not

including the discrete tax benefit of

$0.6

million due to the verbal settlement, the projected fiscal

2019

income tax rates as of

September 28, 2019

were approximately

28.3%,

26.5%

and

15.0%

in the United States, Canada and Serbia, respectively. The relative income or loss generated in each jurisdiction can materially impact the overall effective income tax rate of the Company, particularly the ratio of Canadian and Serbian pretax income versus U.S. pretax income. The comparable prior year period estimated income tax rates were

28.1%,

26.5%

and

15.2%

in the United States, Canada and Serbia, respectively, and yielded a consolidated effective income tax rate of approximately

25.8%

for the

thirty-nine

week period ended

September 29, 2018.

The consolidated effective income tax rate for the

thirty-nine

week period ended

September 28, 2019

was higher than the comparable prior year period primarily due to the reduction in Serbian pretax income relative to consolidated pretax income.