Note 15 - Income Taxes

3 Months Ended

Mar. 28, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

15. Income Taxes

The Company recognized

$2.2

 million of income tax benefit for the

thirteen

week period ended

March 28, 2020,

as compared to an income tax benefit of

$0.3

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. The consolidated effective income tax rate for both the current period and the prior year period was

27.4%.

The projected fiscal

2020

income tax rates as of

March 28, 2020,

were approximately

27.0%,

28.1%,

and

15.5%

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

15.1%

in the United States, Canada, and Serbia, respectively. 

Differences between the effective tax rate and the applicable U.S. federal statutory rate

may

arise, primarily from the effect of state and local income taxes, share-based compensation, and potential tax credits available to the Company. The actual

2020

effective tax rate

may

vary from the estimate depending on the actual operating income earned in various jurisdictions, the potential availability of tax credits, and the exercise of stock options and vesting of share-based awards. The Company's estimate for the

2020

effective tax rate has

not

been adjusted for any potential impact related to COVID-

19.