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Income Taxes
3 Months Ended
Jun. 29, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
During the three months ended June 29, 2014, the Company recorded an income tax expense of $0.3 million from continuing operations. The Company recorded an income tax benefit of $0.1 million in the three months ended June 30, 2013 from continuing operations. The income tax expense recorded in the three months ended June 29, 2014 was primarily due to U.S. federal and state taxes on U.S. earnings. The income tax benefit recorded in the three months ended June 30, 2013 was primarily due to the reversal of uncertain tax positions resulting from statute lapse.
The Company continued to maintain a valuation allowance as a result of uncertainties related to the realization of its net deferred tax assets at June 29, 2014. The valuation allowance was established as a result of weighing all positive and negative evidence. The valuation allowance reflects the conclusion of management that it is more likely than not that benefits from certain deferred tax assets will not be realized. If actual results differ from estimates or the Company's estimates are adjusted in future periods, the valuation allowance may require adjustment which could materially impact the Company’s financial position and results of operations. It is reasonably possible that sometime in the next twelve months, positive evidence will be sufficient to release a material amount of the Company's valuation allowance; however, there is no assurance that this will occur. The required accounting for the potential release would have significant deferred tax consequences and would increase earnings in the quarter in which the allowance is released.
The Company benefits from tax incentives granted by local tax authorities in certain foreign jurisdictions. In the fourth quarter of fiscal 2011, the Company agreed with the Malaysia Industrial Development Board to enter into a new tax holiday which is a full tax exemption on statutory income for a period of 10 years commencing April 4, 2011. This tax holiday is subject to the Company meeting certain financial targets, investments, headcounts and activities in Malaysia.
The Company believes that it is reasonably possible that a decrease of up to $2.0 million in unrecognized tax benefits may occur within the next twelve months due to settlements with tax authorities or statute lapses.
In fiscal 2013, the Internal Revenue Service commenced a tax audit for fiscal years beginning 2011 through 2012. Although the final outcome is uncertain, based on currently available information, the Company believes that the ultimate outcome will not have a material adverse effect on its financial position, cash flows or results of operations.
As of June 29, 2014 , the Company was subject to examination in various state and foreign jurisdictions for tax years 2007 forward, none of which were individually material.