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INCOME TAXES
3 Months Ended
Sep. 28, 2013
Income Tax Disclosure [Abstract]  
INCOME TAXES
Income Taxes
The Company expects to repatriate a portion of its foreign earnings based on increased sales growth driving additional capital requirements domestically, cash requirements for potential acquisitions and to implement certain tax strategies. The Company currently expects to repatriate approximately $9.6 million of foreign earnings in the future. As such, these earnings would be recognized in the United States, and the Company would be subject to U.S. federal income taxes and potential withholding taxes in foreign jurisdictions. Both the domestic tax and estimated withholding tax of expected repatriation of foreign earnings have been recorded as part of deferred taxes as of September 28, 2013. All other unremitted foreign earnings are expected to remain permanently reinvested for planned fixed assets purchases and improvements in foreign locations.
The Company has available approximately $5.4 million of federal research and development tax credits as of September 28, 2013. ASC 740 requires the Company to recognize in its financial statements uncertainties in tax positions taken that may not be sustained upon examination by the taxing authorities. Accordingly, as of September 28, 2013, the Company has recorded $3.1 million to date of unrecognized tax benefits associated with these federal tax credits, resulting in a net deferred tax benefit of approximately $2.3 million.
The Company has a wholly owned foreign subsidiary in Mexico that utilizes certain tax credits related to production assets that currently offset all of the income tax liabilities under general Mexican income tax law. However, the Company is subject to a Mexican business flat tax called Impuesto Empresarial a Tasa Unica (IETU). The Company anticipates that it will be taxable under IETU based on projected assets used in its operations. As such, the effect of IETU and an associated presidential decree has been included in the effective tax rate for the three months ended September 28, 2013. However, the Mexican government is currently considering a repeal of the IETU regime which may impact the determination of the Mexican subsidiaries effective tax rate at some point during fiscal 2014.