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Income Taxes
6 Months Ended
Sep. 28, 2013
Income Taxes [Abstract]  
Income Taxes

Note 6 – Income Taxes

The income tax provision  for the three months ended September 28, 2013 was  $943,000 on income before tax of $3,676,000 at the effective tax rate of 26% compared to $269,000 on income before tax of  $959,000 at the effective tax rate of 28%  for the same period of the prior fiscal year.

The provision for income taxes for the six months ended September 28, 2013 was $629,000 on income before tax of $6,248,000 at the effective tax rate of 10% compared to $498,000 on income before tax of $1,785,000 at the effective tax rate of 28% for the same period of the prior fiscal year.  The  decrease in tax rate was primarily due to $949,000 of income tax reserve releases resulting from expirations of statute of limitations on uncertain tax positions during the quarter ended June 29, 2013. There were no such statute of limitations expirations in the six-month period ended September 29, 2012.

The income tax benefit or provision for interim periods may not reflect the Company’s computed estimated annual effective tax rate and differs from the taxes computed at the federal and state statutory rates primarily due to the effects of foreign rate differentials, non-deductible stock-based compensation expense, tax-exempt interest income, R&D tax credits, tax contingencies including liability for uncertain positions and the domestic production activities deduction.

During the six months ended September 28, 2013,  the liability for uncertain income tax positions excluding accrued interest and penalties decreased from $3,160,000 to $2,482,000. Of the total $2,482,000 of unrecognized tax benefits, $1,789,000 represents the amount that, if recognized, would favorably affect the Company’s effective income tax rate in a future period. The Company cannot conclude on the range of cash payments that will be made within the next twelve months associated with its uncertain tax positions.

The Company records interest and penalties related to unrecognized tax benefits in income tax expense. As of September 28, 2013, the Company had approximately $313,000 accrued for estimated interest and $164,000 for estimated penalties related to uncertain tax positions. For the six months ended September 28, 2013, the Company recorded estimated interest reduction of $125,000 and estimated penalties increase of $6,000.  

The balance of unrecognized income tax benefits, including accrued interest and accrued penalties on September 28, 2013, was approximately $160,000 related to tax positions for which it is reasonably possible that the statute of limitations will expire in various jurisdictions within the next twelve months.

The Companys major tax jurisdictions are the United States federal, State of California and Hong Kong, and the Company’s income tax returns are no longer subject to examination by these taxing authorities for fiscal years before 2002.