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Income Taxes
9 Months Ended
Jun. 30, 2012
Income Tax Expense (Benefit) [Abstract]  
Income Taxes
INCOME TAXES
Income tax expense for the three and nine months ended June 30, 2012 was $1.9 million and $6.1 million, respectively. The effective tax rates for the three and nine months ended June 30, 2012 were 8 and 9 percent, respectively. As demonstrated in recent quarters, the Company’s tax rate can vary during the year based on the mix of forecasted earnings by tax jurisdiction. The Company currently benefits from reduced taxes in the APAC segment due to tax holidays in Penang, Malaysia and Xiamen, China.
Income tax expense for the three and nine months ended July 2, 2011 was $0.7 million and $2.2 million, respectively. The effective tax rates for both the three and nine months ended July 2, 2011 were 3 percent.
As of June 30, 2012, there was no material change in the amounts recorded for uncertain tax positions as compared to the fiscal 2011 year end. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. The amount of interest and penalties recorded for both the three and nine months ended June 30, 2012 and July 2, 2011 was not material.
It is reasonably possible that a number of uncertain tax positions related to federal and state tax positions may be settled within the next 12 months. The Company is currently under examination by taxing authorities in the U.S. for fiscal years 2008 through 2010 and is not undergoing any tax examinations in any of its major foreign jurisdictions. The U.S. examination may be resolved within the next twelve months, but at this time it is not possible to estimate the amount of the effects of any changes to the Company's previously recorded uncertain tax positions.
The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. As of June 30, 2012, there was no material change in the valuation allowance as compared to the fiscal 2011 year end. Despite losses in fiscal years 2009-2011 in the U.S. tax jurisdiction, the Company’s U.S. operations generated income for the three and nine months ended June 30, 2012. Based on the weight of all the evidence, both positive and negative, it is more likely than not that the Company will be able to utilize its U.S. net deferred tax assets and no valuation allowance is warranted. However, if the Company’s U.S. operations cannot sustain forecasted profitability, there may be a need to provide a valuation allowance on the Company’s net U.S. deferred tax assets which approximate $21.4 million as of June 30, 2012.