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Income Taxes
3 Months Ended
Dec. 28, 2013
Income Tax Expense (Benefit), Continuing Operations [Abstract]  
Income Taxes
INCOME TAXES
Income tax expense for the three months ended December 28, 2013 and December 29, 2012 was $2.2 million and $1.1 million, respectively. The effective tax rates for the three months ended December 28, 2013 and December 29, 2012 were 11 percent and 6 percent, respectively. The increase in the effective tax rate for the three months ended December 28, 2013, compared to the effective tax rate for the prior year period, was primarily due to an increase in income in China. A tax holiday reducing the tax rate for an entity in China expired on December 31, 2013. The Company anticipates the end of this holiday will have a negligible impact to the annualized effective tax rate for fiscal 2014. As demonstrated in recent quarters, the Company's overall tax rate will vary during the year based on the mix of forecasted earnings by taxing jurisdiction.
As of December 28, 2013, there was no material change in the amount of unrecognized tax benefits recorded for uncertain tax positions as compared to fiscal 2013 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 months ended December 28, 2013 and December 29, 2012 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.; however, the Company is not currently under examination in any of the foreign jurisdictions in which the Company has significant operations.
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. During the three months ended December 28, 2013, the Company continued to record a full valuation allowance against its net deferred tax assets in the U.S., Germany, Romania and the U.K., as it is more likely than not that these assets will not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until the need for a valuation allowance is eliminated. The need for a valuation allowance will be eliminated when the Company determines it is more likely than not that the deferred tax assets will be realized.