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Income Taxes
6 Months Ended
Mar. 29, 2014
Income Tax Expense (Benefit), Continuing Operations [Abstract]  
Income Taxes
INCOME TAXES
Income tax (benefit) expense for the three and six months ended March 29, 2014 was a $1.2 million benefit and a $0.9 million expense, respectively. The effective tax rates for the three and six months ended March 29, 2014 were (7.2) percent and 2.5 percent, respectively, as compared to 9.8 percent and 8.0 percent for the three and six months ended March 30, 2013, respectively. The decrease in the tax expense and effective tax rate for the quarter and fiscal-year-to-date, as compared to the three and six months ended March 30, 2013, was primarily the result of discrete items occurring in the second quarter of fiscal 2014. These discrete items were substantially related to the completion of U.S. federal and state audits during the quarter, which resulted in the reversal of approximately $3.7 million of previously established reserves for uncertain tax positions.
As demonstrated in recent quarters, the Company's effective tax rate fluctuates depending on the geographic distribution of its worldwide earnings.
There were no material additions to the amount of unrecognized tax benefits recorded for uncertain tax positions as of March 29, 2014 as compared to fiscal 2013 year end. The Company recognizes accrued interest and penalties related to the remaining uncertain tax positions in income tax expense. The amount of interest and penalties recorded for both the three and six months ended March 29, 2014 was not material.
It is reasonably possible that a number of uncertain tax positions may be settled within the next 12 months. The Company is currently under examination by various state taxing authorities in the U.S. The Company is not currently undergoing any tax examinations 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 and six months ended March 29, 2014, 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.