Taxes

6 Months Ended

Jul. 03, 2011

Taxes [Abstract]

Taxes

NOTE 13: Taxes

A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate, or income tax provision, was as follows:

	Three-months Ended				Six-months Ended
	July 3,		July 4,		July 3,		July 4,
	2011		2010		2011		2010
Income tax at federal statutory rate		35%		35%		35%		35%
State income taxes, net of federal benefit		1		1		1		1
Foreign tax rate differential		(13)		(13)		(13)		(13)
Income tax provision		23%		23%		23%		23%

During the six-month period ended July 3, 2011, the Company recorded a $298,000 increase in liabilities, net of deferred tax benefit, for uncertain tax positions that were recorded as income tax expense, of which $149,000 was recorded in the three-month period ended July 3, 2011. Estimated interest and penalties included in these amounts totaled $41,000 for the six-month period ended July 3, 2011, of which $20,000 was recorded in the three-month period ended July 3, 2011.

The Company’s reserve for income taxes, including gross interest and penalties of $1,238,000, was $5,694,000 as of July 3, 2011. All of the Company’s liabilities for uncertain tax positions are classified as non-current as of July 3, 2011. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period, less $160,000 that would be recorded through Additional Paid in Capital. As a result of the expiration of certain statutes of limitations, there is a potential that a portion of these reserves could be released, which would decrease income tax expense by approximately $500,000 to $1,000,000 over the next twelve months.

The Company has defined its major tax jurisdictions as the United States, Ireland, and Japan, and within the United States, Massachusetts and California. The tax years 2007 through 2010 remain open to examination by various taxing authorities in the jurisdictions in which the Company operates.

The Company is currently negotiating an Advanced Pricing Agreement (APA) with Japan that will cover tax years 2006 through 2012. The Company believes it is adequately reserved for these open years. No formal agreement has been reached between the Tax Authorities in Ireland and Japan as of the date of this filing.