INCOME TAX EXPENSE

9 Months Ended

Jun. 30, 2013

Income Tax Expense [Abstract]

Income Tax Expense

9. INCOME TAX EXPENSE

The third quarter 2013 effective income tax rate from continuing operations was 38.7% compared to 25.7% in the third quarter of 2012. The effective income tax rate from continuing operations in the first nine months of 2013 was 40.5% compared to 32.6% in the prior year period. The income tax expense in the third quarter and first nine months of 2013 was unfavorably impacted by an increase in uncertain tax positions related to a foreign  trans fer pricing accrual increasing the third quarter and year-to-date effective tax rate by 2.7 % and 1.0% ; and the establishment of a valuation allowance on a state tax credit deferred tax asset increasing the third quarter and year-to-date effective tax rate by 2.2% and 0.8%, respectively. The income tax expense in the third quarter and first nine months of 2013 was favorably impacted by the  reduction of a foreign deferred tax liability associated with a fore ign tradename decreasing the third quarter and year-to-date effective tax rate by 3.3% and 0.5%, respectively. The income tax expense in the third quarter and first nine months of 2012 was favorably impacted by a decrease in domestic uncertain tax positions primarily as a result of a lapse of the applicable statute of limitations reducing the third quarter and year-to-date effective tax rate by 11.8% and 4.9%, respectively. The Company estimates the fiscal 2013 effective tax from continuing operations rate will be approximately 39%.

During the three-month period ended June 30, 2013, the Company increased by $0.3 million the amount of unrecognized tax benefits related to a foreign transfer pricing accrual. The Company anticipate s a $1.2 million reduction in the amount of unrecognized tax benefits in the next twelve months as a result of a lapse of the applicable statute of limitations.