Income Taxes

The Company recorded tax expense of $4,990 and $12,676 for the three and six months ended July 2, 2011 and tax expense of $4,268 and $3,495 for the three and six months ended July 3, 2010. The tax expense for the three and six months ended July 2, 2011 and July 3, 2010 primarily resulted from United States ("U.S.") federal and state taxes.

No provision has been made for U.S., state or additional foreign income taxes related to approximately $108,700 of undistributed earnings of foreign subsidiaries which have been, or are intended to be permanently reinvested outside of the U.S. It is not practicable to determine the U.S. federal income tax liability, if any, which would be payable if such earnings were not permanently reinvested outside of the U.S. In the event the foreign subsidiaries repatriate these earnings, the earnings may be subject to U.S. federal and state income taxes.

Subject to meeting certain employment and investment requirements at its Costa Rican facility, the Company was granted a 100% income tax exemption through March 2017.

Deferred Income Taxes

As of July 2, 2011, deferred tax assets of $65,513, net of an $11,645 valuation allowance, were recorded on the balance sheet. As of December 31, 2010, the Company recorded deferred tax assets of $74,982, net of a valuation allowance of $11,391.

The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more-likely-than-not to be realized. Due to strong results and increased confidence that it will continue to generate taxable income into the foreseeable future, the Company released a majority of the valuation allowance on the deferred tax assets during 2010. The Company continues to maintain a valuation allowance against the tax effect of all capital loss carryforwards and certain state net operating loss carryforwards, as management does not believe it is more likely than not that these benefits will be realized in future periods.

Unrecognized Tax Benefits

In the six months ended July 2, 2011, net unrecognized tax benefits decreased $2,183 primarily as a result of the release of certain previously recorded tax liabilities due to the expiration of statute of limitations. The Company's additional unrecognized tax benefits anticipated to be released due to the expiration of statute of limitations on or before December 31, 2011 total $4,984. Interest and penalties associated with unrecognized tax benefits are accrued and classified as a component of tax expense on the statement of income. No other changes to the unrecognized tax benefits are anticipated within the next twelve months.

Net unrecognized tax benefits at July 2, 2011 and December 31, 2010 were as follows:



	July 2, 2011		December 31, 2010
Net unrecognized tax benefits	$	5,167	$	7,350