INCOME TAXES |
9 Months Ended |
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Oct. 03, 2015 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
INCOME TAXES
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal examinations for years before 2014 or state income tax examinations for years before 2011. The Company completed its 2012 and 2013 federal income tax return examination by the Internal Revenue Service during the second quarter of 2015.
The effective tax rates of 21 percent and 25 percent for the three and nine-month periods ended October 3, 2015, respectively, was lower than the statutory rate of 34 percent primarily due to non-taxable gains associated with an earn-out adjustment made during 2015 combined with life insurance proceeds received in excess of cash surrender value for a former officer of the Company and the benefits of the domestic production activities reduction. The effective tax rates of 30 percent and 29 percent for the three and nine-month periods ended September 27, 2014, respectively, was lower than the 34 percent statutory rate primarily due to a non-taxable earn-out adjustment made in 2014.
As of January 3, 2015, the Company had recorded $1,504,000 of unrecognized tax benefits. A portion of this reserve was reversed during the second quarter of 2015, as the Company settled its examination with the Internal Revenue Service. The remaining unrecognized tax benefit liability was reversed during the third quarter of 2015 as the Company filed its US Federal income tax return, which included filings for method of accounting changes related to these unrecognized tax benefit items. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in the provision for income tax.
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