KTCC » Topics » Income Taxes

These excerpts taken from the KTCC 10-Q filed May 8, 2009.

Income Taxes

We had domestic tax loss carryforwards of approximately $42.9 million and other future deductible temporary differences and tax credit carryforwards at June 28, 2008. In accordance with SFAS No. 109, we assess the sources of future taxable income, based on management’s estimates, which may be available to recognize the deductible differences that comprise deferred tax assets. A valuation allowance against deferred tax assets is required if it is more likely than not that some or all of the deferred tax assets will not be realized. We have determined that a valuation allowance of $11.1 million on the total deferred tax asset is appropriate as of March 28, 2009. Our judgments regarding future use of deferred tax assets may change due to changes in market conditions, changes in tax laws or other factors. If our assumptions and estimates change in the future, the valuation allowance will be adjusted accordingly and any increase or decrease will result in an additional income tax expense or benefit.

Income Taxes

We had domestic tax loss carryforwards of approximately $42.9 million and other future deductible temporary differences and tax credit carryforwards at June 28, 2008. In accordance with SFAS No. 109, we assess the sources of future taxable income, which may be available to recognize the deductible differences that comprise deferred tax assets. A valuation allowance against deferred tax assets is required if it is more likely than not that some or all of the deferred tax assets will not be realized. We have determined that a valuation allowance of $11.1 million on the total deferred tax asset is appropriate as of March 28, 2009. Our judgments regarding future use of deferred tax assets may change due to changes in market conditions, changes in tax laws or other factors. If our assumptions and estimates change in the future the valuation allowance will be adjusted accordingly and any resulting increase or decrease will result in an additional income tax expense or benefit.

In addition to our domestic operations, we have subsidiaries in Mexico and China. We are currently applying certain tax credits to offset the income tax liabilities of our Mexican subsidiaries. As of January 1, 2008, we became subject to a Mexican business flat tax called Impuesto Empresarial a Tasa Unica (IETU). The effect of IETU and an associated presidential decree on fiscal year 2009 has been included in the effective tax rate for the nine months ended March 28, 2009 and was approximately $196,000. We continue to pay income tax in China which totaled approximately $21,000 for the nine months ended March 29, 2008. Accordingly, the income tax provisions for the third quarter of fiscal years 2009 and 2008 are primarily attributable to the taxable earnings of our foreign subsidiaries.

These excerpts taken from the KTCC 10-Q filed Feb 10, 2009.

Income Taxes

We had domestic tax loss carryforwards of approximately $42.9 million and other future deductible temporary differences and tax credit carryforwards at June 28, 2008. In accordance with SFAS No. 109, we assess the sources of future taxable income, based on management’s estimates, which may be available to recognize the deductible differences that comprise deferred tax assets. A valuation allowance against deferred tax assets is required if it is more likely than not that some or all of the deferred tax assets will not be realized. We have determined that a valuation allowance of $11.0 million on the total deferred tax asset is appropriate as of December 27, 2008. Our judgments regarding future use of deferred tax assets may change due to changes in market conditions, changes in tax laws or other factors. If our assumptions and estimates change in the future, the valuation allowance will be adjusted accordingly and any increase or decrease will result in an additional income tax expense or benefit.

Income Taxes

We had domestic tax loss carryforwards of approximately $42.9 million and other future deductible temporary differences and tax credit carryforwards at June 28, 2008. In accordance with SFAS No. 109, we assess the sources of future taxable income, which may be available to recognize the deductible differences that comprise deferred tax assets. A valuation allowance against deferred tax assets is required if it is more likely than not that some or all of the deferred tax assets will not be realized. We have determined that a valuation allowance of $11.0 million on the total deferred tax asset is appropriate as of December 27, 2008. Our judgments regarding future use of deferred tax assets may change due to changes in market conditions, changes in tax laws or other factors. If our assumptions and estimates change in the future the valuation allowance will be adjusted accordingly and any resulting increase or decrease will result in an additional income tax expense or benefit.

The income tax provisions for the second quarters of fiscal year 2009 and 2008 are primarily due to foreign income tax payable on behalf of our subsidiaries in China and Mexico. The domestic income tax attributable to current period operations was absorbed by net operating loss carryforwards still covered by deferred tax asset reserves. We applied certain tax credits to offset all of the tax liabilities of our Mexican subsidiaries in previous years. We are expecting to pay income taxes for calendar year 2008 due to recently enacted tax laws in Mexico.

This excerpt taken from the KTCC 10-Q filed Nov 10, 2008.

Income Taxes

We had domestic tax loss carryforwards of approximately $42.9 million and other future deductible temporary differences and tax credit carryforwards at June 28, 2008. In accordance with SFAS No. 109, we assess the sources of future taxable income, which may be available to recognize the deductible differences that comprise deferred tax assets. A valuation allowance against deferred tax assets is required if it is more likely than not that some or all of the deferred tax assets will not be realized. We have determined that a valuation allowance of $11.1 million on the total deferred tax asset is appropriate as of September 27, 2008. Our judgments regarding future use of deferred tax assets may change due to changes in market conditions, changes in tax laws or other factors. If our assumptions and estimates change in the future the valuation allowance will be adjusted accordingly and any resulting increase or decrease will result in an additional income tax expense or benefit.

The income tax provisions for the first quarters of fiscal year 2009 and 2008 are primarily due to foreign income tax payable on behalf of our subsidiaries in China and Mexico. The domestic income tax attributable to current period operations was absorbed by net operating loss carryforwards still covered by deferred tax asset reserves. We applied certain tax credits to offset all of the tax liabilities of our Mexican subsidiaries in previous years. We are expecting to pay income taxes in calendar year 2008 due to recently enacted tax laws in Mexico.

These excerpts taken from the KTCC 10-K filed Sep 15, 2008.

Income Taxes

FACE="Times New Roman" SIZE="2">We have domestic tax loss carryforwards of approximately $42.9 million and other future deductible temporary differences and tax credit carryforwards at June 28, 2008. In accordance with SFAS No. 109, we
assess the sources of future taxable income, which may be available to recognize the deductible differences that comprise deferred tax assets. A valuation allowance against deferred tax assets is required if it is more likely than not that some or
all of the deferred tax assets will not be realized. We have determined that a valuation allowance of $10.8 million on the total deferred tax asset is appropriate at this time. Our judgments regarding future use of deferred tax assets may change due
to changes in market condition, changes in tax laws or other factors. If our assumptions and estimates change in the future the valuation allowance will be adjusted accordingly and any resulting increase or decrease will result in an additional
income tax expense or benefit.

Income Taxes

The Company accounts for income taxes in accordance with provisions of Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Under the asset and liability method prescribed by SFAS No. 109, deferred income taxes are provided for temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. Tax credits are accounted for as a reduction of income taxes in the year the credit is utilized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized. The effect of changes in tax rates is recognized in the period in which the rate change occurs.

 

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Management has no future intent to repatriate remaining undistributed earnings of its foreign subsidiaries. Therefore, the determination of the unrecognized deferred tax liability on foreign subsidiary undistributed earnings is not practicable.

This excerpt taken from the KTCC 10-Q filed May 9, 2008.

Income Taxes

The Company had domestic income tax loss carryforwards of approximately $47.9 million at June 30, 2007. In accordance with SFAS No. 109, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. In accordance with SFAS No. 109, management assessed the Company’s recent operating levels and the sources of future taxable income to estimate a partial valuation allowance. Based on projected future operations, management has determined that the net deferred tax asset of $5.0 million continues to be appropriate.

The income tax provisions for the third quarters of fiscal year 2008 and 2007 are primarily due to foreign income tax payable on behalf of the Company’s subsidiaries in China and Mexico. The domestic income tax attributable to current period operations was absorbed by net operating loss carryforwards still covered by deferred tax asset reserves. The Company applied certain tax credits to offset the tax liabilities of its Mexican subsidiaries during calendar years 2006 and 2007. The Company is expecting to pay income taxes in calendar year 2008 due to recently enacted tax laws in Mexico.

This excerpt taken from the KTCC 10-Q filed Feb 12, 2008.

Income Taxes

The Company had domestic income tax loss carryforwards of approximately $47.9 million at June 30, 2007. In accordance with SFAS No. 109, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. In accordance with SFAS No. 109, management assessed the Company’s recent operating levels and the sources of future taxable income to estimate a partial valuation allowance. Based on projected future operations, management has determined that the net deferred tax asset of $5.0 million continues to be appropriate.

The income tax provisions for the second quarters of fiscal year 2008 and 2007 are primarily due to foreign income tax payable on behalf of the Company’s subsidiaries in China and Mexico, as the domestic income tax attributable to current period operations was absorbed by net operating loss carryforwards still covered by deferred tax asset reserves. The Company applied certain tax credits to offset the tax liabilities of its Mexican subsidiaries during calendar years 2006 and 2007. The Company is expecting to pay income taxes in calendar year 2008 due to recently enacted tax laws in Mexico.

This excerpt taken from the KTCC 10-Q filed Nov 13, 2007.

Income Taxes

The Company had domestic income tax loss carryforwards of approximately $47.9 million at June 30, 2007. In accordance with SFAS No. 109, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. In accordance with SFAS No. 109, management assessed the Company’s recent operating levels and the sources of future taxable income to estimate a partial valuation allowance. Based on projected future operations, management has determined that the net deferred tax asset of $5.0 million continues to be appropriate.

The income tax provisions for the first quarters of fiscal year 2008 and 2007 are primarily due to foreign income tax payable on behalf of the Company’s subsidiary in China, as the domestic income tax attributable to current period operations was absorbed by net operating loss carryforwards still covered by deferred tax asset reserves. The Company is applying certain tax credits to offset the tax liabilities of its Mexican subsidiaries during calendar years 2006 and 2007. The Company is currently reviewing recently passed tax laws in Mexico for their effect on the Company. It appears that the Company may be required to pay a set minimum income tax in Mexico beginning in the third quarter of the Company’s fiscal year 2008.

This excerpt taken from the KTCC 10-K filed Sep 17, 2007.

Income Taxes

The Company accounts for income taxes in accordance with provisions of Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Under the asset and liability method prescribed by SFAS No. 109, deferred income taxes are provided for temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. Tax credits are accounted for as a reduction of income taxes in the year the credit originates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that will likely be realized. The effect of changes in tax rates is recognized in the period in which the rate change occurs. Management has no future intent to repatriate remaining undistributed earnings of its foreign subsidiaries. Therefore, the determination of the unrecognized deferred tax liability on foreign subsidiary undistributed earnings is not practicable.

This excerpt taken from the KTCC 10-Q filed May 15, 2007.

Income Taxes

The Company has domestic tax loss carryforwards of approximately $56.5 million at July 1, 2006. In accordance with Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, a valuation allowance is required if it is more likely

 

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than not that some or all of the deferred tax assets will not be realized in the future. In accordance with SFAS No. 109, management assessed the Company’s recent operating levels and the sources of future taxable income to estimate a partial valuation allowance. A valuation allowance against deferred tax assets is required if it is more than likely than not that some of the deferred tax assets will not be realized. Based on projected future operations, management has determined that the net deferred tax asset of $5.0 million continues

to be appropriate. Therefore, the Company is effectively releasing a portion of the net deferred tax asset to offset the estimated tax provision for the quarter.

The income tax provision for the first nine months of 2007 is attributable primarily to taxable earnings of the Company’s foreign subsidiary in China. The Company is currently applying certain tax credits to offset the majority of the tax liabilities of its Mexican subsidiaries.

It is possible that future earnings or projections may require adjustments to the valuation allowance on deferred tax assets. If this should occur, an income tax benefit or provision would be recorded which could have a material effect on reported net income and earnings per share in the periods of any adjustment.

This excerpt taken from the KTCC 10-Q filed Feb 13, 2007.

Income Taxes

The Company had domestic tax loss carryforwards of approximately $56.5 million at July 1, 2006. In accordance with Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. In accordance with SFAS No. 109, management assessed the Company’s recent operating levels and the sources of future taxable income to estimate a partial valuation allowance. A valuation allowance against deferred tax assets is required if it is more likely than not that some of the deferred tax assets will not be realized. Based on projected future operations, management has determined that the net deferred tax asset of $5.0 million continues to be appropriate.

 

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The income tax provision for the second quarter and first six months of fiscal year 2007 is primarily due to foreign income tax payable on behalf of the Company’s subsidiary in China. The Company is applying certain tax credits to offset the majority of the tax liabilities of its Mexican subsidiaries during calendar years 2005 and 2006.

 

Backlog

   December 30, 2006    December 31, 2005

Quarter Ended

   $ 43.8 million    $ 50.1 million

Order backlog consists of purchase orders received for products expected to be shipped within the next 12 months although shipment dates are subject to change due to design modifications or other customer requirements. Order backlog should not be considered an accurate measure of future sales.

This excerpt taken from the KTCC 10-Q filed Nov 13, 2006.

Income Taxes

The Company has domestic income tax loss carryforwards of approximately $56.5 million at July 1, 2006. In accordance with Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. In accordance with SFAS No.

 

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109, management assessed the Company’s recent operating levels and the sources of future taxable income to estimate a partial valuation allowance. Based on projected future operations, management has determined that the net deferred tax asset of $5.0 million continues to be appropriate.

The income tax provision for the first quarters of fiscal year 2007 and 2006 are primarily due to foreign income tax payable on behalf of the Company’s subsidiary in China, as the domestic income tax attributable to current period operations was absorbed by net operating loss carryforwards still covered by deferred tax asset reserves. The Company is applying certain tax credits to offset the tax liabilities of its Mexican subsidiaries during calendar years 2005 and 2006.

 

Backlog

   September 30, 2006    October 1, 2005

Quarter Ended

   $ 50.5 million    $ 57.2 million

Order backlog consists of purchase orders received for products expected to be shipped within the next 12 months although shipment dates are subject to change due to design modifications or changes in other customer requirements. Order backlog should not be considered an accurate measure of future sales.

This excerpt taken from the KTCC 10-K filed Sep 18, 2006.

Income Taxes

The Company accounts for income taxes in accordance with provisions of Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes.” Under the asset and liability method prescribed by SFAS No. 109, deferred income taxes are provided for temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. Tax credits are accounted for as a reduction of income taxes in the year the credit originates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that will likely be realized. The effect of changes in tax rates is recognized in the period in which the rate change occurs. Management has no intent to repatriate undistributed earnings of its foreign subsidiaries. Therefore, the determination of the unrecognized deferred tax liability on foreign subsidiary undistributed earnings is not practicable.

 

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This excerpt taken from the KTCC 10-Q filed May 15, 2006.

Income Taxes

The Company had no tax provision in the third quarter of 2006. For the third quarter of the prior fiscal year, the Company had a $(91,000) tax benefit. The Company had no tax provision for the first nine months of 2006. For the first nine months of 2005, the Company had a $147,000 tax provision. The income tax provisions are attributable primarily to taxable earnings of foreign subsidiaries. The reduction in Mexican taxable income in the first nine months of fiscal year 2006 is related to certain Mexican tax credits and reductions in the transfer price for the Company’s Mexican operations. These Mexican tax credits are anticipated to last at least through December 2006 but can change based on political events that cannot be foreseen.

The Company has U.S. federal tax loss carryforwards of approximately $60 million thus eliminating U.S. federal tax liability against current period income. In accordance with FASB No. 109, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. Accordingly, management has determined that a valuation allowance equal to the net deferred tax asset is appropriate.

Although the Company has a history of operating losses, it is possible that future earnings may require the reinstatement of all or a portion of the deferred tax assets. If this should occur, an income tax benefit would be recorded which would have a favorable effect on reported earnings per share in the periods of any adjustment.

This excerpt taken from the KTCC 10-Q filed Feb 13, 2006.

Income Taxes

 

The income tax benefit for the second quarter of fiscal year 2006 was $(7,000) compared to $120,000 tax provision for the second quarter of the prior fiscal year. The Company did not have any provision for income tax for the first six months of 2006 as compared to $238,000 for the same period of fiscal 2005. The income tax provisions are attributable primarily to taxable earnings of foreign subsidiaries. The reduction in the provision in the first six months of fiscal year 2006 is related to a reduction in effective tax rates and temporary tax credits applicable to the Company’s Mexican operations. The Company has domestic federal and state tax loss carryforwards of approximately $60 million thus eliminating federal and state liability against current period income. In accordance with SFAS No. 109, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. Accordingly, management has determined that a valuation allowance equal to the net deferred tax asset is appropriate at this time.

 

This excerpt taken from the KTCC 10-Q filed Nov 14, 2005.

Income Taxes

 

The income tax provision for the first quarter of fiscal year 2006 was $7,000 compared to $117,000 for the first quarter of the prior fiscal year. The income tax provisions are primarily attributable to taxable earnings of foreign subsidiaries. The reduction in the provision in the first quarter of fiscal year 2006 is related to a reduction in effective tax rates applicable to the Company’s Mexican operations. The Company has domestic tax loss carryforwards of approximately $60 million. In accordance with SFAS 109, a valuation allowance is required if it is more likely than not that some or all of the deferred tax assets will not be realized in the future. Accordingly, management has determined that a valuation allowance equal to the net deferred tax asset is appropriate at this time.

 

This excerpt taken from the KTCC 10-K filed Sep 20, 2005.

Income Taxes

 

The Company accounts for income taxes in accordance with provisions of Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes.” Under the asset and liability method prescribed by SFAS No. 109, deferred income taxes are provided for temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. Tax credits are accounted for as a reduction of income taxes in the year the credit originates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that will be likely realized. The effect of changes in tax rates is recognized in the period in which the rate change occurs. Determination of the unrecognized deferred tax liability on foreign subsidiary undistributed earnings is not practicable.

 

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This excerpt taken from the KTCC 10-Q filed May 16, 2005.

Income Taxes

 

The income tax provision (benefit) is attributable to the taxable earnings of foreign subsidiaries. The income tax benefit for the third quarter of fiscal 2005 was $(91,000) compared to a provision of $238,000 for the third quarter of the prior fiscal year. The benefit for the third quarter of fiscal 2005 relates to one of the Company’s Mexican subsidiaries changing its estimated tax for statutory year 2004 by applying certain tax credits when filing its tax return. The income tax provision totaled $147,000 for the first nine months of 2005 as compared to $522,000 for the same period of fiscal 2004. The decrease in the first nine months of fiscal 2005 is attributable to the applied tax credits and reductions in effective tax rates applicable to both of the Company’s Mexican operations. Due to the fact that the Company has made tax payments in excess of its calculated liability in Mexico, the Company has recorded a net tax receivable of approximately $900,000 that will be used for reductions of future tax payments or refunded.

 

The Company has domestic federal and state tax loss carryforwards of approximately $59 million thus eliminating federal and state liability against current period income. In accordance with SFAS No. 109, a valuation allowance is required if it is more than likely than not that some or all of the deferred tax assets will not be realized in the future. Accordingly, management has determined that a valuation allowance equal to the net deferred tax asset is appropriate at this time.

 

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This excerpt taken from the KTCC 10-Q filed Feb 16, 2005.

Income Taxes

 

The income tax provision for the second quarter of fiscal year 2005 was $120,000 compared to $110,000 for the first quarter of the prior fiscal year. Income tax totaled $238,000 for the first six months of 2005 as compared to $283,000 for the same period of fiscal 2004. The income tax provisions are attributable primarily to taxable earnings of foreign subsidiaries. The reduction in the provision in the first six months of fiscal year 2005 is related to a reduction in effective tax rates applicable to the Company’s Mexican operations. The Company has domestic federal and state tax loss carryforwards of approximately $59 million thus eliminating federal and state liability against current period income. In accordance with FASB No. 109, a valuation allowance is required if it is more than likely than not that some or all of the deferred tax assets will not be realized in the future. Accordingly, management has determined that a valuation allowance equal to the net deferred tax asset is appropriate at this time.

 

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