INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2013

Reconciliation of gross unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):

	Year Ended March 31,
	2013		2012			2011

Beginning balance	$	316	$	719		$	461
Additions for uncertain tax positions		-		-			403
Reductions to uncertain tax positions		-		(403	)		(145	)
Ending balance	$	316	$	316		$	719

Reconciliation of income taxes to the statutory federal income tax rate

A reconciliation of income taxes computed at the statutory federal income tax rate of 35% to the provision for income taxes included in the consolidated statements of operations is as follows (in thousands, except percentages):

	Year Ended March 31,
	2013			2012			2011

Statutory federal income tax rate		35	%		35	%		35	%
Income tax expense computed at the U.S. statutory federal rate	$	20,555		$	13,850		$	14,199
State income tax expense—net of federal benefit		2,894			2,096			1,861
Non-deductible executive compensation		150			152			81
Other		316			109			700
Provision for income taxes	$	23,915		$	16,207		$	16,841
Effective income tax rate		40.7	%		41.0	%		41.5	%

Components of the provision for income taxes

The components of the provision for income taxes are as follows (in thousands):

	Year Ended March 31,
	2013			2012			2011
Current:
Federal	$	20,041		$	12,266		$	10,604
State		4,453			3,088			3,774
Foreign		36			59			39
Total current expense		24,530			15,413			14,417

Deferred:
Federal		(581	)		814			2,846
State		(34	)		(20	)		(422	)
Total deferred expense (benefit)		(615	)		794			2,424

Provision for income taxes	$	23,915		$	16,207		$	16,841

Components of deferred tax assets and liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (in thousands):

	March 31,
	2013			2012			2011
Deferred Tax Assets:
Accrued vacation	$	1,345		$	1,174		$	1,174
Provision for bad debts		1,997			2,149			1,024
State net operating loss carryforward		1,505			1,217			1,296
Basis difference in fixed assets		-			-			147
Book compensation on discounted stock options		77			262			611
Deferred compensation		898			797			716
Deferred revenue		221			140			203
Foreign tax credit		-			-			72
Federal net operating loss carry forward		168			111			-
Other accruals and reserves		2,043			1,918			1,206
Gross deferred tax assets		8,254			7,768			6,449
Less: valuation allowance		(1,505	)		(1,217	)		(1,296	)
Net deferred tax assets		6,749			6,551			5,153

Deferred Tax Liabilities:
Basis difference in fixed assets		(491	)		(378	)		-
Basis difference in operating leases		(8,765	)		(9,764	)		(8,645	)
Basis difference in tax deductible goodwill		(2,288	)		(2,195	)		(735	)
Total deferred tax liabilities		(11,544	)		(12,337	)		(9,380	)

Net deferred tax liabilities	$	(4,795	)	$	(5,786	)	$	(4,227	)