Income Taxes

12 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 8 — Income Taxes

Income tax expense consists of the following for the three years ended June 30:

	2012			2011			2010
Current:
Federal	$	2,733,000		$	2,582,000		$	2,391,000
State		147,000			14,000			30,000
Deferred:
Federal		(13,000	)		(141,000	)		(71,000	)
State		28,000			(7,000	)		—
Income tax expense	$	2,895,000		$	2,448,000		$	2,350,000

A reconciliation of the federal statutory rate to the effective tax rate reflected in the total provision for income taxes is as follows:

	Years Ended June 30,
	2012			2011			2010
Statutory rate		34	%		34	%		34	%
Exempt income from domestic manufacturer’s deduction		(6	)		(3	)		(2	)
Research and development tax credit		(4	)		(1	)		—
Non-deductible expenses:
Adjustment to fair value of contingent earnout liability		31			—			—
Other		2			1			—
State taxes		2			—			—
Effective rate		59	%		31	%		32	%

Deferred income taxes under the liability method 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. Components of the Company’s net deferred income tax asset and liability accounts were as follows at June 30:

	2012			2011
Net deferred tax asset – current:
Inventory valuation reserve	$	184,000		$	305,000
Allowance for uncollectible accounts		140,000			115,000
Unicap		16,000			110,000
Other, net		51,000			49,000
Total	$	391,000		$	579,000
Net deferred tax (liability) asset – noncurrent:
Stock options and restricted stock	$	275,000		$	283,000
Amortization of intangible assets		305,000			328,000
Intangible assets acquired, net		(2,459,000	)		(2,772,000	)
Property, plant and equipment depreciation		(268,000	)		(173,000	)
Amortization of goodwill		(358,000	)		(326,000	)
Other, net		76,000			58,000
Total	$	(2,429,000	)	$	(2,602,000	)

ASC 740, “Income Taxes,” requires the Company to review all open tax years in all tax jurisdictions to determine if there are any uncertain income tax positions that require recognition in the Company’s financial statements, including any penalties and interest, based on the “more-likely-than-not” criterion. Based on its review, the Company has concluded that there were no significant income tax positions that would require the recording of additional income taxes in the Company’s financial statements at June 30, 2012. There were no unallocated tax reserves at June 30, 2012. The Company’s federal income tax returns for fiscal years prior to 2008 are no longer subject to examination by the Internal Revenue Service.