INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2015

Components of income (loss) before income taxes

The components of (loss) income before income taxes are as follows:



	Fiscal Years
	2015			2014			2013
	(Dollars in thousands)
(Loss) income before income taxes:
U.S.	$	(6,630	)	$	(52,815	)	$	(23,526	)
International	1,652			(2,481		)	35,307
	$	(4,978	)	$	(55,296	)	$	11,781

Provision (benefit) for income taxes

The provision (benefit) for income taxes consists of:



	Fiscal Years
	2015		2014		2013
	(Dollars in thousands)
Current:
U.S.	$	1,670	$	1,430	$	(21,264	)
International	1,781		890		710
Deferred:
U.S.	9,439		69,854		10,996
International	1,715		781		(95		)
	$	14,605	$	72,955	$	(9,653	)

Provision for income taxes, reconciliation to applicable U.S. statutory rate

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to earnings (loss) before income taxes, as a result of the following:



	Fiscal Years
	2015		2014		2013
U.S. statutory rate (benefit)	(35.0	)%	(35.0	)%	35.0	%
State income taxes, net of federal income tax benefit	3.7		(0.3	)	3.6
Valuation allowance (1)	362.8		161.9		—
Tax effect of goodwill impairment	—		11.3		—
Foreign income taxes at other than U.S. rates	5.3		1.4		3.5
Tax effect of foreign currency translation gain	—		—		(91.8	)
Work Opportunity and Welfare-to-Work Tax Credits	(53.3	)	(5.2	)	(36.7	)
Expiration of capital loss carryforward	9.5		—		—
Other, net	0.4		(2.2	)	4.5
	293.4	%	131.9	%	(81.9	)%

_______________________________________________________________________________

(1) See Note 1 to the Consolidated Financial Statements.

Components of the net deferred tax assets and liabilities

The components of the net deferred tax assets and liabilities are as follows:



	June 30,
	2015			2014
	(Dollars in thousands)
Deferred tax assets:
Deferred rent	$	14,561		$	14,507
Payroll and payroll related costs	27,646			24,857
Net operating loss carryforwards	17,946			16,977
Tax credit carryforwards	25,296			20,134
Inventories	2,684			2,926
Accrued advertising	4,853			2,707
Insurance	6,779			6,801
Other	6,329			6,323
Subtotal	$	106,094		$	95,232
Valuation allowance	(103,240		)	(86,119		)
Total deferred tax assets	$	2,854		$	9,113
Deferred tax liabilities:
Fixed assets	$	(2,372	)	$	(8,086	)
Goodwill and intangibles	(87,383		)	(77,650		)
Other	(6,309		)	(5,690		)
Total deferred tax liabilities	$	(96,064	)	$	(91,426	)
Net deferred tax liability	$	(93,210	)	$	(82,313	)

Unrecognized tax benefits

A rollforward of the unrecognized tax benefits is as follows:



	Fiscal Years
	2015			2014			2013
	(Dollars in thousands)
Balance at beginning of period	$	1,468		$	10,015		$	4,381
(Reductions)/additions based on tax positions related to the current year	37			(2,114		)	44
(Reductions)/additions based on tax positions of prior years	352			(505		)	7,132
Reductions on tax positions related to the expiration of the statute of limitations	(361		)	(994		)	(1,403		)
Settlements	—			(4,934		)	(139		)
Balance at end of period	$	1,496		$	1,468		$	10,015