Income Taxes

12 Months Ended

Jun. 29, 2014

Income Taxes

Income Taxes

NOTE E - INCOME TAXES:

Provision for income taxes from continuing operations consists of the following (in thousands):

	Year Ended
	June 29,			June 30,
	2014			2013
Current - Federal	$	-		$	-
Current - State		18			33
Deferred - Federal		(722	)		(533	)
Deferred - State		(56	)		(4	)
Provision for income taxes	$	(760	)	$	(504	)

Included in loss from discontinued operations is $59,000 and $94,000 of tax benefit for the fiscal years ended June 29, 2014 and June 30, 2013, respectively.

The effective income tax rate varied from the statutory rate for the years ended June 29, 2014 and June 30, 2013 as reflected below (in thousands):

	June 29,			June 30,
	2014			2013
Federal income taxes based on 34%
of pre-tax income	$	(763	)	$	(538	)
State income tax, net of federal effect		(52	)		22
Permanent adjustments		8			13
Other		47			(1	)
	$	(760	)	$	(504	)

The tax effects of temporary differences that give rise to the net deferred tax assets consisted of the following (in thousands):

	June 29,		June 30,
	2014		2013
Current
Reserve for bad debt	$	98	$	81
Deferred fees		54		52
Other reserves and accruals		798		749
		950		882
Non Current
Credit carryforwards		24		129
Net operating loss carryforwards		181		300
Depreciable assets		734		(261	)
Total gross deferred tax asset		1,889		1,050
Valuation allowance		-		-
Net deferred tax asset	$	1,889	$	1,050

At the end of fiscal 2014, the Company had net operating loss carryforwards totaling $2.0 million that are available to reduce future taxable income and will begin to expire in 2031.  Management believes that future operations will generate sufficient taxable income, along with the reversal of temporary differences, to fully realize the net deferred tax asset.