
J. INCOME TAXES

	The calculation of the effective tax rate is as follows (in thousands):

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Income from continuing operations before income taxes	$	5,180		$	12,080		$	27,416		$	31,017

Income tax provision		2,233			2,997			10,226			8,211

Income from continuing operations	$	2,947		$	9,083		$	17,190		$	22,806

Effective tax rate		43	%		25	%		37	%		27	%

Our provision for income taxes for continuing operations was $2.2 million in the third quarter of fiscal year 2014, compared to $3.0 million in the third quarter of fiscal year 2013. The effective tax rate for the third quarter of fiscal year 2014 was 43.1% which is above the combined U.S. federal and state statutory rates primarily due to discrete tax items recognized during the quarter as well as the nondeductibility of certain executive compensation costs. The effective tax rate for the third quarter of fiscal year 2013 was 24.8% and was favorably impacted by the utilization of loss carryforwards on Canadian income and the retroactive availability of the Federal Research and Development Tax Credit.

Our provision for income taxes for continuing operations was $10.2 million for the nine months ended June 30, 2014, compared to $8.2 million for the nine months ended June 30, 2013. The effective tax rate for nine months ended June 30, 2014 was 37.3% which approximates the combined U.S. federal and state statutory rates as the majority of our income is attributable to the U.S. The effective tax rate for the nine months ended June 30, 2013 was 26.5% and was favorably impacted by the utilization of loss carryforwards on Canadian income as well as the extension of the Federal Research and Development Tax Credit.