Note 5 - Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Text Block]

NOTE 5: INCOME TAXES

The provision (benefit) for income taxes from continuing operations is comprised of the following:

	Year Ended December 31, 2012		Six Months Ended December 31, 2011			Year Ended June 30, 2011
Current:
Federal	$	-	$	-		$	-
State		318		30			68
		318		30			68
Deferred:
Federal		-		(6,750	)		-
State		-		(1,586	)		-
		-	$	(8,336	)		-
Total	$	318	$	(8,306	)	$	68

A reconciliation of the provision for income taxes from continuing operations at the normal statutory federal rate to the provision included in the accompanying consolidated statements of operations is shown below:

Periods ended,	Year Ended December 31, 2012			Six Months Ended December 31, 2011			Year Ended June 30, 2011
“Expected” provision at federal statutory rate	$	680		$	812		$	(463	)
State income taxes		106			111			(45	)
Bargain purchase gain		-			(4,985	)		-
Change in valuation allowance		(447	)		(4,263	)		204
Change due to state rate change		-			-			320
Other		(21	)		19			52
Provision for income taxes	$	318		$	(8,306	)	$	68
Effective tax rate		16.4	%		(358.2	)%		(5.5	%)

The Company continues to maintain a full valuation allowance against its net deferred tax assets as of December 31, 2012.  During the six month transition period ended December 31, 2011, the Company recorded deferred tax liabilities on the acquired assets from the LDI acquisition.  The Company determined it was more likely than not that it would be able to utilize additional income tax benefits from its existing deferred tax assets that were previously offset by a valuation allowance.  As the resulting valuation allowance release of $4,263 related to the Company's deferred tax assets at December 31, 2011, the release was recorded as an income tax benefit outside of the business combination during the six month transition period ended December 31, 2011.

The tax effects of temporary differences related to deferred income taxes shown on the consolidated balance sheets are as follows:

	December 31, 2012			December 31, 2011			June 30, 2011
Deferred income tax assets:
Post-retirement liability	$	2,277		$	2,520		$	2,595
Deferred income		1,651			1,676			1,796
Stock based compensation		1,857			1,579			1,558
Federal operating loss carry-forwards		11,481			15,788			11,214
Capital loss carryforward		2,243			2,045			-
State tax credits		3,022			3,022			3,022
State operating loss carry-forwards		7,638			8,427			6,858
Other		4,626			4,833			3,947
Less: valuation allowance		(9,053	)		(9,840	)		(13,675	)
Gross deferred income tax assets		25,742			30,050			17,315
Deferred income tax liabilities:
Fixed assets		(20,180	)		(21,860	)		(10,878	)
Equity method investment		(526	)		(1,999	)		(1,939	)
Other		(5,036	)		(6,191	)		(4,498	)
Gross deferred income tax liabilities		(25,742	)		(30,050	)		(17,315	)
Net deferred income tax liability	$	-		$	-		$	-

The Company establishes a valuation allowance against certain deferred income tax assets if management believes, based on its assessment of historical and projected operating results and other available facts and circumstances, that it is  more-likely-than-not that all or a portion of the deferred income tax assets will not be realized.  Management reassessed the need for a valuation allowance for its deferred income tax assets.  It was determined that a valuation allowance was appropriate on its net deferred income tax assets for all periods presented.

As of December 31, 2012, the Company had approximately $32,804 and $93,362 of federal and state net operating loss carry-forwards, respectively.  The federal net operating loss will expire as follows:  $18,917 will expire before the end of calendar year 2028, and $13,887 will expire before the end of calendar year 2031.  Due to varying state carry-forward periods, the state net operating losses will expire between calendar years 2013 and 2031.  The Company has a capital loss carry-forward of $5,615 as of December 31, 2012, of which $1,989, $3,328, and $298 will expire at the end of calendar years 2015, 2016, and 2017, respectively.  The Company also has state tax credit carry-forwards of approximately $3,022.  The state tax credits will expire in varying periods through calendar year 2021.

The Company elected to change its fiscal year for income tax purposes to December 31 to conform with the change in its financial accounting year.

As of December 31, 2012, the total gross amount of unrecognized tax benefits (excluding interest and penalties) was $445, of which $29 would impact the effective tax rate, if recognized.  As of December 31, 2011, the total gross amount of unrecognized tax benefits (excluding interest and penalties) was $445, of which $29 would impact the effective tax rate, if recognized.  As of June 30, 2011, the total gross amount of unrecognized tax benefits (excluding interest and penalties) was $414, of which $29 would impact the effective tax rate, if recognized.

The Company has elected to treat interest and penalties related to tax liabilities as a component of income tax expense.  During the year ended December 31, 2012, and for all periods presented, the Company’s activity in accrued interest and penalties was not significant.

The following is a reconciliation of the total amount of unrecognized tax benefits (excluding interest and penalties) for the year ended December 31, 2012, the six month transition period ended December 31, 2011 and the year ended June 30, 2011:

	Year Ended December 31, 2012		Six Months Ended December 31, 2011			Year Ended June 30, 2011
Beginning of period balance	$	445	$	414		$	365
Additions for tax positions of prior years		-					13
Decreases for tax positions of prior years		-		(1	)		-
Additions for tax positions of the current year		-		32			36
End of period balance	$	445	$	445		$	414

The Company does not expect a significant change in the amount of unrecognized tax benefits in the next twelve months.

The Company’s federal returns for the fiscal years ended June 30, 2004 through June 30, 2011, the short period ended December 31, 2011, and the year ended December 31, 2012 are open to examination as a result of the 5-year net operating loss carry-back claim filed for the fiscal year ended June 30, 2009.  The amount of income taxes that the Company pays is subject to ongoing audits by federal and state taxing authorities.  The Company was under joint committee review by the IRS for its tax year ended June 30, 2009, which was completed during the fiscal year ended June 30, 2011.  The Company’s state income tax returns for the fiscal years ended June 30, 2008 through June 30, 2011 and calendar years ended December 31, 2012 and 2011 remain open to examination by multiple jurisdictions.