Income Taxes

The sources of pretax income are as follows:



	Twelve Months Ended
	June 30, 2013			June 30, 2012		June 30, 2011
	(In thousands)
Domestic	$	37,876		$	27,346	$	29,939
Foreign	(1,960		)	3,144		677
Total	$	35,916		$	30,490	$	30,616

The components of the provision for income taxes are as follows:



	Twelve Months Ended
	June 30, 2013		June 30, 2012			June 30, 2011
	(In thousands)
Current:
Federal	$	8,260	$	11,320		$	6,104
State	1,268		1,129			1,086
Foreign	449		762			604
	9,977		13,211			7,794
Deferred:
Federal	1,801		(151		)	3,837
State	126		283			389
Foreign	4		(41		)	(386		)
	1,931		91			3,840
	$	11,908	$	13,302		$	11,634

The difference between the expected income tax provision applying the domestic federal statutory tax rate and the reported income tax provision is as follows:



	Twelve Months Ended
	June 30, 2013			June 30, 2012			June 30, 2011
	(In thousands)
Expected provision for Federal income taxes at the statutory rate	$	12,570		$	10,670		$	10,710
State income taxes, net of Federal benefit	1,252			970			1,095
Charges without tax benefit	1,231			1,004			16
Change in valuation allowance	(140		)	(544		)	—
Cumulative non-deductible expenses	—			2,139			—
IRC S199 deduction	(844		)	(687		)	(187		)
Research & Development Credit	(1,450		)	—			—
Foreign tax differential	(160		)	—			—
Other	(551		)	(250		)	—
Provision for income taxes	$	11,908		$	13,302		$	11,634

Significant components of the Company’s deferred tax assets and liabilities are as follows:



	June 30, 2013			June 30, 2012
	(In thousands)
Deferred tax assets:
Bad debt reserve	$	310		$	468
Paid-time-off accrual	602			520
Insurance reserve	2,226			2,150
Legal reserve	462			488
Net operating loss benefit and credit carryforwards	3,884			3,788
Valuation allowance	(88		)	(230		)
Accrued compensation and pension	850			759
Stock compensation expense on nonvested deferred shares	943			1,189
Accrued losses	232			298
Other—net	204			150
Total deferred tax assets	9,625			9,580
Deferred tax liabilities:
Tax over book depreciation	9,064			8,512
Tax over book amortization	1,137			691
Prepaid insurance	1,217			—
Other—net	—			428
Total deferred tax liabilities	11,418			9,631
Net deferred tax liability	$	(1,793	)	$	(51	)

As reported in the consolidated balance sheets:



	June 30, 2013			June 30, 2012
	(In thousands)
Current deferred tax assets	$	5,657		$	6,024
Non-current deferred tax liabilities	(7,450		)	(6,075		)
Net deferred tax liability	$	(1,793	)	$	(51	)

The Company has state operating loss carryforwards, state investment tax credit carryforwards and federal foreign tax credit carryforwards of which a portion relates to an acquisition. The valuation allowance at June 30, 2013 and June 30, 2012 reduces the recognized tax benefit of these carryforwards to an amount that will more likely than not be realized. The carryforwards generally expire between 2017 and 2028. The $0.1 million change between June 30, 2012 and June 30, 2013 is the result of the release of the valuation allowance on state net operating loss carryovers which have now been determined to be utilizable.

In general, it is the practice and intention of the Company to reinvest the earnings of its Canadian subsidiaries in these operations. Such amounts become subject to United States taxation upon the remittance of dividends and under certain other circumstances. As of June 30, 2013, unremitted earnings of foreign subsidiaries, which have been or are intended to be permanently invested, aggregated to approximately $3.5 million. The amount of deferred tax liability related to investments in these foreign subsidiaries is $0.4 million.

The Company files tax returns in several taxing jurisdictions in the United States and Canada. With few exceptions, the Company is no longer subject to examination by taxing authorities through fiscal 2008. At June 30, 2013, the Company updated its evaluation of its open tax years in all known jurisdictions. Based on this evaluation, the Company did not identify any uncertain tax positions.