Note 7 - Income Taxes

6 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Text Block]

Note 7 - Income Taxes

The following presents components of our income tax provisions (in thousands):

	Three Months Ended December 31						Six Months Ended December 31
	2011			2010			2011			2010
Federal and state	$	8		$	15		$	73		$	34
Deferred federal and state		1,073			244			724			(728	)
Foreign		26			(1	)		102			114
Uncertain tax positions		64			36			16			64
Deferred tax valuation allowance		(1,068	)		(213	)		(713	)		813
	$	103		$	81		$	202		$	297

The federal statutory income tax rate reconciles to our effective income tax rate as follows:

	Three Months Ended December 31					Six Months Ended December 31
		2011		2010			2011		2010
Statutory rate		34.0	%	34.0	%		34.0	%	(34.0	)%
State and foreign taxes net of federal tax benefit		1.8		(1.7	)		9.4		(0.6	)
Uncertain tax positions		2.3		4.5			0.9		3.8
Repatriation of foreign earnings		3.3		-			5.0		-
Deferred tax valuation allowance		(37.8	)	(26.7	)		(38.4	)	48.5
		3.6	%	10.1	%		10.9	%	17.7	%

At December 31, 2011 we had federal income tax net operating loss carryovers of approximately $40.8 million expiring in 2029 through 2031.  Our deferred tax valuation allowance was approximately $22.4 million.

Through June 30, 2011, we asserted that our foreign earnings were indefinitely reinvested outside the United States, and we were therefore not required to provide for U.S. income taxes on those earnings. In connection with our new credit facility, entered into effective August 2011, our Canadian subsidiary guaranteed the outstanding borrowings under the facility. This guarantee is deemed to be an investment by our subsidiary in U.S. real property, triggering the repatriation of the subsidiary's earnings in the form of a dividend. The dividend does not result in a current tax liability due to our net operating loss carryforwards; however, the net effect of the repatriation is captured in the tax rate reconciliation above.