Note 7 - Income Taxes

9 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Text Block]

Note 7 - Income Taxes

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

	Three Months Ended March 31						Nine Months Ended March 31
	2012			2011			2012			2011
Federal and state	$	8		$	12		$	81		$	46
Deferred federal and state		(1,010	)		(1,216	)		(286	)		(1,944	)
Foreign		(15	)		80			87			194
Uncertain tax positions		65			35			81			99
Deferred tax valuation allowance		1,016			1,244			303			2,057
	$	64		$	155		$	266		$	452

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

	Three Months Ended March 31						Nine Months Ended March 31
	2012			2011			2012			2011
Statutory rate		(34.0	)%		(34.0	)%		(34.0	)%		(34.0	)%
State and foreign taxes net of federal tax benefit		0.2			(0.4	)		15.6			(0.4	)
Uncertain tax positions		2.2			1.2			7.1			2.2
Repatriation of foreign earnings		(0.1	)		-			8.1			-
Deferred tax valuation allowance		33.8			38.5			26.4			42.1
		2.1	%		5.3	%		23.2	%		9.9	%

At March 31, 2012 we had federal income tax net operating loss carryovers of approximately $49.7 million expiring in 2029 through 2031.  Our deferred tax valuation allowance was approximately $23.5 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 current credit facility, entered into effective August 2011, our Canadian subsidiary guaranteed the outstanding borrowings under this facility. This guarantee is deemed to be an investment by our subsidiary in U.S. 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.