Note 7 - Income Taxes

12 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 7 - Income Taxes

Significant components of our net deferred tax assets were (in thousands):

	2013			2012
Net operating loss carryover	$	24,532		$	19,643
Inventory valuation		2,533			1,688
Uncertain tax positions		1,174			1,147
Compensation plans		332			486
Depreciation		152			94
Accounts receivable valuation		554			932
Other, net		1,910			638
		31,187			24,628
Valuation allowance		(30,841	)		(24,486	)
Net	$	346		$	142

Significant components of our income tax expense were (in thousands):

	2013			2012
Current:
Federal	$	-		$	-
State		25			79
Foreign		(142	)		32
		(117	)		111
Deferred:
Federal		(5,719	)		(938	)
State		(531	)		(83	)
Foreign		(318	)		(188	)
Uncertain tax positions		27			147
Valuation allowance		6,355			1,336
		(186	)		274
	$	(303	)	$	385

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

	2013			2012
Statutory rate		(34.0	)%		(34.0	)%
Deferred tax valuation allowance		32.6			40.9
State and foreign taxes net of federal tax benefit		(1.0	)		(5.1	)
Uncertain tax positions		0.1			4.5
Repatriation of foreign earnings		-			3.3
Other, net		0.7			2.2
		(1.6	)%		11.8	%

Our $64.8 million federal income tax net operating loss carryover will expire beginning in 2029. While it is reasonably possible a current examination of state income tax returns for fiscal 1999 through fiscal 2003 involving uncertain tax positions could be resolved within the next twelve months through settlement or administrative proceedings, the potential impact cannot be estimated at this time. Otherwise, the majority of our state income tax returns are no longer subject to examination for years before 2007. U.S. federal income tax returns are no longer subject to examination for years before fiscal 2009 and Canadian income tax returns are no longer subject to examination for years before 2006.

The following presents information about our unrecognized tax benefits of uncertain tax positions (in thousands).

	2013			2012
Unrecognized tax benefits:
Beginning of year	$	1,477		$	1,530
Decreases in prior years' tax positions		(72	)		(53	)
End of year		1,405			1,477
Accrued interest and penalties		1,920			1,819
Uncertain tax positions liability	$	3,325		$	3,296
Unrecognized tax benefits affecting tax rate if recognized	$	927		$	975
Interest and penalty expense	$	101		$	200

During the first quarter of fiscal 2013, $161,000 of the liability previously recorded for uncertain state tax positions was released from the reserve as it no longer failed to meet the more likely than not threshold.