Income Taxes (Tables)

12 Months Ended

Jul. 02, 2017

The provision for income taxes consisted of the following (thousands of dollars):

	Years Ended
	July 2, 2017		July 3, 2016		June 28, 2015

Currently payable:
Federal	$	228	$	18	$	9,891
State		3		130		657
Foreign		2,202		1,893		2,164
		2,433		2,041		12,712
Deferred tax provision (benefit)		1,851		3,027		(3,330	)
	$	4,284	$	5,068	$	9,382

Difference Between Income Taxes Computed at the Federal Statutory Tax Rate and the Provision for Income Taxes

The items accounting for the difference between income taxes computed at the Federal statutory tax rate and the provision for income taxes were as follows:

	Years Ended
	July 2, 2017			July 3, 2016			June 28, 2015
U.S. statutory rate		35.0	%		34.0	%		34.7	%
State taxes, net of Federal tax benefit		1.2			1.3			0.7
Foreign subsidiaries		(1.1	)		0.6			(1.3	)
U.S. taxation on non-U.S. earnings		3.8			—			—
Research and development tax credit		(2.7	)		—			—
Non-controlling interest		(9.9	)		(9.3	)		(4.1	)
Other		(0.2	)		(0.2	)		(2.4	)
		26.1	%		26.4	%		27.6	%

Components of Deferred Tax Assets

The components of deferred tax assets were as follows (thousands of dollars):

	July 2, 2017			July 3, 2016
Unrecognized pension and postretirement benefit plan liabilities	$	11,191		$	14,579
Accrued warranty		925			1,376
Payroll-related accruals		2,605			2,108
Stock-based compensation		1,488			1,258
Inventory reserve		1,249			873
Environmental reserve		484			505
Repair and maintenance supply parts reserve		333			259
Allowance for doubtful accounts		185			185
NOL/credit carry-forwards		1,669			145
Postretirement obligations		(405	)		(227	)
Accumulated depreciation		(6,034	)		(6,135	)
Accrued pension obligations		(14,483	)		(13,197	)
Joint Ventures		808			1,706
Other		241			1,952
	$	256		$	5,387

Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended July 2, 2017 and July 3, 2016 (thousands of dollars):

	Years Ended
	July 2, 2017			July 3, 2016
Unrecognized tax benefits, beginning of year	$	441		$	437
Gross increases – tax positions in prior years		28			—
Gross decreases – tax positions in prior years		—			(3	)
Gross increases – current period tax positions		177			71
Tax years closed		(75	)		(64	)
Unrecognized tax benefits, end of year	$	571		$	441