XML 102 R20.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2014
Income Tax Disclosure [Abstract] |
Income taxes | Income Taxes The components of income before income tax provision for the years ended June 30, 2014, 2013 and 2012 are as follows (in thousands):
| Years Ended June 30,
| 2014 |  | 2013 |  | 2012
United States | $ | 66,152 |  |  | $ | 14,102 |  |  | $ | 41,540 |
Foreign | 13,442 |  |  | 12,494 |  |  | 3,811 |
Income before income tax provision | $ | 79,594 |  |  | $ | 26,596 |  |  | $ | 45,351 |
The income tax provision for the years ended June 30, 2014, 2013 and 2012, consists of the following (in thousands):
| Years Ended June 30,
| 2014 |  | 2013 |  | 2012
Current: |  |  |  |  |
Federal | $ | 20,102 |  |  | $ | 7,904 |  |  | $ | 17,210 |
State | 624 |  |  | 684 |  |  | 817 |
Foreign | 5,252 |  |  | 3,806 |  |  | 1,206 |
| 25,978 |  |  | 12,394 |  |  | 19,233 |
Deferred: |  |  |  |  |
Federal | 122 |  |  | (5,984 | ) |  | (2,862 | )
State | (472 | ) |  | (1,093 | ) |  | (873 | )
Foreign | (191 | ) |  | — |  |  | — |
| (541 | ) |  | (7,077 | ) |  | (3,735 | )
Income tax provision | $ | 25,437 |  |  | $ | 5,317 |  |  | $ | 15,498 |
The Company’s net deferred tax assets as of June 30, 2014 and 2013, consist of the following (in thousands):
| June 30,
| 2014 |  | 2013
Warranty accrual | $ | 2,459 |  |  | $ | 2,204 |
Marketing fund accrual | 938 |  |  | 795 |
Inventory valuation | 9,472 |  |  | 10,313 |
Stock-based compensation | 4,114 |  |  | 3,889 |
Research and development credit | 1,938 |  |  | 1,906 |
Other | 4,719 |  |  | 4,216 |
Total deferred income tax assets | 23,640 |  |  | 23,323 |
Deferred tax liabilities-depreciation and other | (644 | ) |  | (262 | )
Deferred income tax assets-net | $ | 22,996 |  |  | $ | 23,061 |
The cumulative undistributed earnings of our foreign subsidiaries of $22,737,000 at June 30, 2014 are considered to be indefinitely reinvested and accordingly, no provisions for federal and state income taxes have been provided thereon. The Company determined that the calculation of the amount of unrecognized deferred tax liability related to these cumulative unremitted earnings was not practicable. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. Income tax benefits resulting from stock option transactions of $7,041,000, $1,734,000 and $3,421,000 were credited to stockholders’ equity in the years ended June 30, 2014, 2013 and 2012, respectively. The following is a reconciliation for the years ended June 30, 2014, 2013 and 2012, of the statutory rate to the Company’s effective federal tax rate:
|  | Years Ended June 30,
|  | 2014 |  | 2013 |  | 2012
Tax at statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income tax, net of federal tax benefit |  | 3.3 |  |  | 3.8 |  |  | 2.5 |
Foreign tax rate differences |  | (2.5 | ) |  | (6.7 | ) |  | (1.0 | )
Research and development tax credit |  | (4.0 | ) |  | (14.4 | ) |  | (5.7 | )
Qualified production activity deduction |  | (1.8 | ) |  | (2.9 | ) |  | (2.4 | )
Stock based compensation |  | 4.5 |  |  | 13.5 |  |  | 6.2 |
Uncertain tax positions |  | (2.1 | ) |  | (11.0 | ) |  | (0.5 | )
Subpart F income inclusion |  | (3.9 | ) |  | (3.8 | ) |  | (0.6 | )
Foreign withholding tax |  | 4.1 |  |  | 5.5 |  |  | 2.0 |
Federal tax return to provision adjustment |  | (0.7 | ) |  | (3.9 | ) |  | (0.2 | )
Other |  | 0.1 |  |  | 4.9 |  |  | (1.1 | )
Effective tax rate |  | 32.0 | % |  | 20.0 | % |  | 34.2 | %
As of June 30, 2014, the Company had state research and development tax credit carryforwards of $7,738,000. The state research and development tax credits will carryforward to offset future state income taxes. $4,755,000 of the state research and development tax credit carryforwards were attributable to excess tax deductions from stock options exercises, and were not included in the deferred tax assets shown above. The benefit of these carryforwards will be credited to equity when realized. In January 2013, the American Taxpayer Relief Act of 2012 reinstated the U.S. federal R&D tax credit for two years to December 31, 2013, retroactive to January 1, 2012. As a result, during fiscal year 2013, the Company recognized a total tax benefit of $3,708,000, of which $1,455,000 related to fiscal year 2012. The following table summarizes the activity related to the unrecognized tax benefits (in thousands):
| Gross* Unrecognized Income Tax Benefits
Balance at June 30, 2011 | $ | 6,549 |
Gross increases: |
For current year’s tax positions | 1,302 |
For prior years’ tax positions | 501 |
Gross decreases: |
Settlements and releases due to the lapse of statutes of limitations | (225 | )
For prior year' tax positions | (102 | )
Balance at June 30, 2012 | 8,025 |
Gross increases: |
For current year’s tax positions | 2,044 |
For prior years’ tax positions | 490 |
Gross decreases: |
Settlements and releases due to the lapse of statutes of limitations | (2,470 | )
For prior years’ tax positions | — |
Balance at June 30, 2013 | 8,089 |
Gross increases: |
For current year’s tax positions | 3,120 |
For prior years’ tax positions | 132 |
Gross decreases: |
Settlements and releases due to the lapse of statutes of limitations | (1,726 | )
For prior years’ tax positions | — |
Balance at June 30, 2014 | $ | 9,615 |
__________________________
* | excludes interest, penalties, federal benefit of state reserves
In March 2014, the California Franchise Tax Board and the Company agreed to all outstanding items related to the audit of the Company's California income tax returns for the fiscal years ended June 30, 2008 through June 30, 2010. As a result of the resolution, the Company recognized a net benefit to the provision for income taxes of $1,089,000, which included a reduction in interest expense of $46,000. In March 2013, the Internal Revenue Service and the Company agreed to all outstanding items related to the audit of the Company's federal income tax returns for the fiscal years ended June 30, 2008 through June 30, 2010. As a result of the resolution, the Company recognized a net benefit to the provision for income taxes of $2,017,000, which included a reduction in interest expense of $266,000. The total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, is $8,168,000 and $6,499,000 as of June 30, 2014 and 2013, respectively. In fiscal year 2014, the liability for gross unrecognized tax benefit was reduced by $1,726,000 primarily due to the audit settlement with California Franchise Tax Board and foreign tax authority. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes on the consolidated statements of operations. As of June 30, 2014 and 2013, the Company had accrued $818,000 and $797,000 for the payment of interest and penalties relating to unrecognized tax benefits, respectively. During fiscal year 2014, 2013 and 2012, there was no material change in the total amount of the liability for accrued interest and penalties related to the unrecognized tax benefits. The Company is subject to U.S. federal income tax as well as income taxes in many state and foreign jurisdictions. The federal statute of limitations remain open in general for tax years 2011 through 2014. The state statute of limitations remain open in general for tax years 2009 through 2014. The statute of limitations in major foreign jurisdictions remain open for examination in general for tax years 2007 through 2014. The Company does not expect its unrecognized tax benefits to change materially over the next 12 months.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration