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Income Taxes (Notes) | 12 Months Ended
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Jun. 30, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income (loss) before income taxes is as follows (in thousands):
| Year Ended
| June 30, 2012 |  | July 3, 2011 |  | June 27, 2010
Domestic | $ | 20,839 |  |  | $ | 4,416 |  |  | $ | (10,024 | )
Foreign | (3,771 | ) |  | (704 | ) |  | 9,841 |
Total | $ | 17,068 |  |  | $ | 3,712 |  |  | $ | (183 | )
The provision for (benefit from) income taxes for fiscal 2012, 2011 and fiscal 2010 consisted of the following (in thousands):
| Year Ended
| June 30, 2012 |  | July 3, 2011 |  | June 27, 2010
Current: |  |  |  |  |
Federal | $ | 114 |  |  | $ | 142 |  |  | $ | (1,062 | )
State | 79 |  |  | 92 |  |  | 106 |
Foreign | 916 |  |  | 1,613 |  |  | 596 |
Total current | 1,109 |  |  | 1,847 |  |  | (360 | )
Deferred: |  |  |  |  |
Federal | 30 |  |  | (639 | ) |  | — |
State | — |  |  | — |  |  | — |
Foreign | 57 |  |  | (209 | ) |  | (50 | )
Total deferred | 87 |  |  | (848 | ) |  | (50 | )
Provision (benefit) for income taxes | $ | 1,196 |  |  | $ | 999 |  |  | $ | (410 | )
The difference between the provision for income taxes and the amount computed by applying the federal statutory income tax rate (35 percent) to income (loss) before taxes is explained below (in thousands):
| Year Ended
| June 30, 2012 |  | July 3, 2011 |  | June 27, 2010
Tax at federal statutory rate (benefit) | $ | 5,974 |  |  | $ | 1,299 |  |  | $ | (64 | )
State income tax, net of federal benefit | 51 |  |  | 57 |  |  | 66 |
Valuation allowance | (8,035 | ) |  | (2,492 | ) |  | 607 |
Foreign earnings taxed at other than U.S. rates | 3,607 |  |  | 1,576 |  |  | (3,348 | )
Deferred compensation | 170 |  |  | 398 |  |  | 2,196 |
Other | (571 | ) |  | 161 |  |  | 133 |
Provision for income taxes | $ | 1,196 |  |  | $ | 999 |  |  | $ | (410 | )
Significant components of the Company’s deferred tax assets are as follows (in thousands):
| June 30, 2012 |  | July 3, 2011
Deferred tax assets: |  |  |
Net operating loss carry-forwards | $ | 73,413 |  |  | $ | 76,158 |
Tax credit carry-forwards | 23,051 |  |  | 23,335 |
Depreciation | 14,074 |  |  | 16,602 |
Deferred revenue (net) | 8,722 |  |  | 9,160 |
Warrant amortization | 5,489 |  |  | 6,854 |
Inventory write-downs | 2,803 |  |  | 3,685 |
Other allowances and accruals | 2,901 |  |  | 3,579 |
Other | 10,895 |  |  | 11,912 |
Total deferred tax assets | 141,348 |  |  | 151,285 |
Valuation allowance | (140,641 | ) |  | (150,503 | )
Total net deferred tax assets | 707 |  |  | 782 |
Deferred tax liabilities: |  |  |
Deferred tax liability on foreign withholdings | (120 | ) |  | (93 | )
Total deferred tax liabilities | (120 | ) |  | (93 | )
Net deferred tax assets | $ | 587 |  |  | $ | 689 |
Recorded as: |  |  |
Net current deferred tax assets | $ | 644 |  |  | $ | 681 |
Net non-current deferred tax assets | 178 |  |  | 101 |
Net current deferred tax liabilities | (235 | ) |  | — |
Net non-current deferred tax liabilities | — |  |  | (93 | )
Net deferred tax assets (liabilities) | $ | 587 |  |  | $ | 689 |
The Company's valuation allowance decreased by $9.9 million in fiscal 2012, decreased by $4.6 million in fiscal 2011, and increased by $11.5 million in fiscal 2010. The Company has provided a full valuation allowance against all of its U.S. federal and state deferred tax assets, and no valuation allowance against any of its non-U.S. deferred tax assets. The valuation allowance is determined by assessing both negative and positive evidence to determine whether it is more likely than not that the deferred tax assets are recoverable; such assessment is required on a jurisdiction by jurisdiction basis. The Company's U.S. losses in recent periods we believe represent sufficient negative evidence to require a full valuation allowance against its U.S. federal and state net deferred tax assets. This valuation allowance will be evaluated periodically and can be reversed partially or totally if business results and the economic environment have sufficiently improved to support realization of the Company's deferred tax assets. As of June 30, 2012, the Company had net operating loss carry-forwards for federal and state tax purposes of $254.8 million and $90.0 million, respectively, of which $53.7 million and $32.3 million, respectively, represent deductions from share-based compensation for which a benefit would be recorded in additional paid-in capital when realized. The Company also had federal and state tax credit carry-forwards of $10.9 million and $18.7 million, respectively, as of June 30, 2012. Federal net operating loss carry-forwards of $254.8 million will expire between 2020 through 2030 and state net operating losses of $90.0 million will expire between 2013 through 2031, if not utilized. Federal tax credits of $10.9 million will expire beginning in 2020, if not utilized and state tax credits of $0.8 million will expire beginning in 2013, if not utilized. The additional state tax credits of $18.0 million will carry forward indefinitely. As of June 30, 2012, the Company conducted an Internal Revenue Code Section 382 (“Sec. 382”) analysis with respect to its net operating loss and credit carry-forwards and determined that there was no limitation. It is possible that subsequent ownership changes may limit the utilization of these tax attributes. As of June 30, 2012, the Company intends to indefinitely reinvest the earnings of certain foreign corporations. If such earnings were distributed, the Company would accrue an additional income tax expense of approximately $1.0 million. As of June 30, 2012, the Company had $25.7 million of unrecognized tax benefits. If fully recognized in the future, $0.5 million would impact the effective tax rate, and $25.2 million would result in adjustments to deferred tax assets and corresponding adjustments to the valuation allowance. It is reasonably possible that the amount of unrealized tax benefit could decrease by approximately $0.2 million during the next twelve months due to the expiration of the statute of limitations in certain foreign jurisdictions. A reconciliation of the beginning and ending amount of total unrecognized tax benefits is as follows (in thousands):
Balance at June 28, 2009 | $ | 22,578 |
Decrease related to prior year tax positions | (98 | )
Increases related to prior year tax positions | 1,094 |
Increases related to current year tax positions | 1,414 |
Lapse of statute of limitations | (1,078 | )
Balance at June 27, 2010 | $ | 23,910 |
Increase related to prior year tax positions | 464 |
Increase related to current year tax positions | 1,636 |
Balance at July 3, 2011 | $ | 26,010 |
Decrease related to prior year tax positions | (444 | )
Increase related to current year tax positions | 729 |
Lapse of statute of limitations | (549 | )
Balance at June 30, 2012 | $ | 25,746 |
Estimated interest and penalties related to the underpayment of income taxes are classified as a component of tax expense in the Consolidated Statement of Operations and totaled approximately $28,000, $30,000, and $72,000 for the years ended June 30, 2012, July 3, 2011, and June 27, 2010, respectively. Accrued interest and penalties were approximately $77,000 and $222,000 as of June 30, 2012 and July 3, 2011, respectively. In general, the Company's U.S. federal income tax returns are subject to examination by tax authorities for fiscal years 1999 forward due to net operating losses and the Company's state income tax returns are subject to examination for fiscal years 2001 forward due to net operating losses.

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- 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 Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 7: 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 8: 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
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