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Income Taxes
 12 Months Ended
Jun. 28, 2012
Income Taxes [Abstract]  
INCOME TAXES

NOTE 7 — INCOME TAXES

The provision (benefit) for income taxes for the years ended June 28, 2012, June 30, 2011 and June 24, 2010 are as follows:

 

                         
    June 28, 2012     June 30, 2011     June 24, 2010  

Current

   $ 9,908     $ 2,972     $ 7,890  

Deferred

     (809 )      (3,021 )      557  
   

 

 

    

 

 

    

 

 

  

Total income tax expense (benefit)

   $ 9,099     $ (49 )    $ 8,447  
   

 

 

    

 

 

    

 

 

  

The reconciliations of income taxes at the statutory federal income tax rate to income taxes reported in the consolidated statements of comprehensive income for the years ended June 28, 2012, June 30, 2011 and June 24, 2010 are as follows:

 

                         
    June 28,
2012		     June 30,
2011		     June 24,
2010		  

Federal statutory income tax rate

     35.0  %      35.0  %      35.0  % 

State income taxes, net of federal benefit

     3.5       (18.9 )      4.2  

Research and development tax credit

     (0.2 )      (5.7 )      —    

Domestic manufacturing deduction

     (3.2 )      (10.7 )      (2.0 ) 

Other

     (0.4 )      (1.5 )      (0.3 ) 
   

 

 

    

 

 

    

 

 

  

Effective tax rate

     34.7 %      (1.8 )%      36.9 % 
   

 

 

    

 

 

    

 

 

  

 

The impact of the rate reconciling items for fiscal 2011 is greater than fiscal 2012 and 2010 primarily because income before income taxes is lower in fiscal year 2011. The significant items (on after-tax basis) impacting the fiscal 2011 rate include the following: (i) $190 of state tax benefit related to release of state valuation allowance due to change in state law and our expected utilization of state investment tax credits, $138 of state tax benefit related to out of period adjustment for excess state tax over book depreciation available in future periods, $74 of state tax benefit due to favorable resolution of state tax audit, $124 of state tax benefit for tax rate changes and tax provision adjustments; (ii) $160 of tax benefit related to the current year research and development credit and the reinstatement of the prior year research and development credit; (iii) $297 of tax benefit related to the Domestic Producers Deduction which increased to 9% in fiscal 2011; and (iv) $41 of net tax benefit primarily related to a lower federal income tax bracket of 34% due to a lower level of current year federal taxable income as well as other miscellaneous permanent adjustments.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement basis and the tax basis of assets and liabilities using enacted statutory tax rates applicable to future years. Deferred tax assets and liabilities are comprised of the following:

 

                                 
    June 28, 2012     June 30, 2011  
    Asset     Liability     Asset     Liability  

Current

                                

Accounts receivable

   $ 298     $ —       $ 278     $ —    

Employee compensation

     1,785       —         1,264       —    

Inventory

     466       —         430       —    

Workers’ compensation

     1,701       —         1,579       —    

Other

     573       —         1,331       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total current

   $ 4,823     $ —       $ 4,882     $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Long term

                                

Depreciation

   $ —       $ (11,801 )    $ —       $ (11,864 ) 

Amortization

     —         (145 )      78       —    

Capitalized leases

     959       —         757       —    

Goodwill and intangible assets

     4,123       —         3,587       —    

Operating loss carry-forwards

     641       —         668       —    

Retirement plan

     5,334       —         4,227       —    

Valuation allowance

     —         —         (68 )      —    

Other

     429       —         565       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total long-term

   $ 11,486     $ (11,946 )    $ 9,814     $ (11,864 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 16,309     $ (11,946 )    $ 14,696     $ (11,864 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

The net change in the total valuation allowance was a decrease of $68 in 2012 and an increase of $68 in 2011. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

We have gross state tax net operating losses of approximately $11,600 that will expire between 2017 and 2030 if not utilized.

 

We have gross state tax credits of $155 which expire as follows:

 

         

Fiscal Year Ending

      

June 27, 2013

   $ 32  

June 26, 2014

     10  

June 25, 2015

     41  

June 30, 2016

     37  

June 29, 2017

     35  

For the years ending June 28, 2012 and June 30, 2011 unrecognized tax benefits and accrued interest and penalties were not material. There were no material changes to the amount of unrecognized tax benefits or interest and penalties during fiscal 2012, fiscal 2011 or fiscal 2010. Total gross amounts of unrecognized tax benefits were $133 and $70 at June 28, 2012 and June 30, 2011, respectively. At June 28, 2012, June 30, 2011 and June 24, 2010 there were $113, $65, and $86 respectively, of unrecognized tax benefits that if recognized would affect the annual effective tax rate on income from continuing operations.

We do not anticipate that total unrecognized tax benefits will significantly change in the next twelve months.

There were certain changes in state tax laws during the period the impact of which was insignificant. We file income tax returns with federal and state tax authorities within the United States of America. Our federal and Illinois returns are open for audit for fiscal 2008 and later. Our California tax returns are open for audit for fiscal 2007 and later. No other tax jurisdictions are material to us.