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INCOME TAXES | 12 Months Ended
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Jun. 26, 2014
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 6 — INCOME TAXES The provision for income taxes for the last three fiscal years is as follows:
|  | For the Year Ended: |
|  | June 26, 2014 |  |  | June 27, 2013 |  |  | June 28, 2012 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 11,274 |  |  | $ | 12,405 |  |  | $ | 8,420 |
State |  |  | 1,704 |  |  |  | 2,078 |  |  |  | 1,488 |
Total current |  |  | 12,978 |  |  |  | 14,483 |  |  |  | 9,908 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Deferred federal |  |  | 375 |  |  |  | (1,205 | ) |  |  | (750 | )
Deferred state |  |  | 192 |  |  |  | 258 |  |  |  | (59 | )
Total deferred |  |  | 567 |  |  |  | (947 | ) |  |  | (809 | )
Total income tax expense |  | $ | 13,545 |  |  | $ | 13,536 |  |  | $ | 9,099 |
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 last three fiscal years are as follows:
|  | June 26, 2014 |  |  | June 27, 2013 |  |  | June 28, 2012 |
Federal statutory income tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal benefit |  |  | 3.3 |  |  |  | 4.5 |  |  |  | 3.5 |
Research and development tax credit |  |  | (0.1 | ) |  |  | (0.2 | ) |  |  | (0.2 | )
Domestic manufacturing deduction |  |  | (2.7 | ) |  |  | (3.4 | ) |  |  | (3.2 | )
Change in valuation allowance |  |  | (1.4 | ) |  |  | 2.0 |  |  |  | — |
Other |  |  | (0.1 | ) |  |  | 0.4 |  |  |  | (0.4 | )
Effective tax rate |  |  | 34.0 | % |  |  | 38.3 | % |  |  | 34.7 | %
The increase in the effective tax rate of fiscal 2013 is primarily due to the impact of an $815 valuation allowance recorded against deferred tax assets that were created as a result of our equity investment in, and sale of intellectual property rights to an unconsolidated variable interest entity. During fiscal 2014 we divested our investment in, and cancelled a secured promissory note due from this entity. The tax benefit of these losses was $640 and consequently reduced the fiscal 2014 effective tax rate. 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 26, 2014 |  |  | June 27, 2013 |
Current tax assets: |  |  |  |  |  |  |  |
Accounts receivable |  | $ | 343 |  |  | $ | 298 |
Employee compensation |  |  | 1,785 |  |  |  | 2,021 |
Inventory |  |  | 424 |  |  |  | 376 |
Workers’ compensation |  |  | 673 |  |  |  | 597 |
Other |  |  | 296 |  |  |  | 620 |
Less valuation allowance |  |  | (37 | ) |  |  | (189 | )
Net deferred tax asset - current |  | $ | 3,484 |  |  | $ | 3,723 |
Non-current tax assets (liabilities): |  |  |  |  |  |  |  |
Depreciation |  | $ | (13,384 | ) |  | $ | (11,525 | )
Amortization |  |  | (80 | ) |  |  | (278 | )
Capitalized leases |  |  | 1,249 |  |  |  | 1,099 |
Goodwill and intangible assets |  |  | 5,081 |  |  |  | 4,690 |
Operating loss carryforwards |  |  | 205 |  |  |  | 264 |
Retirement plan |  |  | 5,749 |  |  |  | 5,046 |
Workers’ compensation |  |  | 1,347 |  |  |  | 1,194 |
Capital loss carryforward |  |  | 175 |  |  |  | — |
Equity method investment |  |  | — |  |  |  | 615 |
Other |  |  | 522 |  |  |  | 348 |
Less valuation allowance |  |  | (138 | ) |  |  | (626 | )
Net deferred tax asset – long term |  |  | 726 |  |  |  | 827 |
Net deferred tax assets - total |  | $ | 4,210 |  |  | $ | 4,550 |
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 of the character necessary 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. The net change in the total valuation allowance was a decrease of $640 in fiscal 2014 and an increase of $815 in fiscal 2013. If or when recognized, the tax benefits relating to any reversal of the valuation allowance will be recognized as a reduction of income tax expense. We have gross state tax net operating losses of approximately $3,649 that will expire in 2024 if not utilized. We have an immaterial amount of gross state tax credits. For the years ending June 26, 2014 and June 27, 2013, unrecognized tax benefits and accrued interest and penalties were $263 and $131. Accrued interest and penalties related to uncertain tax positions are not material for any periods presented. Interest and penalties were not material for any period presented. The total gross amounts of unrecognized tax benefits were $247 and $139 at June 26, 2014 and June 27, 2013, respectively. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
|  | June 26, 2014 |  |  | June 27, 2013 |
Beginning balance |  | $ | 139 |  |  | $ | 133 |
Gross increases — tax positions in prior year |  |  | 248 |  |  |  | 5 |
Gross decreases — tax positions in prior year |  |  | (107 | ) |  |  | (12 | )
Settlements |  |  | — |  |  |  | — |
Gross increases — tax positions in current year |  |  | 7 |  |  |  | 23 |
Lapse of statute of limitations |  |  | (40 | ) |  |  | (10 | )
Ending balance |  | $ | 247 |  |  | $ | 139 |
Unrecognized tax benefits, that if recognized, would affect the annual effective tax rate on income from continuing operations, are as follows:
|  | June 26, 2014 |  |  | June 27, 2013 |  |  | June 28, 2012 |
Unrecognized tax benefits that would affect annual effective tax rate |  | $ | 233 |  |  | $ | 127 |  |  | $ | 113 |
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 tax returns are open for audit for fiscal 2011 and later. Our Illinois tax returns are currently under audit for fiscal 2011 and 2012. Our Illinois tax return is open for audit for fiscal 2013. Our California tax returns are open for audit for fiscal 2009 and later. No other tax jurisdictions are material to us.

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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 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
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