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Income Taxes (Tables)

12 Months Ended

Jun. 29, 2014

Income Tax Disclosure [Abstract]

Components of Income Before Income Taxes

The following were the components of income before income taxes (in thousands):

	Fiscal Years Ended
	June 29, 2014				June 30, 2013				June 24, 2012
Domestic		$58,859				$31,046				($5,360	)
Foreign	88,711				76,511				53,007
Total income before income taxes		$147,570				$107,557				$47,647

Components of Income Tax Expense

The following were the components of income tax expense (in thousands):

	Fiscal Years Ended
	June 29, 2014				June 30, 2013				June 24, 2012
Current:
Federal		$3,423				$483				($4,031	)
Foreign	15,371				18,127				13,125
State	1,876				1,777				566
Total current	20,670				20,387				9,660
Deferred:
Federal	229				2,226				(4,786		)
Foreign	3,003				(177		)		(450		)
State	(523		)		(1,804		)		(1,189		)
Total deferred	2,709				245				(6,425		)
Income tax expense		$23,379				$20,632				$3,235

Schedule of Effective Income Tax Rate and Amount Reconciliation

Actual income tax expense differed from the amount computed by applying the U.S. federal tax rate of 35% to pre-tax earnings as a result of the following (in thousands, except percentages):

	Fiscal Years Ended
	June 29, 2014				% of Income		June 30, 2013				% of Income		June 24, 2012				% of Income
Federal income tax provision at statutory rate		$51,645			35%			$37,645			35%			$16,676			35%
Increase (decrease) in income tax expense resulting from:
State tax provision, net of federal benefit	2,550				2%		1,146				1%		68				0%
State tax credits	(1,004		)		(1)%		(1,407		)		(1)%		(1,028		)		(2)%
Tax exempt interest	(815		)		0%		(853		)		(1)%		(1,064		)		(2)%
48C investment tax credit	(11,310		)		(8)%		(5,252		)		(5)%		(4,105		)		(9)%
Increase (decrease) in tax reserve	15,411				10%		(361		)		0%		(2,677		)		(6)%
Change in tax depreciation methodology	(18,475		)		(12)%		—				0%		—				0%
Research and development credits	(1,574		)		(1)%		(2,426		)		(2)%		(694		)		(1)%
Decrease in valuation allowance	(20		)		0%		(6		)		0%		(13		)		0%
Qualified production activities deduction	(2,362		)		(1)%		(866		)		(1)%		(177		)		(1)%
Stock-based compensation	2,024				1%		1,206				1%		336				1%
Statutory rate differences	(14,285		)		(10)%		(10,184		)		(10)%		(5,830		)		(12)%
Other	1,594				1%		1,990				2%		1,743				4%
Income tax expense		$23,379			16%			$20,632			19%			$3,235			7%

Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows (in thousands):

	June 29, 2014				June 30, 2013
Deferred tax assets:
Compensation		$4,843				$3,868
Inventories	18,672				16,050
Sales return reserve and allowance for bad debts	4,801				4,483
Warranty reserve	1,416				947
Federal and state net operating loss carryforwards	704				617
Federal credits	4,971				3,174
State credits	3,016				4,215
48C investment tax credits	22,731				7,216
Investments	958				976
Stock-based compensation	31,102				27,142
Deferred revenue	5,719				—
Other	876				1,209
Total gross deferred assets	99,809				69,897
Less valuation allowance	(1,571		)		(1,604		)
Deferred tax assets, net	98,238				68,293
Deferred tax liabilities:
Property and equipment	(25,660		)		(27,484		)
Intangible assets	(52,462		)		(37,921		)
Investments	(1,792		)		154
Prepaid taxes and other	(1,083		)		(997		)
Total gross deferred liability	(80,997		)		(66,248		)
Deferred tax asset, net		$17,241				$2,045

Components Giving Rise to Net Deferred Tax Assets (Liabilities) Included in Accompanying Consolidated Balance Sheet

The components giving rise to the net deferred tax assets (liabilities) have been included in the Consolidated Balance Sheets as follows (in thousands):

	Balance at June 29, 2014
	Assets								Liabilities
	Current				Noncurrent				Current				Noncurrent
U.S. federal income taxes		$17,324				$—				$—				($10,948	)
Hong Kong and other income taxes	12,090				—				—				(1,225		)
Total net deferred tax assets/(liabilities)		$29,414				$—				$—				($12,173	)

	Balance at June 30, 2013
	Assets								Liabilities
	Current				Noncurrent				Current				Noncurrent
U.S. federal income taxes		$15,707				$—				$—				($25,504	)
Hong Kong and other income taxes	10,418				1,424		*		—				—
Total net deferred tax assets/(liabilities)		$26,125				$1,424				$—				($25,504	)

* This amount is included in Other assets in the Consolidated Balance Sheets.

Reconciliation of the Change in Uncertain Tax Positions

The following is a tabular reconciliation of the Company’s change in uncertain tax positions (in thousands):

	Fiscal Years Ended
	June 29, 2014				June 30, 2013				June 24, 2012
Balance at beginning of period		$2,732				$4,421				$6,987
Increases related to prior year tax positions	18,040				546				—
Decreases related to prior year tax positions	(741		)		—				(1,966		)
Expiration of statute of limitations for assessment of taxes	(1,642		)		(2,235		)		(600		)
Balance at end of period		$18,389				$2,732				$4,421

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Income tax expense line item in the Consolidated Statements of Income. Total interest and penalties accrued were as follows (in thousands):

	June 29, 2014				June 30, 2013
Accrued interest and penalties		$104				$154

Total interest and penalties recognized were as follows (in thousands):

	Fiscal Years Ended
	June 29, 2014				June 30, 2013				June 24, 2012
Recognized interest and penalties (benefit)		($51	)			($130	)			($292	)

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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