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Note 14 - Income Taxes | 12 Months Ended
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Jun. 28, 2015
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | 14. Income Taxes Components of income before income taxes The components of income before income taxes consist of the following:
|  | For the Fiscal Years Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 30, 2013 |
United States |  | $ | 38,341 |  |  | $ | 38,816 |  |  | $ | 16,900 |
Foreign |  |  | 15,471 |  |  |  | 9,065 |  |  |  | 12,114 |
Income before income taxes |  | $ | 53,812 |  |  | $ | 47,881 |  |  | $ | 29,014 |
Components of provision for income taxes The components of provision for income taxes consist of the following:
|  | For the Fiscal Years Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 30, 2013 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 7,985 |  |  | $ | 14,463 |  |  | $ | 2,399 |
State |  |  | 1,231 |  |  |  | 1,035 |  |  |  | 119 |
Foreign |  |  | 7,926 |  |  |  | 4,092 |  |  |  | 5,210 |
|  |  | 17,142 |  |  |  | 19,590 |  |  |  | 7,728 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (4,006 | ) |  |  | 183 |  |  |  | 7,086 |
State |  |  | (112 | ) |  |  | 900 |  |  |  | 542 |
Foreign |  |  | 322 |  |  |  | (512 | ) |  |  | (2,012 | )
|  |  | (3,796 | ) |  |  | 571 |  |  |  | 5,616 |
Provision for income taxes |  | $ | 13,346 |  |  | $ | 20,161 |  |  | $ | 13,344 |
Utilization of Net Operating Loss Carryforwards State deferred tax expense includes the utilization of net operating loss (“NOL”) carryforwards of $196, $499 and $825 for fiscal years 2015, 2014 and 2013, respectively. Foreign deferred tax expense includes the utilization of NOL carryforwards of $147, $216 and $258 for fiscal years 2015, 2014 and 2013, respectively. Federal deferred tax expense includes the utilization of NOL carryforwards of $7,904 for fiscal year 2013. Effective income tax rate The provision for income taxes as reconciled from the federal statutory tax rate to the effective tax rate is as follows:
|  | For the Fiscal Years Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 30, 2013 |
Federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal tax benefit |  |  | 1.8 |  |  |  | 2.8 |  |  |  | 2.1 |
Foreign income taxed at different rates |  |  | (3.2 | ) |  |  | (1.2 | ) |  |  | (0.5 | )
Settlement of certain intercompany foreign currency transactions |  |  | 5.6 |  |  |  | — |  |  |  | — |
Repatriation of foreign earnings and withholding taxes |  |  | (0.3 | ) |  |  | 0.4 |  |  |  | 1.1 |
Indefinite reinvestment assertion |  |  | (14.2 | ) |  |  | 0.5 |  |  |  | 1.0 |
Change in valuation allowance |  |  | (5.6 | ) |  |  | 4.0 |  |  |  | 11.2 |
Domestic production activities deduction |  |  | (1.3 | ) |  |  | (2.3 | ) |  |  | (1.2 | )
Change in uncertain tax positions |  |  | 5.4 |  |  |  | (0.5 | ) |  |  | (1.4 | )
Renewable energy credits |  |  | (1.9 | ) |  |  | — |  |  |  | — |
Research and other credits |  |  | (0.4 | ) |  |  | (0.3 | ) |  |  | (3.5 | )
Nondeductible expenses and other |  |  | 3.9 |  |  |  | 3.7 |  |  |  | 2.2 |
Effective tax rate |  |  | 24.8 | % |  |  | 42.1 | % |  |  | 46.0 | %
The effective income tax rate for fiscal year 2015 was primarily impacted by, among other things (i) a decrease in the valuation allowance reflecting the recognition of lower taxable income versus book income for the Company’s investment in Parkdale America, LLC (for which the Company maintains a full valuation allowance), which was partially offset by an increase in the valuation allowance for net operating losses, including Renewables, for which no tax benefit could be recognized; (ii) the change in the Company’s indefinite reinvestment assertion, which provides for foreign earnings permanently reinvested at June 28, 2015; (iii) a lower overall effective tax rate for the Company’s foreign earnings (reflecting free-trade zone sales in El Salvador and lower statutory tax rates in both Brazil and China); (iv) net federal and state credits, including renewable energy credits; and (v) the domestic production activities deduction. These items were partially offset by (i) taxes associated with settlement of certain intercompany foreign currency transactions in Brazil; (ii) a change in uncertain tax positions related to certain intercompany foreign currency transactions in Brazil; and (iii) state and local taxes net of the assumed federal benefit. The Company’s effective tax rate for fiscal years 2014 and 2013 was significantly impacted by, among other things, the increase in the valuation allowance primarily related to equity investments and state and local taxes net of the assumed federal benefit, partially offset by the domestic production activities deduction, research and development credits and other credits. Deferred income taxes The significant components of the Company’s deferred tax assets and liabilities consist of the following:
|  | June 28, 2015 |  |  | June 29, 2014 |
Deferred tax assets: |  |  |  |  |  |  |  |
Investments, including unconsolidated affiliates |  | $ | 9,675 |  |  | $ | 13,682 |
State tax credits |  |  | 461 |  |  |  | 85 |
Accrued liabilities and valuation reserves |  |  | 2,620 |  |  |  | 4,187 |
Net operating loss carryforwards |  |  | 2,904 |  |  |  | 1,635 |
Intangible assets, net |  |  | 4,964 |  |  |  | 5,259 |
Foreign tax credits |  |  | 2,588 |  |  |  | 2,588 |
Incentive compensation plans |  |  | 3,515 |  |  |  | 2,896 |
Other items |  |  | 4,673 |  |  |  | 5,167 |
Total gross deferred tax assets |  |  | 31,400 |  |  |  | 35,499 |
Valuation allowance |  |  | (15,606 | ) |  |  | (18,615 | )
Net deferred tax assets |  |  | 15,794 |  |  |  | 16,884 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (11,432 | ) |  |  | (6,709 | )
Indefinite reinvestment assertion |  |  | — |  |  |  | (7,639 | )
Other |  |  | (530 | ) |  |  | (618 | )
Total deferred tax liabilities |  |  | (11,962 | ) |  |  | (14,966 | )
Net deferred tax asset |  | $ | 3,832 |  |  | $ | 1,918 |
Deferred income taxes - valuation allowance In assessing the realizability of deferred tax assets, the Company 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. The Company considers the scheduled reversal of taxable temporary differences, taxable income in carryback years, projected future taxable income and tax planning strategies in making this assessment. Since the Company operates in multiple jurisdictions, the assessment is made on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. The balances and activity for the Company’s deferred tax valuation allowance are as follows:
|  | For the Fiscal Years Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 30, 2013 |
Balance at beginning of the year |  | $ | (18,615 | ) |  | $ | (16,690 | ) |  | $ | (13,911 | )
Charged to provision for income taxes |  |  | 3,009 |  |  |  | (1,925 | ) |  |  | (3,243 | )
Charged to other accounts |  |  | — |  |  |  | — |  |  |  | 464 |
Balance at end of year |  | $ | (15,606 | ) |  | $ | (18,615 | ) |  | $ | (16,690 | )
Components of the Company’s deferred tax valuation allowance are as follows:
|  | For the Fiscal Years Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 30, 2013 |
Investment in a former domestic unconsolidated affiliate |  | $ | (6,503 | ) |  | $ | (6,493 | ) |  | $ | (6,649 | )
Equity-method investment in Parkdale America, LLC |  |  | (3,261 | ) |  |  | (7,286 | ) |  |  | (5,762 | )
Foreign tax credits |  |  | (1,680 | ) |  |  | (1,680 | ) |  |  | (1,680 | )
Book versus tax basis difference in Renewables |  |  | (1,359 | ) |  |  | (2,035 | ) |  |  | (1,846 | )
NOLs related to Renewables |  |  | (2,803 | ) |  |  | (1,121 | ) |  |  | (753 | )
Total deferred tax valuation allowance |  | $ | (15,606 | ) |  | $ | (18,615 | ) |  | $ | (16,690 | )
During fiscal year 2015, the Company’s valuation allowance decreased by $3,009. This decrease consists of $4,025 related to the Company’s investment in Parkdale America, LLC (“PAL”) due to the timing of PAL’s taxable income versus book income and the impact of two bargain purchase gains, as described in more detail in “Note 23. Investments in Unconsolidated Affiliates and Variable Interest Entities”. The decrease was partially offset by a net $1,006 increase related to the Company’s investment in Renewables and its related NOLs as a result of continued losses for Renewables and the disposal of certain biomass foundation and feedstock, as described in more detail in “Note 21. Other Operating Expense, Net”. During fiscal year 2014, the Company’s valuation allowance increased by $1,925. This increase relates to (i) the timing of taxable income versus book income for PAL and (ii) NOLs for Renewables which were deemed unrealizable. During fiscal year 2013, the Company’s valuation allowance increased by $2,779. This increase relates to the timing of taxable income versus book income for PAL, partially offset by a decrease of $649 related to NOL carryforwards for the Company’s Colombian subsidiary. Deferred tax expense was reduced by $424. Unrecognized tax benefits A reconciliation of beginning and ending gross amounts of unrecognized tax benefits is as follows:
|  | For the Fiscal Years Ended |
|  | June 28, 2015 |  |  | June 29, 2014 |  |  | June 30, 2013 |
Balance at beginning of the year |  | $ | 983 |  |  | $ | 964 |  |  | $ | 1,154 |
Gross increases related to current period tax positions |  |  | 3,469 |  |  |  | 78 |  |  |  | 250 |
Gross increases related to tax positions in prior periods |  |  | 18 |  |  |  | 68 |  |  |  | — |
Gross decreases related to settlements with tax authorities |  |  | (178 | ) |  |  | (2 | ) |  |  | — |
Gross decreases related to lapse of applicable statute of limitations |  |  | (263 | ) |  |  | (125 | ) |  |  | (440 | )
Balance at end of year |  | $ | 4,029 |  |  | $ | 983 |  |  | $ | 964 |
Unrecognized tax benefits would generate a favorable impact of $3,927 on the Company’s effective tax rate when recognized. The Company expects uncertain tax positions to decrease by $308 within the next twelve months due to statute expirations on certain positions. The reversal of interest and penalties recognized by the Company within the provision for income taxes were $(95), $(193) and $(250) for fiscal years 2015, 2014 and 2013, respectively. The Company has $23, $118 and $311 accrued for interest and/or penalties related to uncertain tax positions as of June 28, 2015, June 29, 2014 and June 30, 2013, respectively. Expiration of net operating loss carryforwards and foreign tax credits As of June 28, 2015, the Company has $3,972 of state net operating loss carryforwards, for which no valuation allowance is established, that may be used to offset future taxable income. In addition, the Company has $2,588 of foreign tax credit carryforwards of which $1,680 are offset by a valuation allowance. These carryforwards, if unused, will expire as follows:
State net operating loss carryforwards | 2016 through 2033
Foreign tax credit carryforwards | 2021
Tax years subject to examination The Company and its domestic subsidiaries file a consolidated federal income tax return, as well as income tax returns in multiple state and foreign jurisdictions. The tax years subject to examination vary by jurisdiction. The Company regularly assesses the outcomes of both completed and ongoing examinations to ensure that the Company’s provision for income taxes is sufficient. The Company remains subject to income tax examinations for U.S. federal income taxes for tax years 2011 through 2014, for foreign income taxes for tax years 2008 through 2014, and for state and local income taxes for tax years 2009 through 2014. The U.S. federal returns and certain state tax returns filed for the 2011 through 2014 tax years have utilized carryforward tax attributes generated in prior tax years, including net operating losses that could potentially be revised upon examination. Indefinite reinvestment assertion During the fourth quarter of fiscal year 2015, the Company completed a reorganization of certain foreign subsidiaries that changed the historical ownership structure. As of June 28, 2015, $57,531 of earnings and profits of the Company’s foreign subsidiaries are deemed to be permanently reinvested, including all cash and cash equivalents on-hand at the Company’s foreign operations. In accordance with ASC 740-30-25-17, the Company has no current or deferred tax liabilities recorded (which considers any applicable U.S. federal income taxes and foreign withholding taxes) based on this indefinite reinvestment assertion. Nevertheless, in future periods, the Company will continue to assess the existing circumstances, including any changes in tax laws, and reevaluate the necessity for any deferred tax liability. Computation of the potential tax liabilities associated with indefinitely reinvested earnings is not practicable.

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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 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 2: 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 Reference 3: 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 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 SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 + Details
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