XML 74 R17.htm IDEA: XBRL DOCUMENT
v3.2.0.727

INCOME TAXES | 12 Months Ended
--- | ---
Jun. 30, 2015
Income Tax Disclosure [Abstract] |
INCOME TAXES | The components of (loss) income before income taxes are as follows:
|  | Fiscal Years
|  | 2015 |  | 2014 |  | 2013
|  | (Dollars in thousands)
(Loss) income before income taxes: |  |  |  |  |  |
U.S. |  | $ | (6,630 | ) |  | $ | (52,815 | ) |  | $ | (23,526 | )
International |  | 1,652 |  |  | (2,481 | ) |  | 35,307 |
|  | $ | (4,978 | ) |  | $ | (55,296 | ) |  | $ | 11,781 |
The provision (benefit) for income taxes consists of:
|  | Fiscal Years
|  | 2015 |  | 2014 |  | 2013
|  | (Dollars in thousands)
Current: |  |  |  |  |  |
U.S. |  | $ | 1,670 |  |  | $ | 1,430 |  |  | $ | (21,264 | )
International |  | 1,781 |  |  | 890 |  |  | 710 |
Deferred: |  |  |  |  |  |
U.S. |  | 9,439 |  |  | 69,854 |  |  | 10,996 |
International |  | 1,715 |  |  | 781 |  |  | (95 | )
|  | $ | 14,605 |  |  | $ | 72,955 |  |  | $ | (9,653 | )
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to earnings (loss) before income taxes, as a result of the following:
|  | Fiscal Years
|  | 2015 |  | 2014 |  | 2013
U.S. statutory rate (benefit) |  | (35.0 | )% |  | (35.0 | )% |  | 35.0 | %
State income taxes, net of federal income tax benefit |  | 3.7 |  |  | (0.3 | ) |  | 3.6 |
Valuation allowance (1) |  | 362.8 |  |  | 161.9 |  |  | — |
Tax effect of goodwill impairment |  | — |  |  | 11.3 |  |  | — |
Foreign income taxes at other than U.S. rates |  | 5.3 |  |  | 1.4 |  |  | 3.5 |
Tax effect of foreign currency translation gain |  | — |  |  | — |  |  | (91.8 | )
Work Opportunity and Welfare-to-Work Tax Credits |  | (53.3 | ) |  | (5.2 | ) |  | (36.7 | )
Expiration of capital loss carryforward |  | 9.5 |  |  | — |  |  | — |
Other, net |  | 0.4 |  |  | (2.2 | ) |  | 4.5 |
|  | 293.4 | % |  | 131.9 | % |  | (81.9 | )%
_______________________________________________________________________________ (1) See Note 1 to the Consolidated Financial Statements. The 0.4% of Other, net in fiscal year 2015 includes the rate impact of meals and entertainment expense disallowance, officer’s life insurance and miscellaneous items of 6.0%, (9.6)% and 4.0%, respectively. The (2.2)% of Other, net in fiscal year 2014 does not include the rate impact of any items in excess of 5% of computed tax. The 4.5% of Other, net in fiscal year 2013 includes the rate impact of meals and entertainment expense disallowance, donated inventory, unrecognized tax benefits and miscellaneous items of 4.2%, (2.9)%, 2.3% and 0.9%, respectively. The components of the net deferred tax assets and liabilities are as follows:
|  | June 30,
|  | 2015 |  | 2014
|  | (Dollars in thousands)
Deferred tax assets: |  |  |  |
Deferred rent |  | $ | 14,561 |  |  | $ | 14,507 |
Payroll and payroll related costs |  | 27,646 |  |  | 24,857 |
Net operating loss carryforwards |  | 17,946 |  |  | 16,977 |
Tax credit carryforwards |  | 25,296 |  |  | 20,134 |
Inventories |  | 2,684 |  |  | 2,926 |
Accrued advertising |  | 4,853 |  |  | 2,707 |
Insurance |  | 6,779 |  |  | 6,801 |
Other |  | 6,329 |  |  | 6,323 |
Subtotal |  | $ | 106,094 |  |  | $ | 95,232 |
Valuation allowance |  | (103,240 | ) |  | (86,119 | )
Total deferred tax assets |  | $ | 2,854 |  |  | $ | 9,113 |
Deferred tax liabilities: |  |  |  |
Fixed assets |  | $ | (2,372 | ) |  | $ | (8,086 | )
Goodwill and intangibles |  | (87,383 | ) |  | (77,650 | )
Other |  | (6,309 | ) |  | (5,690 | )
Total deferred tax liabilities |  | $ | (96,064 | ) |  | $ | (91,426 | )
Net deferred tax liability |  | $ | (93,210 | ) |  | $ | (82,313 | )
At June 30, 2015, the Company has tax effected federal, state, Canada and U.K. net operating loss carryforwards of approximately $12.4, $4.7, $0.5 and $0.3 million, respectively. The federal loss carryforward will expire from fiscal years 2034 to 2035. The state loss carryforwards will expire from fiscal years 2016 to 2035. The Canada loss carryforward will expire in fiscal year 2035. The U.K. loss carryforward has no expiration. The Company's tax credit carryforward of $25.3 million consists of $23.3 million that will expire from fiscal years 2028 to 2035, $0.5 million that will expire from fiscal years 2020 to 2025 and $1.5 million of carryforward that has no expiration date. As of June 30, 2015, undistributed earnings of international subsidiaries of approximately $21.8 million were considered to have been reinvested indefinitely and, accordingly, the Company has not provided for U.S. income taxes on such earnings. It is not practicable for the Company to determine the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings. The Company files tax returns and pays tax primarily in the U.S., Canada, the U.K. and Luxembourg as well as states, cities, and provinces within these jurisdictions. The Company’s U.S. federal income tax returns for fiscal year 2010 through 2014 are currently under audit by the Internal Revenue Service (IRS). All earlier tax years are closed to examination. The Company has outstanding audit issues with the IRS for fiscal years 2010 and 2011 for which the IRS has proposed additional adjustments. The Company believes its income tax positions and deductions will be sustained and intends to vigorously defend its position on these issues and, accordingly, has appealed to the IRS Appeals Division. Final resolution of these issues is not expected to have a material impact on the Company’s financial position. For state tax audits, the statute of limitations generally spans three to four years, resulting in a number of states remaining open for tax audits dating back to fiscal year 2011. The Company is currently under audit in a number of states in which the statute of limitations has been extended back for fiscal years 2007 and forward. Internationally, including Canada, the statute of limitations for tax audits varies by jurisdiction, but generally ranges from three to five years. A rollforward of the unrecognized tax benefits is as follows:
|  | Fiscal Years
|  | 2015 |  | 2014 |  | 2013
|  | (Dollars in thousands)
Balance at beginning of period |  | $ | 1,468 |  |  | $ | 10,015 |  |  | $ | 4,381 |
(Reductions)/additions based on tax positions related to the current year |  | 37 |  |  | (2,114 | ) |  | 44 |
(Reductions)/additions based on tax positions of prior years |  | 352 |  |  | (505 | ) |  | 7,132 |
Reductions on tax positions related to the expiration of the statute of limitations |  | (361 | ) |  | (994 | ) |  | (1,403 | )
Settlements |  | — |  |  | (4,934 | ) |  | (139 | )
Balance at end of period |  | $ | 1,496 |  |  | $ | 1,468 |  |  | $ | 10,015 |
If the Company were to prevail on all unrecognized tax benefits recorded, a benefit of approximately $1.0 million would be recorded in the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. During the fiscal years 2015, 2014 and 2013, we recorded interest and penalties of approximately $0.1, $0.1 and $0.7 million, respectively, as additions to the accrual net of the respective reversal of previously accrued interest and penalties. As of June 30, 2015, the Company had accrued interest and penalties related to unrecognized tax benefits of $1.2 million. This amount is not included in the gross unrecognized tax benefits noted above. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next fiscal year. However, an estimate of the amount or range of the change cannot be made at this time.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration