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INCOME TAXES | 12 Months Ended
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Jun. 30, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | The components of (loss) income before income taxes are as follows:
|  | Fiscal Years
|  | 2017 |  | 2016 |  | 2015
|  | (Dollars in thousands)
(Loss) income before income taxes: |  |  |  |  |  |
U.S. |  | $ | (7,759 | ) |  | $ | 12,481 |  |  | $ | (6,630 | )
International |  | 924 |  |  | 35 |  |  | 1,652 |
|  | $ | (6,835 | ) |  | $ | 12,516 |  |  | $ | (4,978 | )
The provision for income taxes consists of:
|  | Fiscal Years
|  | 2017 |  | 2016 |  | 2015
|  | (Dollars in thousands)
Current: |  |  |  |  |  |
U.S. |  | $ | 994 |  |  | $ | 819 |  |  | $ | 1,670 |
International |  | 268 |  |  | 1,207 |  |  | 1,781 |
Deferred: |  |  |  |  |  |
U.S. |  | 7,901 |  |  | 6,997 |  |  | 9,439 |
International |  | 61 |  |  | 26 |  |  | 1,715 |
|  | $ | 9,224 |  |  | $ | 9,049 |  |  | $ | 14,605 |
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
|  | 2017 |  | 2016 |  | 2015
U.S. statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal income tax benefit |  | (2.2 | ) |  | 5.4 |  |  | (3.7 | )
Valuation allowance (1) |  | (168.0 | ) |  | 66.5 |  |  | (362.8 | )
Foreign income taxes at other than U.S. rates |  | (2.0 | ) |  | 2.5 |  |  | (5.3 | )
Officer life insurance |  | 6.8 |  |  | (7.6 | ) |  | 9.6 |
Work Opportunity and Welfare-to-Work Tax Credits |  | 23.2 |  |  | (24.7 | ) |  | 53.3 |
Expiration of capital loss carryforward |  | — |  |  | — |  |  | (9.5 | )
Other, net (2) |  | (27.8 | ) |  | (4.8 | ) |  | (10.0 | )
|  | (135.0 | )% |  | 72.3 | % |  | (293.4 | )%
_______________________________________________________________________________ (1) See Note 1 to the Consolidated Financial Statements. (2) The (27.8)% of Other, net in fiscal year 2017 includes the rate impact of meals and entertainment expense disallowance, adjustments resulting from charitable contributions, employee share-based compensation payments, and miscellaneous items of (5.5)%, (8.6)%, (21.8)%, and 8.1%, respectively. Miscellaneous items do not include any items in excess of 5% of computed tax. The 4.8% of Other, net in fiscal year 2016 does not include the rate impact of any items in excess of 5% of computed tax. The (10.0)% of Other, net in fiscal year 2015 includes the rate impact of meals and entertainment expense disallowance and miscellaneous items of (6.0)% and (4.0)%, respectively. The components of the net deferred tax assets and liabilities are as follows:
|  | June 30,
|  | 2017 |  | 2016
|  | (Dollars in thousands)
Deferred tax assets: |  |  |  |
Deferred rent |  | $ | 13,216 |  |  | $ | 14,542 |
Payroll and payroll related costs |  | 24,666 |  |  | 27,066 |
Net operating loss carryforwards |  | 29,171 |  |  | 22,433 |
Tax credit carryforwards |  | 32,852 |  |  | 30,386 |
Inventories |  | 1,914 |  |  | 2,369 |
Fixed assets |  | 7,982 |  |  | 82 |
Accrued advertising |  | 2,723 |  |  | 3,076 |
Insurance |  | 4,153 |  |  | 4,285 |
Other |  | 7,494 |  |  | 7,809 |
Subtotal |  | $ | 124,171 |  |  | $ | 112,048 |
Valuation allowance |  | (120,903 | ) |  | (110,046 | )
Total deferred tax assets |  | $ | 3,268 |  |  | $ | 2,002 |
Deferred tax liabilities: |  |  |  |
Goodwill and intangibles |  | $ | (103,889 | ) |  | $ | (95,451 | )
Other |  | (7,498 | ) |  | (6,720 | )
Total deferred tax liabilities |  | $ | (111,387 | ) |  | $ | (102,171 | )
Net deferred tax liability |  | $ | (108,119 | ) |  | $ | (100,169 | )
At June 30, 2017, the Company has tax effected federal, state, Canada and U.K. net operating loss carryforwards of approximately $21.4, $6.6, $0.2 and $1.0 million, respectively. The federal loss carryforward will expire from fiscal years 2034 to 2037. The state loss carryforwards will expire from fiscal years 2018 to 2037. The Canada loss carryforward will expire in fiscal years 2036 and 2037. The U.K. loss carryforward has no expiration. The Company's tax credit carryforward of $32.9 million consists of $30.9 million that will expire from fiscal years 2030 to 2037, $0.5 million that will expire from fiscal years 2020 to 2027 and $1.5 million of carryforward that has no expiration date. As of June 30, 2017, undistributed earnings of international subsidiaries of approximately $10.2 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 2013 have been examined by the Internal Revenue Service (IRS) and were moved to the IRS Appeals Division for outstanding IRS proposed audit adjustments. The Company believes its income tax positions and deductions will be sustained and will continue to vigorously defend such positions. All earlier tax years are closed to examination. With limited exceptions, the Company is no longer subject to state and international income tax examination by tax authorities for years before 2012. A rollforward of the unrecognized tax benefits is as follows:
|  | Fiscal Years
|  | 2017 |  | 2016 |  | 2015
|  | (Dollars in thousands)
Balance at beginning of period |  | $ | 1,357 |  |  | $ | 1,496 |  |  | $ | 1,468 |
Additions based on tax positions related to the current year |  | 259 |  |  | 138 |  |  | 37 |
Additions based on tax positions of prior years |  | 80 |  |  | 170 |  |  | 352 |
Reductions on tax positions related to the expiration of the statute of limitations |  | (179 | ) |  | (207 | ) |  | (361 | )
Settlements |  | (129 | ) |  | (240 | ) |  | — |
Balance at end of period |  | $ | 1,388 |  |  | $ | 1,357 |  |  | $ | 1,496 |
If the Company were to prevail on all unrecognized tax benefits recorded, a benefit of approximately $0.9 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 2017, 2016 and 2015, we recorded interest and penalties of approximately $0.1 million as additions to the accrual net of the respective reversal of previously accrued interest and penalties. As of June 30, 2017, the Company had accrued interest and penalties related to unrecognized tax benefits of $1.1 million. This amount is not included in the gross unrecognized tax benefits noted above. It is reasonably possible 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.

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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