XML 22 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes
6 Months Ended
Dec. 24, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

(6)       Income Taxes

 

For the six months ended December 24, 2017, the Company had an income tax benefit of $260 thousand calculated at a 27.5% weighted-average rate consistent with a statutory U.S. federal blended rate offset by an income tax expense of $246 thousand related to recording a valuation allowance for deferred tax assets of $260 thousand foreign taxes of $6 thousand, state taxes of $13 thousand and an additional IRS refund of $33 thousand.

 

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. The Company continues to record a full valuation allowance against its net deferred tax assets. The Company assessed whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, using a “more likely than not” standard. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Future sources of taxable income were also considered in determining the amount of the recorded valuation allowance. Based on the Company’s review of this evidence at December 24, 2017, management determined that a full valuation allowance against all of the Company’s deferred tax assets at December 24, 2017 was appropriate.

 

In December 2017, President Donald Trump signed the Tax Cuts and Jobs Act. The new law drops the income tax rate for corporations to 21% effective January 1, 2018. Due to the tax rate change, the deferred tax assets as of December 24, 2017 were adjusted by $3.3 million and the valuation allowance was adjusted by the same amount. There were approximately 6.0 million of deferred tax assets at December 24, 2017.