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Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | (11) Income Taxes The components of income tax expense (benefit) from continuing operations are as follows (in thousands):
| Year Ended June 30,
| 2012 |  | 2011
Current |  |  |  |  |
Federal | $ | — |  | $ | —
State and local |  | 17 |  |  | (53)
Foreign |  | — |  |  | —
| $ | 17 |  | $ | (53)
Deferred |  |  |  |  |
Federal |  | — |  |  | —
State and local |  | — |  |  | —
Foreign |  | — |  |  | —
Total Tax Expense | $ | 17 |  | $ | (53)
A reconciliation of the reported income tax expense to the amount that would result by applying the U.S. Federal statutory rate to the income (loss) before income taxes to the actual amount of income tax expense (benefit) recognized follows (in thousands):
| Year Ended June 30,
| 2012 |  | 2011
Expected expense (benefit) | $ | (1,161) |  | $ | (2,112)
State Tax Expense |  | 17 |  |  | 3
Adjustment from prior year state tax filings |  | — |  |  | (56)
Change in temporary tax adjustments not recognized |  | 744 |  |  | (605)
Net reduction in prior year DTA balances |  | — |  |  | 2,179
Stock compensation |  | 352 |  |  | 418
Other permanent items |  | 65 |  |  | 120
Total | $ | 17 |  | $ | (53)
The Company’s deferred tax assets as of June 30, 2012 and 2011 consist of the following (in thousands):
| Year Ended June 30,
| 2012 |  | 2011
Deferred tax assets: |  |  |  |  |
Net operating loss carryforwards | $ | 13,021 |  | $ | 12,260
Alternative minimum tax credit carryforwards |  | 671 |  |  | 671
Accrued expenses and other timing |  | 823 |  |  | 333
Total gross deferred tax assets | $ | 14,515 |  | $ | 13,264
Less — valuation allowance |  | (13,261) |  |  | (12,184)
Net deferred tax assets | $ | 1,254 |  | $ | 1,080
Deferred tax liabilities: |  |  |  |  |
Property and equipment, principally due to differences in depreciation |  | (1,254) |  |  | (1,080)
Total gross deferred tax liabilities | $ | (1,254) |  | $ | (1,080)
Net deferred tax assets (liabilities) | $ | — |  | $ | —
The valuation allowance increased by approximately $1.1 million for the year ended June 30, 2012. The valuation allowance decreased by approximately $0.6 million for the year ended June 30, 2011. The Company adjusted the value of its deferred tax assets (before valuation allowance) as the result of proposed adjustments from its current federal tax examination as well as further analysis of the computations underlying its prior year deferred tax asset balances. Since the Company reflects a full valuation allowance against its deferred tax assets, there has been no income tax impact from these changes. At June 30, 2012, the Company had accumulated net operating loss carryforwards of approximately $35.7 million for Federal income tax purposes ($12.5 million, tax effected) that are available to offset future regular taxable income. These net operating loss carryforwards expire between the years 2021 and 2033. Utilization of these net operating losses is limited due to the changes in stock ownership of the Company associated with the October 2007 Exchange Offer; as such, the benefit from these losses may not be realized. The Company also has accumulated state net operating loss carryforwards of approximately $9.9 million ($0.4 million, tax effected) that are available to offset future state taxable income. These net operating loss carryforwards expire between the years 2019 and 2033. These losses may also be subject to utilization limitations; as such, the benefit from these losses may not be realized. The Company is currently under examination by the Internal Revenue Service for the fiscal years ended June 30, 2008 through 2010. Loss carryovers are generally subject to modification by tax authorities until 3 years after they have been utilized; as such, the Company is subject to examination for the fiscal years ended 2000 through present for federal purposes and fiscal years ended 2006 through present for state purposes. The Company has a temporary credit for business loss carryovers that may be utilized to offset its Texas margin tax. The credit amount is $0.2 million ($0.1 million, tax effected). These credits may be used to offset $13,000 of state tax liability each year and expire annually if not utilized. The Company has $0.7 million of alternative minimum tax credit carryforwards available to offset future regular tax liabilities. The Company files consolidated returns for federal, California, Florida, and Texas income and franchise taxes. In assessing the need for a valuation allowance, management considers whether it is more likely than not that some portion or all of the net deferred tax assets will be utilized to offset future tax liabilities. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of June 30, 2012, the Company provided a full valuation allowance of approximately $13.3 million against its net deferred tax assets. Uncertain Tax Positions The Company’s change in uncertain tax benefit reserves during 2012 and 2011 were as follows (in thousands):
| 2012 |  | 2011
Balance at July 1, 2011 | $ | 60 |  | $ | —
Additions for tax positions of current period |  | — |  |  | —
Additions for tax positions of prior years |  | 4 |  |  | 60
Decreases for tax positions of prior years |  | — |  |  | —
Balance at June 30, 2012 | $ | 64 |  | $ | 60
As of June 30, 2012, total uncertain tax positions related to state income taxes amounted to $64,000. Should the tax positions prove successful, the Company’s tax expense would be reduced by $42,000 (net of federal benefit). We recognize interest and penalties related to income tax matters in income tax expense. During the years ended June 30, 2012 and 2011, we recognized interest expense related to uncertain tax positions of approximately $3,000 and $14,000, respectively.

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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 Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: 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=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 7: 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 8: 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 + Details
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