Income Taxes

12 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

4. Income Taxes

The components of income before income taxes consist of the following (in thousands):

	Year ended June 30
	2010		2011			2012
Domestic income	$	5,524	$	3,820		$	2,387
Foreign income		321		(40	)		(49	)
Income before income taxes	$	5,845	$	3,780		$	2,338

Significant components of income tax expense (benefit) are as follows (in thousands):

	Year ended June 30
	2010			2011			2012
Income tax provision (benefit):
Current
Federal	$	1,476		$	1,602		$	1,175
State		91			83			64
Foreign		170			40			68
Total current		1,737			1,725			1,307
Deferred:
Federal		53			(791	)		(633	)
State.		(17	)		(35	)		9
Foreign		—			—			—
Total deferred		36			(826	)		(624	)
	$	1,773		$	899		$	683

The Company’s provision for income taxes differs from the expected provision computed by applying the statutory federal income tax rate of 34% to income from continuing operations before income taxes for 2010, 2011 and 2012 as a result of the following (in thousands):

	Year ended June 30
	2010			2011			2012
Computed at statutory rate of 34%	$	1,987		$	1,285		$	795
State income taxes, net of federal benefit		49			32			48
Effect of foreign operations		17			47			85
Non-deductible stock-based compensation		82			54			17
Deemed foreign dividends		96			50			31
Federal, foreign and state tax credits generated		(358	)		(412	)		(208	)
Benefit of tax exempt interest income		(42	)		(27	)		(30	)
Benefit of Section 199 deductions		(122	)		(163	)		(127	)
Non-deductible charges		44			52			48
Increase (reduction) of uncertain tax positions		—			—			7
Other		20			(19	)		17
	$	1,773		$	899		$	683

The components of deferred income taxes at June 30, 2011 and 2012 are as follows (in thousands):

	June 30,
	2011			2012
Deferred tax assets:
Domestic tax credit carryforwards	$	457		$	450
Accrued expenses and reserves		1,010			1,335
Depreciable assets		187			—
Stock-based compensation		1,140			1,480
Purchased technology, net		273			596
Total deferred tax assets		3,067			3,861
Deferred tax liabilities:
Prepaid expenses		(66	)		(141	)
Depreciable assets		—			(95	)
Total deferred tax liabilities		(66	)		(236	)
Valuation allowance for deferred tax assets		(224	)		(224	)
Net deferred tax assets	$	2,777		$	3,401

As of June 30, 2012, the Company expects that upon filing of its domestic tax return for fiscal year 2012 it will have state research and development credit carryforwards of approximately $0.5 million and a state temporary credit for business loss carryforwards of approximately $0.2 million. These carryforwards will begin to expire in fiscal 2021 and 2027, respectively, if not utilized.

At June 30, 2012, the Company has a valuation allowance of $0.2 million, which is primarily related to the Texas research and development carryforwards and the determination that these assets will likely expire prior to utilization.

As of June 30, 2011 and 2012, the Company had a Federal income tax payable of $0.4 million and $0.2 million, respectively.