Note 9 - Income Taxes

9 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Text Block]

Note 9.    Income Taxes

The Company recorded an income tax benefit of $21,053 for the three months ended December 31, 2012 which resulted in an effective tax rate of 27.5% and an income tax benefit of $21,098 for the nine months ended December 31, 2012 which resulted in an effective tax rate of 27.5%. Each of these periods reflects a $78,609 goodwill impairment charge that resulted in a $21,761 discrete tax benefit associated with the portion of the Company’s goodwill that is deductible for income taxes. That discrete tax benefit was reflected as a reduction to our deferred income tax liabilities. The effective tax rate of 27.7% for this benefit was less than the federal statutory rate of 35.0%, primarily due to a portion of the goodwill impairment that was not deductible for income tax purposes. Our effective income tax rate is derived by estimating our pretax income and income tax expense for the year. Excluding the discrete tax items associated with the goodwill impairment charge and a discrete tax benefit of $112 related to a tax return to provision adjustment recorded in the three and nine month periods ended December 31, 2012, the effective tax rate was 40.0% for fiscal 2013. For the nine months ended December 31, 2011 the Company recorded a provision for income taxes of $1,330 (including tax expense of $260 relating to an extraordinary gain), which consisted of federal and state income taxes, as well as discrete items that resulted in a net benefit of $202 related to tax return to provision adjustments. Excluding the discrete tax benefit, the Company’s effective tax rate was 38.6% in fiscal 2012.

In accordance with the provisions of ASC 740, Income Taxes, we recognize in our financial statements only those tax positions that meet the more-likely-than-not-recognition threshold. We establish tax reserves for uncertain tax positions that do not meet this threshold. Interest and penalties associated with income tax matters are included in the provision for income taxes in our consolidated statements of operations. Our accrual for interest and penalties was $21 at December 31, 2012.