Income Taxes (Tables)

12 Months Ended

Jul. 01, 2018

The provision for income taxes consisted of the following (thousands of dollars):

	Years Ended
	July 1, 2018		July 2, 2017		July 3, 2016
Currently payable:
Federal	$	156	$	228	$	18
State		73		3		130
Foreign		812		2,202		1,893
		1,041		2,433		2,041
Deferred tax provision		1,029		1,851		3,027
	$	2,070	$	4,284	$	5,068

Difference Between Income Taxes Computed at the Federal Statutory Tax Rate and the Provision for Income Taxes

The items accounting for the difference between income taxes computed at the Federal statutory tax rate and the provision for income taxes were as follows:

	Years Ended
	July 1, 2018			July 2, 2017			July 3, 2016
U.S. statutory rate		28.0	%		35.0	%		34.0	%
State taxes, net of Federal tax benefit		1.6			1.2			1.3
Foreign subsidiaries		(0.7	)		(1.1	)		0.6
U.S. taxation on non-U.S. earnings		—			3.8			—
U.S. tax reform: transition tax		(3.0	)		—			—
U.S. tax reform: change in deferred rate		(9.3	)		—			—
Research and development tax credit		(2.5	)		(2.7	)		—
Non-controlling interest		(5.6	)		(9.9	)		(9.3	)
Uncertain tax positions		2.1			0.8			—
Stock based compensation		1.7			0.1			0.2
Other		(0.6	)		(1.1	)		(0.4	)
		11.7	%		26.1	%		26.4	%

Components of Deferred Tax (Liabilities) Assets

The components of deferred tax (liabilities) assets were as follows (thousands of dollars):

	July 1, 2018			July 2, 2017
Unrecognized pension and postretirement benefit plan liabilities	$	6,887		$	11,191
Accrued warranty		517			925
Payroll-related accruals		1,959			2,605
Stock-based compensation		727			1,488
Inventory reserve		799			1,249
Environmental reserve		303			484
Repair and maintenance supply parts reserve		212			333
Allowance for doubtful accounts		118			185
NOL/credit carry-forwards		248			1,669
Postretirement obligations		(375	)		(405	)
Accumulated depreciation		(4,902	)		(6,034	)
Accrued pension obligations		(9,235	)		(14,483	)
Joint ventures		814			808
Other		967			241
	$	(961	)	$	256

Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended July 1, 2018 and July 2, 2017 (thousands of dollars):

	Years Ended
	July 1, 2018			July 2, 2017
Unrecognized tax benefits, beginning of year	$	571		$	441
Gross increases – tax positions in prior years		101			28
Gross decreases – tax positions in prior years		—			—
Gross increases – current period tax positions		126			177
Tax years closed		(57	)		(75	)
Unrecognized tax benefits, end of year	$	741		$	571