Income Taxes

12 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

INCOME TAXES

12. INCOME TAXES

The provision (benefit) for income taxes on continuing operations are as follows:

	Year ended June 30,
	2012		2011			2010
Current	$	242	$	(834	)	$	917
Deferred		616		(7,775	)		(1,495	)
Total income tax expense (benefit)	$	858	$	(8,609	)	$	(578	)

Net deferred income tax assets recorded in the consolidated balance sheets are as follows:

	June 30,
	2012			2011
Net operating loss carryforward	$	5,624		$	3,004
Depreciation expense		(3,385	)		(3,954	)
Allowances for receivables		3,217			3,727
EHR Deferred gain		13			3,260
Accrued expenses		2,675			2,904
Intangible assets		4,273			4,879
Pension liabilities		208			42
Other		485			(152	)
		13,110			13,710
Less valuation allowance		(2,045	)		(2,078	)
Net deferred income tax assets	$	11,065		$	11,632

The differences between income taxes at the Federal statutory rate and the effective tax rate were as follows:

	Year ended June 30,
	2012			2011			2010
Income tax at Federal statutory rate	$	514		$	(8,212	)	$	(391	)
Changes in valuation allowance—continuing operations		(33	)		588			(86	)
U.S. state income taxes, net of federal benefit		(9	)		(1,046	)		(319	)
Share option expense		31			2			13
Amortization		316			9			9
Other		39			50			196
Total income tax expense (benefit)—continuing operations	$	858		$	(8,609	)	$	(578	)

The Company provided a $2,045 deferred tax valuation allowance as of June 30, 2012 so that the net deferred income tax assets were $11,065 as of June 30, 2012. Based upon management’s assessment, the Company determined that it was more likely than not that a portion of its deferred tax asset would not be recovered. The increase in the valuation allowance during the fiscal year ended June 30, 2012 resulted from reserving for certain state net operating loss carryforwards that were not reserved for in prior periods. It is more likely than not that these net operating loss carryforwards will not be realized in future years. The Company provided a $2,078 deferred tax valuation allowance as of June 30, 2011 so that the net deferred tax assets were $11,632 as June 30, 2011. The net operating loss carryforwards expire in 2023.

The Company accounts for uncertainty in income taxes for a change in judgment related to prior years’ tax positions in the quarter of such change. The company classifies interest and penalties related to unrecognized tax benefits as part of its provision for income taxes. Accordingly, included in the liability for unrecognized tax benefits was a liability of $19 as of June 30, 2012.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, included interest and penalties from July 1, 2009 through June 30, 2012 is presented below:

Balance at July 1, 2009	$	66
Additions based on tax positions related to current year		35
Additions for tax positions of prior years		0
Reductions for tax positions of prior years		(30	)
Settlements		0
Balance at June 30, 2010		71
Additions based on tax positions related to current year		0
Additions for tax positions of prior years		0
Reductions for tax positions of prior years		(34	)
Settlements		0
Balance at June 30, 2011		37
Additions based on tax positions related to current year		0
Additions for tax positions of prior years		0
Reductions for tax positions of prior years		(18	)
Settlements		0
Balance at June 30, 2012	$	19