Income Taxes (Tables)

12 Months Ended

Jun. 30, 2023

Schedule of effective income tax rate reconciliation

Income Taxes

The Company’s effective income tax rate for the years ended June 30, 2023 and 2022 was 14.3% and (10.0%), respectively, which differed from the amount computed by applying the applicable U.S. federal statutory corporate income tax rate of 21% in each period as a result of the following factors:


	Year ended June 30,
	2023		2022
	in thousands
Statutory rate	$	(10,667)	$	(1,520)
IRC Section 162(m) limitation (a)	588		506
Change in valuation allowance	4,297		2,738
Permanent adjustments	457		662
Prior year true-up and other	157		389
Income from entities not subject to taxation	605		302
State tax	(2,678)		(2,354)
Provision for income taxes	$	(7,241)	$	723

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(a)Reflects the permanent addback for the Section 162(m) limitation, which limits the deduction of compensation for the five highest paid officers to $1,000,000.

Schedule of provision for income taxes

Provision for income taxes consisted of the following for the years ended June 30, 2023 and 2022:


	Year ended June 30,
	2023		2022
	in thousands
Current:
Federal	$	3,709	$	(998)
State	575		(339)
Total current tax expense	4,284		(1,337)

Deferred:
Federal	(10,263)		1,408
State	(1,262)		652
Total deferred tax expense	(11,525)		2,060
Total provision for income taxes	$	(7,241)	$	723

Schedule of components of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities were as follows for the years ended June 30, 2023 and 2022:


	Year ended June 30,
	2023		2022
	in thousands
Deferred tax assets:
Amortization	$	629	$	686
Federal net operating losses	17,147		3,083
State net operating losses	5,701		4,048
Provision for uncollectible accounts	1,114		869
Accrued vacation	835		828
Reported and estimated claims	1,164		1,025
Stock-based compensation	449		185
Accrued bonuses	582		102
Interest Expense	791		496
Lease liability	6,784		—
Other	—		6
Total deferred tax assets	35,196		11,328
Valuation allowance	(8,347)		(4,050)
Deferred tax assets, net of valuation allowance	26,849		7,278
Deferred tax liabilities:
Goodwill	(6,697)		(9,108)
Depreciation	(13,137)		(8,430)
Equity investment	(5,019)		(5,429)
Prepaid expenses	(1,792)		(2,072)
ROU asset	(6,436)		—
Other	(4)		—
Total deferred tax liabilities	(33,085)		(25,039)
Net deferred tax liability	$	(6,236)	$	(17,761)