Income Taxes (Tables)

12 Months Ended

Jun. 30, 2020

Income Taxes

Schedule of provision for income taxes

The provision for income taxes is comprised of the following (in thousands):

	For the Years Ended
	June 30,
	2020		2019
Current income taxes:
Federal	$	1,715	$	310
State		404		141
		2,119		451
Deferred income tax provision		165		771
Provision for income taxes	$	2,284	$	1,222

Schedule of effective income tax rate reconciliation

A reconciliation of the U.S. Federal statutory income tax rate to our actual effective tax rate on earnings before income taxes is as follows for the years ended June 30, (dollars in thousands):

	2020				2019
			% of				% of
			Pre-tax				Pre-tax
	Amount		Income		Amount		Income
Tax at Federal statutory rate	$	2,269	21.0	%	$	2,822	21.0	%
Increases (decreases) in taxes resulting from:
Meals and entertainment		44	0.4	%		49	0.3	%
State income taxes, net of Federal income tax benefit		112	1.0	%		103	0.8	%
Foreign source income not subject to tax		(1,213)	(11.2)	%		(1,219)	(9.1)	%
R&D Credit		(523)	(4.8)	%		(408)	(3.0)	%
Transition tax		0	0.0	%		0	0.0	%
Foreign withholding tax		0	0.0	%		0	0.0	%
Release of accrued tax reserves		0	0.0	%		(151)	(1.1)	%
Uncertain Tax Positions		775	7.1	%		0	0.0	%
IRS examination settlements		832	7.7	%		12	0.1	%
Other, net		(12)	(0.1)	%		14	0.1	%
Effective tax rate	$	2,284	21.1	%	$	1,222	9.1	%

Schedule of deferred tax assets and liabilities

Deferred tax assets and deferred tax liabilities at June 30, 2020 and 2019 are as follows (in thousands):

	Deferred Tax Assets (Liabilities)
	2020		2019
Accounts receivable	$	40	$	17
Inventories		374		246
Accrued liabilities		262		250
Stock based compensation expense		96		36
Intangibles		(300)		(502)
R&D credit		0		378
Property, plant and equipment		(484)		(407)
Revenue reserves		308		319
Other deferred tax liabilities		(408)		(409)
		(112)		(72)
Valuation allowance		—		—
Net deferred tax liabilities	$	(112)	$	(72)

Schedule of unrecognized tax benefits roll forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	Tax		Interest		Total
Balance of gross unrecognized tax benefits as of July 1, 2018	$	221	$	—	$	221
Decrease to unrecognized tax benefits resulting from the release of R&D credits due to the IRS audit		(151)				(151)
Increases to unrecognized tax benefits resulting from the generation of additional R&D credits		55		—		55
Balance of gross unrecognized tax benefits as of June 30, 2019	$	125	$	—	$	125
Increase to unrecognized tax benefits resulting from deemed dividends for investments in US property		682		83		765
Increases to unrecognized tax benefits resulting from the generation of additional R&D credits		59		—		59
Balance of gross unrecognized tax benefits as of June 30, 2020	$	866	$	83	$	949