Note 16 - Income Taxes

9 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

1

6

– INCOME TAXES

The Company's effective income tax rate is based on expected income, statutory rates and tax planning opportunities available in the various jurisdictions in which it operates. For interim financial reporting, the Company estimates the annual income tax rate based on projected taxable income for the full year and records a quarterly income tax provision or benefit in accordance with the anticipated annual rate. The Company refines the estimates of the year's taxable income as new information becomes available, including actual year-to-date financial results. This continual estimation process often results in a change to the expected effective income tax rate for the year. When this occurs, the Company adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected income tax rate. Significant judgment is required in determining the effective tax rate and in evaluating tax positions.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in

March 2020.

The CARES Act allowed the Company to utilize a Net Operating Loss (NOL) Carryback resulting in a revaluation of its deferred tax assets creating a favorable impact of

$0.3

million in the

third

quarter of fiscal

2020.

In addition, the Company sold its North Canton, Ohio facility in the

third

quarter of fiscal

2020

resulting in a book gain of

$3.7

million. The sale generated a capital gain during the quarter resulting in a tax benefit due to the utilization of a capital loss carryforward, which reduced the anticipated full year estimated effective income tax rate.

In the

first

quarter of fiscal

2020,

the Company sold its New Windsor, New York facility resulting in a book gain of

$4.8

million. The Company was able to utilize a deferred tax asset of

$864,000

related to the sale of the facility.

In the

second

quarter of fiscal

2019,

a deferred tax asset of

$4.8

million was created as a result of the impairment of goodwill in the Lighting reporting unit.

	Three Months Ended						Nine Months Ended
	March 31						March 31
	2020			2019			2020			2019
Reconciliation of effective tax rate:
Provision for income taxes at the anticipated annual tax rate		10.8	%		(0.7	)%		16.7	%		13.6	%
Uncertain tax positions		1.5			(0.1	)		(0.3	)		0.6
Deferred income tax adjustments		(16.7	)		-			(2.5	)		6.7
Shared-based compensation		4.4			(3.6	)		3.7			(0.9	)
Effective tax rate		-	%		(4.4	)%		17.6	%		20.0	%