Income Taxes (Tables)

12 Months Ended

Jun. 30, 2019

Sources of pretax income (loss)



	Fiscal Years Ended
	June 30, 2019			June 30, 2018			June 30, 2017
	(In thousands)
Domestic	$	46,032		$	(2,656	)	$	19,763
Foreign	(7,620		)	(9,492		)	(17,317		)
Total	$	38,412		$	(12,148	)	$	2,446

Components of the provision for income taxes

Components of the provision for income tax expense (benefit)



	Fiscal Years Ended
	June 30, 2019			June 30, 2018			June 30, 2017
	(In thousands)
Current:
Federal	$	6,085		$	(121	)	$	6,522
State	2,390			135			(185		)
Foreign	(97		)	504			(1,509		)
	8,378			518			4,828
Deferred:
Federal	(528		)	1,093			618
State	451			(590		)	101
Foreign	2,129			(1,689		)	(3,239		)
	2,052			(1,186		)	(2,520		)
	$	10,430		$	(668	)	$	2,308

Difference between expected income tax provision applying domestic federal statutory tax rate and reported income tax provision

Reconciliation between the expected income tax provision applying the domestic federal statutory tax rate and the reported income tax provision



	Fiscal Years Ended
	June 30, 2019			June 30, 2018			June 30, 2017
	(In thousands)
Expected provision (benefit) for federal income taxes at the statutory rate	$	8,067		$	(3,408	)	$	857
State income taxes, net of federal benefit	2,288			247			808
Impairment of non-deductible goodwill⁽¹⁾	—			2,342			—
Charges without tax benefit	1,233			1,100			1,741
Change in valuation allowance⁽²⁾	4,512			1,173			1,295
Reversal of branch liability⁽²⁾	(3,546		)	—			—
Excess tax expense (benefit) on stock-based compensation⁽³⁾	(296		)	511			(496		)
Remeasurement of deferred taxes⁽⁴⁾	—			(455		)	—
IRC S199 deduction	—			—			(749		)
Research and development and other tax credits	(1,972		)	(1,665		)	(1,626		)
Foreign tax differential	(248		)	(10		)	1,496
Noncontrolling interest	—			—			(112		)
Change in uncertain tax positions	22			(7		)	(22		)
Other	370			(496		)	(884		)
Provision (benefit) for federal, state and foreign income taxes	$	10,430		$	(668	)	$	2,308


(1)	Relates to a $17.3 million impairment of goodwill, which included $8.3 million of non-deductible goodwill. See Note 4 - Goodwill and Other Intangible Assets for more information about the impairment.

(2)

In fiscal 2019, the Company placed $4.5 million of valuation allowances on net operating loss carryforwards and foreign tax credits generated by its branch operations in Canada, which will likely not be utilized prior to their expiration. These valuation allowances were largely offset by the reversal $3.5 million of branch liabilities associated with the Canadian net operating loss carryforwards and foreign tax credits.


(3)	This represents the amount recognized for excess tax benefits upon the vesting or exercise of nonvested deferred share awards and stock options, respectively, for which the Company expects to receive an income tax deduction. The Company adopted ASU 2016-09 in fiscal 2017, which required that excess tax benefits and tax deficiencies be recognized as part of the provision for income taxes.


(4)	This represents the remeasurement of deferred taxes in connection with Tax Cuts and Jobs Act - see Deferred Taxes Remeasurement paragraph above.

Significant components of Company's deferred tax assets and liabilities

Significant components of the Company’s deferred tax assets and liabilities



	June 30, 2019			June 30, 2018
	(In thousands)
Deferred tax assets:
Warranty reserve	$	206		$	206
Bad debt reserve	238			1,629
Paid-time-off accrual	616			575
Insurance reserve	1,577			1,608
Legal reserve	1			27
Net operating loss benefit and credit carryforwards	10,054			10,169
Valuation allowance	(4,959		)	(1,638		)
Accrued compensation and pension	1,115			758
Stock compensation expense on nonvested deferred shares	3,679			2,733
Accrued losses	194			171
Foreign currency translation and other	833			1,066
Total deferred tax assets	13,554			17,304
Deferred tax liabilities:
Tax over book depreciation	9,349			8,137
Tax over book amortization	1,770			702
Branch future liability	34			3,018
Receivable holdbacks and other	16			1,028
Total deferred tax liabilities	11,169			12,885
Net deferred tax asset	$	2,385		$	4,419

Significant components of Company's deferred tax assets and liabilities as reported in consolidated balance sheets

As reported in the Consolidated Balance Sheets:



	June 30, 2019			June 30, 2018
	(In thousands)
Deferred income tax assets	2,683			4,848
Deferred income tax liabilities	(298		)	(429		)
Net deferred tax asset	$	2,385		$	4,419

Summary of Operating Loss Carryforwards



Operating Loss Carryforwards	Expiration Period	Amount (in thousands)
State net operating losses	June 2024 to June 2039	$	18,638
Foreign net operating losses	June 2029 to June 2039	$	23,749

Summary of Tax Credit Carryforwards



Tax Credit Carryforwards	Expiration Period	Amount (in thousands)
State tax credits	June 2032 to June 2034	$	834
Federal foreign tax credits	June 2020 to June 2025	$	1,302
Foreign tax credits	June 2035 to June 2039	$	660