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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2021

Schedule of sources of pretax income (loss)

Sources of pretax income (loss)


	Fiscal Years Ended
	June 30, 2021		June 30, 2020		June 30, 2019
	(In thousands)
Domestic	$	(38,867)	$	(32,660)	$	46,032
Foreign	(4,396)		(3,984)		(7,620)
Total	$	(43,263)	$	(36,644)	$	38,412

Components of the provision for income tax expense (benefit)


	Fiscal Years Ended
	June 30, 2021		June 30, 2020		June 30, 2019
	(In thousands)
Current:
Federal	$	(13,154)	$	(376)	$	6,085
State	465		412		2,390
Foreign	(239)		23		(97)
	(12,928)		59		8,378
Deferred:
Federal	774		(5,000)		(528)
State	(291)		(1,091)		451
Foreign	406		2,462		2,129
	889		(3,629)		2,052
	$	(12,039)	$	(3,570)	$	10,430

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, 2021		June 30, 2020		June 30, 2019
	(In thousands)
Expected provision (benefit) for federal income taxes at the statutory rate	$	(9,085)	$	(7,695)	$	8,067
State income taxes, net of federal benefit	(1,240)		(768)		2,288

Impairment of non-deductible goodwill(1)	—		1,813		—
Charges without tax benefit	961		1,707		1,233
Change in valuation allowance(2)	2,797		3,062		4,512
Reversal of branch liability(2)	—		—		(3,546)
Excess tax expense (benefit) on stock-based compensation	1,826		230		(296)



Research and development and other tax credits	(1,707)		(1,724)		(1,972)
Foreign tax differential	(96)		(132)		(248)
Federal rate differential net operating loss carryback(3)	(5,223)		—		—
Change in uncertain tax positions	(7)		20		22

Other	(265)		(83)		370
Provision (benefit) for federal, state and foreign income taxes	$	(12,039)	$	(3,570)	$	10,430

(1)In fiscal 2020, we impaired $32.9 million of goodwill, which included $8.6 million of non-deductible goodwill. See Note 4 - Goodwill and Other Intangible Assets for more information about the impairments.

(2)In fiscal 2021, we placed $2.8 million of valuation allowances, including $1.5 million on certain state net operating loss carryforwards due to a recent history of cumulative losses for a subsidiary. In fiscal 2020, we placed $3.1 million of valuation allowances on net operating loss carryforwards and foreign tax credits primarily related to Canada. In fiscal 2019, we placed $4.5 million of valuation allowances on net operating loss carryforwards and foreign tax credits generated by 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)Relates to fiscal 2021 net operating losses carried back under provisions of the CARES Act to fiscal years 2016 and 2017 which had a 35% federal tax rate.

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

Significant components of our deferred tax assets and liabilities


	June 30, 2021		June 30, 2020
	(In thousands)
Deferred tax assets:
Warranty reserve	$	206	$	206
Bad debt reserve	231		233
Paid-time-off accrual	747		669
Insurance reserve	1,229		1,221
Legal reserve	146		207
Net operating loss benefit and credit carryforwards	14,966		10,354
Valuation allowance	(11,104)		(7,763)
Accrued compensation and pension	690		1,447
Prepaid insurance	27		—
Stock compensation expense on nonvested deferred shares	1,895		3,231
Accrued losses	64		96
Restructuring reserve	725		1,381
Book over tax amortization	3,765		5,195
Deferred FICA	1,920		—
Foreign currency translation and other	665		843
Total deferred tax assets	16,172		17,320
Deferred tax liabilities:
Tax over book depreciation	10,315		11,313

Branch future liability	—		74

Receivable holdbacks and other	596		6
Total deferred tax liabilities	10,911		11,393
Net deferred tax asset	$	5,261	$	5,927

Significant components of the Company's deferred tax assets and liabilities as reported in the Consolidated Balance Sheets

As reported in the Consolidated Balance Sheets:


	June 30, 2021	June 30, 2020
	(In thousands)
Deferred income tax assets	5,295	5,988
Deferred income tax liabilities	(34)	(61)
Net deferred tax asset	5,261	$	5,927

Summary of Operating Loss Carryforwards


Operating Loss Carryforwards	Expiration Period	Amount (in thousands)
State net operating losses	June 2025 to indefinite	$	57,786
Foreign net operating losses	June 2029 to June 2041	$	33,242

Summary of Tax Credit Carryforwards


Tax Credit Carryforwards	Expiration Period	Amount (in thousands)
State tax credits	June 2033 to indefinite	$	578
Federal tax credits	June 2041	$	1,087
Federal foreign tax credits	June 2023 to June 2025	$	655
Foreign tax credits	June 2035 to June 2041	$	687