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INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2021

Summary of Components of Income Before Taxes and Equity in Earnings of Equity-Method Investments

The components of income (loss) from continuing operations before income taxes and equity in net loss (income) of equity-method investees were as follows:


	Fiscal Year Ended June 30,
	2021		2020		2019
Domestic	$	60,215	$	(29,339)	$	(120,969)
Foreign	48,578		63,167		64,965
Total	$	108,793	$	33,828	$	(56,004)

Summary of the Provision for Income Taxes

The provision (benefit) for income taxes consisted of the following:


	Fiscal Year Ended June 30,
	2021		2020		2019
Current:
Federal	$	2,243	$	(44,595)	$	3,639
State and local	1,735		619		760
Foreign	27,253		14,021		16,075
	31,231		(29,955)		20,474
Deferred:
Federal	14,266		33,007		(21,538)
State and local	(10,064)		3,414		1,188
Foreign	5,660		(261)		(3,356)
	9,862		36,160		(23,706)
Total	$	41,093	$	6,205	$	(3,232)

Reconciliation of Expected Income Taxes to Actual

The reconciliation of the U.S. federal statutory rate to our effective rate on income before provision (benefit) for income taxes was as follows:


	Fiscal Year Ended June 30,
	2021		%		2020		%		2019		%
Expected United States federal income tax at statutory rate	$	22,847	21.0	%	$	7,104	21.0	%	$	(11,761)	21.0	%
State income taxes, net of federal (benefit) provision	1,150		1.1	%	(668)		(1.9)	%	(8,922)		15.9	%

Foreign income at different rates	4,756		4.4	%	382		1.1	%	763		(1.4)	%
Impairment of intangible assets	13,466		12.4	%	—		—	%	—		—	%
Change in valuation allowance (a)	(5,921)		(5.4)	%	4,499		13.3	%	8,938		(16.0)	%

Change in reserves for uncertain tax positions	1,971		1.8	%	7,925		23.4	%	841		(1.5)	%
Change in foreign tax rate (b)	1,840		1.7	%	—		—	%	—		—	%
Loss on disposal of subsidiary	1,073		1.0	%	—		—	%	—		—	%
Tax Act’s transition tax (c)	—		—	%	—				6,834		(12.2)	%

U.S. tax (benefit) on foreign earnings	(50)		(0.1)	%	7,449		22.0	%	3,872		(6.9)	%

CARES Act (d)	(1,116)		(1.0)	%	(25,668)		(75.9)	%	—		—	%
Other	1,077		1.0	%	5,182		15.3	%	(3,797)		6.9	%
Provision (benefit) for income taxes	$	41,093	37.8	%	$	6,205	18.3	%	$	(3,232)	5.8	%

(a) The Company estimates that it will utilize certain of its state tax loss carryovers in the year ended June 30, 2021. This positive evidence, in addition to other positive evidence, resulted in the Company releasing the valuation allowance on its state deferred assets of $9,774. Further, there was a release of a valuation allowance of $1,600 related to Danival; an increase in the valuation allowance of $5,051 related to the UK rate change; and a valuation allowance increase of $402 related to capital leases.

(b) On July 22, 2020, the U.K. enacted into law a tax rate increase from 17% to 19%. On June 10, 2021, the U.K. enacted an increase in the corporate income tax rate to 25% effective April 1, 2023. The rate change impact is primarily for the re-measurement of deferred tax liabilities on indefinite lived intangible assets.

(c) On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") included a provision to tax previously untaxed foreign earnings (“transition tax”). During fiscal year 2019, the Company recorded $6,834 of tax expense upon finalizing its analysis of the impact from the Tax Act.

(d) The Company carried back NOLs generated in the June 30, 2019 tax year for five years, resulting in an income tax benefit of $18,949. The $18,949 income tax benefit represents the federal rate differential between 35% and 21%. In addition, there was an indirect tax benefit of $6,719 related to discontinued operations due to the CARES Act. Accordingly, the gross benefit recorded under the CARES Act in fiscal 2020 was $25,668 prior to the reserve under ASC 740-10. In fiscal 2021, the Company received the full refund with interest, with the net adjustment resulting in a benefit of $1,116.

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consisted of the following:


	June 30, 2021		June 30, 2020
Noncurrent deferred tax assets (liabilities):
Basis difference on inventory	$	6,213	$	6,724
Reserves not currently deductible	15,261		21,173
Basis difference on intangible assets	(70,482)		(76,746)
Basis difference on property and equipment	(11,643)		(2,627)
Other comprehensive income	2,792		1,737
Net operating loss and tax credit carryforwards	43,960		34,393
Stock-based compensation	1,797		1,417
Unremitted earnings of foreign subsidiaries	(1,172)		(1,212)
Lease liability	14,165		14,096
Lease ROU assets	(12,971)		(12,807)
Other	7,048		4,006
Valuation allowances	(37,453)		(41,941)
Noncurrent deferred tax liabilities, net(1)	$	(42,485)	$	(51,787)

(1) Includes $154 and $62 of non-current deferred tax assets included within Other Assets on the June 30, 2021 and 2020 Consolidated Balance Sheets, respectively.

Summary of Changes in Valuation Allowances

The changes in valuation allowances against deferred income tax assets were as follows:


	Fiscal Year Ended June 30,
	2021		2020
Balance at beginning of year	$	41,941	$	34,912
Additions charged to income tax expense	5,601		7,391
Reductions credited to income tax expense	(11,520)		35
Currency translation adjustments	1,431		(397)
Balance at end of year	$	37,453	$	41,941

Schedule of Unrecognized Tax Benefits, Including Interest and Penalties Activity

Unrecognized tax benefits activity, including interest and penalties, is summarized below:


	Fiscal Year Ended June 30,
	2021		2020		2019
Balance at beginning of year	$	20,899	$	11,869	$	6,730
Additions based on tax positions related to the current year	343		636		248
Additions based on tax positions related to prior years	3,045		8,499		5,446
Reductions due to lapse in statute of limitations and settlements	(1,417)		(105)		(555)
Balance at end of year	$	22,870	$	20,899	$	11,869