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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2020

Income tax expense (benefit) consists of:


	Fiscal Year Ended June 30,
	2020		2019		2018
	(in thousands)
Current:
Federal	$	13,892	$	18,223	$	38,476
State	3,244		4,459		3,504
Foreign	1,188		(2,342)		7,481
Total current	18,324		20,340		49,461
Deferred:
Federal	(8,526)		(4,913)		(10,336)
State	(2,667)		(945)		(2,025)
Foreign	320		4,296		(9,507)
Total deferred	(10,873)		(1,562)		(21,868)
Provision for income taxes	$	7,451	$	18,778	$	27,593

Reconciliation of U.S.Federal Income Tax Expense

A reconciliation is provided below of the U.S. Federal income tax expense at a statutory rate of 21% for the fiscal years ended June 30, 2020 and 2019 and a blended statutory rate of 28% for the fiscal year ended June 30, 2018 to actual income tax expense. Since the Company has a June 30th fiscal year-end, the lower tax rate resulted in a blended U.S. statutory federal rate of approximately 28% for the fiscal year ended June 30, 2018.


	Fiscal Year Ended June 30,
	2020			2019			2018
	(in thousands)
U.S. statutory rate	21.0		%	21.0		%	28.0		%
U.S. Federal income tax at statutory rate	$	(15,073)		$	17,564		$	17,690
Increase (decrease) in income taxes due to:
State and local income taxes, net of Federal benefit	1,316			2,864			1,968
Tax credits	(1,419)			(1,324)			(1,825)
Valuation allowance	1,699			57			1,304
Effect of varying statutory rates in foreign operations, net	1,374			1,938			320
Stock compensation	41			35			1,049
Capitalized acquisition costs	59			69			48
Disallowed interest	1,639			1,600			1,664
Earnings from foreign subsidiaries	1,661			50			120
Net favorable recovery	(6,517)			(3,112)			—
Global intangible low taxed income (GILTI) tax	(128)			365			—
Non-deductible goodwill impairment	20,180			—			—
Nontaxable income	—			(822)			—
U.S. Tax Reform transition tax	—			(827)			9,609
U.S. Tax Reform impact of rate change on deferred taxes	—			—			(2,701)

Other jurisdictions impact of rate change on deferred taxes	—			(20)			—
Other	2,619			341			(1,653)
Provision for income taxes	$	7,451		$	18,778		$	27,593

Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:


	June 30,
	2020		2019
	(in thousands)
Deferred tax assets derived from:
Allowance for accounts receivable	$	6,466	$	7,387
Inventories	3,226		3,255
Nondeductible accrued expenses	11,109		9,054
Net operating loss carryforwards	3,083		73
Tax credits	6,734		6,046
Timing of amortization deduction from goodwill	12,516		6,406
Deferred compensation	7,247		6,396
Stock compensation	3,034		3,034
Timing of amortization deduction from intangible assets	4,145		3,110
Total deferred tax assets	57,560		44,761
Valuation allowance	(9,195)		(4,447)
Total deferred tax assets, net of allowance	48,365		40,314
Deferred tax liabilities derived from:

Timing of depreciation and other deductions from building and equipment	(3,347)		(6,618)
Timing of amortization deduction from goodwill	(7,390)		(3,742)
Timing of amortization deduction from intangible assets	(16,882)		(14,507)
Total deferred tax liabilities	(27,619)		(24,867)
Net deferred tax assets	$	20,746	$	15,447

Components of Pretax Earnings

The components of pretax earnings are as follows:


	Fiscal Year Ended June 30,
	2020		2019		2018
	(in thousands)
Domestic	$	(83,517)	$	68,675	$	63,185
Foreign	11,741		14,962		(136)
Worldwide pretax earnings	$	(71,776)	$	83,637	$	63,049

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	June 30,
	2020		2019		2018
	(in thousands)
Beginning Balance	$	1,234	$	1,703	$	1,826
Additions based on tax positions related to the current year	137		69		157
Additions for tax positions of prior years	—		—		—
Reduction for tax positions of prior years	(215)		(538)		(280)
Ending Balance	$	1,156	$	1,234	$	1,703