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Income Taxes (Tables) | 12 Months Ended
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Jun. 30, 2019
Income Taxes |
Schedule of deferred tax assets and liabilities |
|  | June 30,
|  | 2019 |  | 2018
|  | (In thousands)
Deferred tax assets |  |  |  |  |  |
Net operating loss carryforward |  | $ | 4,923 |  | $ | 5,047
Reserves |  |  | 4,769 |  |  | 4,618
Accrued expenses |  |  | 3,492 |  |  | 3,156
Stock compensation expense |  |  | 5,992 |  |  | 8,293
Other assets |  |  | 1,524 |  |  | 1,289
Deferred rent |  |  | 1,056 |  |  | 1,502
Deferred revenue |  |  | 461 |  |  | 673
Federal tax credits |  |  | 20 |  |  | 20
State tax credits |  |  | 363 |  |  | 431
Total deferred tax assets |  |  | 22,600 |  |  | 25,029
Deferred tax liabilities |  |  |  |  |  |
Capitalized curriculum development |  |  | (10,143) |  |  | (9,890)
Capitalized software and website development costs |  |  | (12,659) |  |  | (13,734)
Property and equipment |  |  | (5,166) |  |  | (2,573)
Returned materials |  |  | (2,643) |  |  | (2,452)
Purchased intangibles |  |  | (4,110) |  |  | (4,498)
Total deferred tax liabilities |  |  | (34,721) |  |  | (33,147)
Net deferred tax liability before valuation allowance |  |  | (12,121) |  |  | (8,118)
Valuation allowance |  |  | (4,549) |  |  | (4,459)
Net deferred tax liability |  | $ | (16,670) |  | $ | (12,577)
Reported as: |  |  |  |  |  |
Long-term deferred tax liabilities |  | $ | (16,670) |  | $ | (12,577)
Schedule of related components of the income tax expense |
|  | Year Ended June 30,
|  | 2019 |  | 2018 |  | 2017
|  | (In thousands)
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,919 |  | $ | 887 |  | $ | 8,756
State |  |  | 1,988 |  |  | 774 |  |  | 3,153
Foreign |  |  | 920 |  |  | 1,444 |  |  | 552
Total current |  |  | 6,827 |  |  | 3,105 |  |  | 12,461
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 3,412 |  |  | (4,769) |  |  | (6,505)
State |  |  | 281 |  |  | 754 |  |  | (560)
Total deferred |  |  | 3,693 |  |  | (4,015) |  |  | (7,065)
Total income tax expense (benefit) |  | $ | 10,520 |  | $ | (910) |  | $ | 5,396
Schedule of reconciliation of provision for income taxes to the income tax from applying the statutory rate |
|  | Year Ended June 30, |
|  | 2019 |  | 2018 |  | 2017 |
U.S. federal tax at statutory rates (1) |  | 21.0 | % | 28.0 | % | 35.0 | %
Permanent items |  | 2.1 |  | 0.9 |  | 7.1 |
Lobbying |  | 0.4 |  | 1.2 |  | 7.2 |
State taxes, net of federal benefit |  | 4.3 |  | 3.1 |  | 19.5 |
Research and development tax credits |  | (0.5) |  | - |  | (8.2) |
Domestic production activities deduction |  | - |  | (0.1) |  | (22.9) |
Change in valuation allowance |  | 0.2 |  | (7.2) |  | 53.3 |
Effects of foreign operations |  | 0.1 |  | - |  | 2.6 |
Reserve for unrecognized tax benefits |  | (2.1) |  | 0.9 |  | 3.3 |
Noncontrolling interests |  | - |  | 0.4 |  | 12.5 |
Other |  | (0.4) |  | (3.9) |  | (0.1) |
Impact of federal tax rate reduction |  | - |  | (25.4) |  | - |
Repatriation transition tax |  | - |  | 6.4 |  | - |
Stock-based compensation |  | (3.1) |  | (7.7) |  | - |
Provision (benefit) for income taxes |  | 22.0 | % | (3.4) | % | 109.3 | %
| (1) |  | The corporate tax rate was lowered from 35% to 21%, effective as of January 1, 2018. Under IRC §15 which governs rate changes, fiscal year taxpayers are subject to a “blended” tax rate for tax years that include January 1, 2018. Using the weighted average calculation, the company’s blended federal tax rate for the year ended June 30, 2018 is 28%.
Schedule of adjusted research and development credit carryforward |
|  | Year Ended June 30,
|  | 2019 |  | 2018 |  | 2017
|  | (In thousands)
Balance at beginning of the year |  | $ | 2,392 |  | $ | 2,260 |  | $ | 2,224
Additions for prior year tax positions |  |  | 194 |  |  | 585 |  |  | 951
Additions for current year tax positions |  |  | 87 |  |  | 8 |  |  | 241
Reductions for prior year tax positions |  |  | (1,128) |  |  | (461) |  |  | (1,156)
Balance at end of the year |  | $ | 1,545 |  | $ | 2,392 |  | $ | 2,260

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