INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2018

The following is a geographical breakdown of income before the provision for income taxes (in thousands):

Our provision (benefit) for income taxes consists of the following (in thousands):

A summary of activity of unrecognized tax benefits for fiscal 2017 and 2018 is as follows (in thousands).

Balance as July 1, 2016	$	9,754
Additions on tax positions for the current year		594
Additions on tax positions from prior years		1,445
Reduction in tax positions from prior year		(598	)

Balance at June 30, 2017	$	11,195
Additions on tax positions for the current year		294
Additions on tax positions from prior years		14
Reduction in tax positions from prior year		(1,005	)

Balance at June 30, 2018	$	10,498

Deferred income tax assets (liabilities) consisted of the following (in thousands):

	June 30,
	2017			2018
Deferred income tax assets:
Tax credit carryforwards	$	19,005		$	17,591
Net operating loss carryforwards		37,689			10,473
Customer advances		4,028			2,360
Allowance for doubtful accounts		5,839			4,336
Inventory reserve		15,933			11,735
Inventory capitalization		3,977			3,043
Accrued liabilities		11,511			9,174
Stock and deferred compensation		24,211			15,779
Other assets		3,001			3,641

Total deferred income tax assets		125,194			78,132
Valuation allowance		(19,997	)		(27,007	)

Net deferred income tax assets		105,197			51,125

Deferred income tax liabilities:
Depreciation		(21,228	)		(6,322	)
State income taxes		(655	)		(130	)
Amortization of intangible assets		(48,966	)		(31,993	)
Withholding tax on unrepatriated foreign earnings		—			(5,114	)
State transition tax		—			(1,754	)
Convertible debt		(17,019	)		(9,198	)
Prepaid expenses		(2,983	)		(8,680	)
Other liabilities		(130	)		(329	)

Total deferred income tax liabilities		(90,981	)		(63,520	)

Net deferred tax asset (liability)	$	14,216		$	(12,395	)

The components of the net deferred income tax asset are classified in the consolidated balance sheets as follows (in thousands):

	2017			2018
Long term deferred income tax asset, included in other assets		34,897			2,607
Long term deferred income tax liability		(20,681	)		(15,002	)

Net deferred income tax asset (liability)	$	14,216		$	(12,395	)

The components of current taxes receivable and payable and prepaid taxes are classified in the consolidated balance sheets as follows (in thousands):

	2017			2018
Current taxes receivable and prepaid taxes, included in prepaid expenses and other current assets		12,100			5,172
Current taxes payable, included in other accrued expenses and current liabilities		(6,454	)		(8,314	)

Net tax receivable (payable)	$	5,646		$	(3,142	)

	June 30,
	2016			2017			2018
Provision for income taxes at federal statutory rate		35.0	%		35.0	%		28.1	%
Research and development tax credits		(1.8	)		(2.5	)		(1.4	)
Foreign income subject to tax at other than federal statutory rate		(8.9	)		(20.0	)		(4.8	)
Stock compensation excess tax benefit		—			(9.5	)		(8.8	)
Change in valuation allowance		5.8			10.4			19.6
Unrecognized tax benefit		(5.0	)		(1.4	)		(6.8	)
Meals and entertainment		0.9			1.8			1.5
Tax on foreign currency gains and losses		2.3			9.1			(0.1	)
Transaction costs		2.3			1.5			0.1
State tax expense		(0.3	)		(1.5	)		(1.3	)
U.S. tax on foreign earnings		4.5			0.4			2.5
Fringe benefits		0.9			1.5			1.1
Non-taxable gain from sale of business		—			(3.6	)		—
Non-taxable earnings from acquisitions		(7.9	)		(1.8	)		(1.1	)
Mexico imputed income or expense		(0.4	)		(2.0	)		(3.5	)
Remeasurement of U.S. net deferred tax assets from 35% to 21%		—			—			16.0
Deemed repatriation of non-U.S. earnings		—			—			102.2
Withholding tax on deemed repatriation foreign earnings		—			—			35.8
Other		(1.1	)		0.7			(0.1	)

Effective income tax rate		26.3	%		18.1	%		179.0	%