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INCOME TAXES (Tables) | 12 Months Ended
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Jun. 30, 2019
INCOME TAXES |
Schedule of geographical breakdown of income before the provision for income taxes | The following is a geographical breakdown of income before the provision for income taxes (in thousands):
|  | 2017 |  | 2018 |  | 2019
Pre-tax income (loss): |  |  |  |  |  |  |  |  |
United States |  | $ | (39,686) |  | $ | (40,335) |  | $ | 6,575
Foreign |  |  | 65,437 |  |  | 77,189 |  |  | 79,589
Total pre-tax income |  | $ | 25,751 |  | $ | 36,854 |  | $ | 86,164
Schedule of provision (benefit) for income taxes | Our provision (benefit) for income taxes consists of the following (in thousands):
|  | 2017 |  | 2018 |  | 2019
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 788 |  | $ | 8,518 |  | $ | 541
State |  |  | 493 |  |  | 707 |  |  | 883
Foreign |  |  | 27,616 |  |  | 30,643 |  |  | 28,480
Total current provision |  |  | 28,897 |  |  | 39,868 |  |  | 29,904
Deferred: |  |  |  |  |  |  |  |  |
Federal |  | $ | (16,314) |  | $ | 35,957 |  | $ | (1,697)
State |  |  | (484) |  |  | 338 |  |  | 1,214
Foreign |  |  | (7,424) |  |  | (10,182) |  |  | (8,053)
Total deferred provision (benefit) |  |  | (24,222) |  |  | 26,113 |  |  | (8,536)
Total provision |  | $ | 4,675 |  | $ | 65,981 |  | $ | 21,368
Summary of activity of unrecognized tax benefits | A summary of activity of unrecognized tax benefits for fiscal 2018 and 2019 is as follows (in thousands).
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
Additions on tax positions for the current year |  |  | 940
Additions on tax positions from prior years |  |  | 346
Reduction in tax positions from prior year |  |  | (398)
Balance at June 30, 2019 |  | $ | 11,386
Schedule of deferred income tax assets (liabilities) | Deferred income tax assets (liabilities) consisted of the following (in thousands):
|  | June 30,
|  | 2018 |  | 2019
Deferred income tax assets: |  |  |  |  |  |
Tax credit carryforwards |  | $ | 17,591 |  | $ | 14,785
Net operating loss carryforwards |  |  | 10,473 |  |  | 9,331
Customer advances |  |  | 2,360 |  |  | 3,365
Allowance for doubtful accounts |  |  | 4,336 |  |  | 4,287
Inventory reserve |  |  | 11,735 |  |  | 11,503
Inventory capitalization |  |  | 3,043 |  |  | 2,721
Accrued liabilities |  |  | 9,174 |  |  | 5,953
Stock and deferred compensation |  |  | 15,779 |  |  | 12,737
Other assets |  |  | 3,641 |  |  | 3,157
Total deferred income tax assets |  |  | 78,132 |  |  | 67,839
Valuation allowance |  |  | (27,007) |  |  | (23,377)
Net deferred income tax assets |  |  | 51,125 |  |  | 44,462
Deferred income tax liabilities: |  |  |  |  |  |
Depreciation |  |  | (6,322) |  |  | (4,866)
Amortization of intangible assets |  |  | (31,993) |  |  | (26,056)
Withholding tax on unrepatriated foreign earnings |  |  | (5,114) |  |  | (5,114)
State transition tax |  |  | (1,754) |  |  | (1,754)
Convertible debt |  |  | (9,198) |  |  | (6,443)
Prepaid expenses |  |  | (8,680) |  |  | (3,903)
Other liabilities |  |  | (459) |  |  | (308)
Total deferred income tax liabilities |  |  | (63,520) |  |  | (48,444)
Net deferred income tax liability |  | $ | (12,395) |  | $ | (3,982)
Schedule of components of net deferred income tax asset | The components of the net deferred income tax asset are classified in the consolidated balance sheets as follows (in thousands):
|  | 2018 |  | 2019
Long term deferred income tax asset, included in other assets |  |  | 2,607 |  |  | 3,997
Long term deferred income tax liability |  |  | (15,002) |  |  | (7,979)
Net deferred income tax liability |  | $ | (12,395) |  | $ | (3,982)
Schedule of components of current taxes receivable and payable and prepaid taxes | The components of current taxes receivable and payable and prepaid taxes are classified in the consolidated balance sheets as follows (in thousands):
|  | 2018 |  | 2019
Current taxes receivable and prepaid taxes, included in prepaid expenses and other current assets |  | $ | 5,172 |  | $ | 4,344
Current taxes payable, included in other accrued expenses and current liabilities |  |  | (8,314) |  |  | (3,094)
Net tax receivable (payable) |  | $ | (3,142) |  | $ | 1,250
Schedule of consolidated effective income tax rate differs from the federal statutory income tax rate |
|  | June 30, |
|  | 2017 |  | 2018 |  | 2019 |
Provision for income taxes at federal statutory rate |  | 35.0 | % | 28.1 | % | 21.0 | %
Research and development tax credits |  | (2.5) |  | (1.4) |  | (1.6) |
Foreign income subject to tax at other than federal statutory rate |  | (20.0) |  | (4.8) |  | 2.9 |
Stock compensation excess tax benefit |  | (9.5) |  | (8.8) |  | (3.2) |
Officers’ compensation |  | — |  | — |  | 3.5 |
Change in valuation allowance |  | 10.4 |  | 19.6 |  | (1.8) |
Unrecognized tax (benefit) expense |  | (1.4) |  | (6.8) |  | 0.1 |
Meals and entertainment |  | 1.8 |  | 1.5 |  | 0.4 |
Tax on foreign currency gains and losses |  | 9.1 |  | (0.1) |  | 0.2 |
State tax expense |  | (1.5) |  | (1.3) |  | 1.6 |
U.S. tax on foreign earnings |  | 0.4 |  | 2.5 |  | 1.0 |
Non-taxable gain from sale of business |  | (3.6) |  | — |  | — |
Mexico imputed income or expense |  | (2.0) |  | (3.5) |  | (0.5) |
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 |  | 1.9 |  | — |  | 1.2 |
Effective income tax rate |  | 18.1 | % | 179.0 | % | 24.8 | %

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