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Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 13 – INCOME TAXES

The significant components of income tax expense are as follows:

 

Year ended June 30,

 

(In thousands)

2025

 

 

2024

 

Current:

 

 

 

 

 

Federal

$

1,930

 

 

$

1,265

 

State

 

944

 

 

 

341

 

Foreign

 

1,460

 

 

 

2,052

 

Total current

 

4,334

 

 

 

3,658

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

Federal

 

(244

)

 

 

(1,629

)

State

 

(165

)

 

 

(707

)

Foreign

 

(160

)

 

 

201

 

Total deferred

 

(569

)

 

 

(2,135

)

 

 

 

 

 

 

Income tax expense

$

3,765

 

 

$

1,523

 

The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense:

 

Year ended June 30,

 

(In thousands)

2025

 

 

2024

 

Income tax expense at U.S. statutory rate (21%)

$

4,453

 

 

$

2,041

 

State income taxes, net of federal benefit

 

616

 

 

 

(290

)

Foreign tax rate differential

 

143

 

 

 

404

 

Permanent differences

 

474

 

 

 

274

 

Share-based compensation

 

(358

)

 

 

(42

)

GILTI & FDII

 

(222

)

 

 

(161

)

Minority interest from partnership

 

(31

)

 

 

(107

)

Loss on subsidiary

 

(1,100

)

 

 

—

 

Amended tax return impact

 

—

 

 

 

(377

)

Return to provision true-ups

 

(12

)

 

 

(179

)

Other, net

 

(198

)

 

 

(40

)

 

 

 

 

 

 

Income tax expense

$

3,765

 

 

$

1,523

 

The Company’s effective tax rate for the year ended June 30, 2025 is lower than the U.S. federal statutory rate primarily due to tax benefits resulting from a loss on subsidiary and share-based compensation. The Company’s effective tax rate for the fiscal year ended June 30, 2024 is lower than the U.S. federal statutory rate primarily due to an amendment of a prior year return resulting in a refund.

Significant components of deferred tax assets and liabilities are as follows:

 

June 30,

 

(In thousands)

2025

 

 

2024

 

Deferred tax assets (liabilities):

 

 

 

 

 

Allowance for credit losses

$

449

 

 

$

437

 

Accruals

 

1,283

 

 

 

1,075

 

Share-based compensation

 

905

 

 

 

1,664

 

Operating lease liabilities

 

15,904

 

 

 

14,376

 

Operating lease ROU asset

 

(14,158

)

 

 

(12,685

)

Property, technology, and equipment basis differences

 

(1,581

)

 

 

(2,368

)

Goodwill deductible for tax purposes

 

(7,106

)

 

 

(4,419

)

Intangible assets

 

3,427

 

 

 

2,010

 

Other, net

 

(905

)

 

 

(902

)

 

 

 

 

 

 

Net deferred tax liabilities

$

(1,782

)

 

$

(812

)

The Company and its wholly-owned U.S. subsidiaries file a consolidated Federal income tax return. The Company also files unitary or separate returns in various state, local and non-U.S. jurisdictions based on state, local and non-U.S. filing requirements. Tax years that remain subject to examination by the IRS are the fiscal years ended June 30, 2022 through June 30, 2025. Tax years that remain subject to examination by state authorities are the fiscal years ended June 30, 2021 through June 30, 2025. Tax years that remain subject to examination by non-U.S. authorities are the periods ended December 31, 2019 through June 30, 2025. Acquired entities may have tax years that differ from the Company and are still open under the relevant statute of limitations and therefore are subject to potential adjustment. The Company does not have any material uncertain tax positions.