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Income Taxes | 12 Months Ended
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Jun. 30, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 11. INCOME TAXES The components of (loss) income before income taxes and equity in net loss of equity-method investees were as follows:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Domestic |  | $ | (148,014 | ) |  | $ | (183,601 | ) |  | $ | 24,541 |
Foreign |  |  | 67,733 |  |  |  | 54,020 |  |  |  | 78,950 |
Total |  | $ | (80,281 | ) |  | $ | (129,581 | ) |  | $ | 103,491 |
The (benefit) provision for income taxes consisted of the following:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (55 | ) |  | $ | 3,103 |  |  | $ | (197 | )
State and local |  |  | 616 |  |  |  | 953 |  |  |  | 179 |
Foreign |  |  | 14,980 |  |  |  | 7,719 |  |  |  | 13,714 |
|  |  | 15,541 |  |  |  | 11,775 |  |  |  | 13,696 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (23,403 | ) |  |  | (23,551 | ) |  |  | 6,237 |
State and local |  |  | (2,386 | ) |  |  | 271 |  |  |  | (463 | )
Foreign |  |  | 2,428 |  |  |  | (2,673 | ) |  |  | 3,246 |
|  |  | (23,361 | ) |  |  | (25,953 | ) |  |  | 9,020 |
Total |  | $ | (7,820 | ) |  | $ | (14,178 | ) |  | $ | 22,716 |
Cash paid for income taxes, net of refunds, during the fiscal years ended June 30, 2024 and June 30, 2023 amounted to $10,303 and $14,765, respectively. The reconciliation of the U.S. federal statutory rate to the Company’s effective rate on (loss) income before (benefit) provision for income taxes is as follows:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | % |  |  | 2023 |  |  | % |  |  | 2022 |  |  | % |
Expected United States federal income tax at statutory rate |  | $ | (16,857 | ) |  |  | 21.0 | % |  | $ | (27,233 | ) |  |  | 21.0 | % |  | $ | 21,733 |  |  |  | 21.0 | %
State income taxes, net of federal (benefit) provision |  |  | (5,060 | ) |  |  | 6.3 | % |  |  | (4,866 | ) |  |  | 3.8 | % |  |  | 1,227 |  |  |  | 1.2 | %
U.S. tax on foreign earnings |  |  | 266 |  |  |  | (0.3 | )% |  |  | 1,946 |  |  |  | (1.5 | )% |  |  | 2,404 |  |  |  | 2.3 | %
Foreign income at different rates |  |  | (313 | ) |  |  | 0.3 | % |  |  | (905 | ) |  |  | 0.7 | % |  |  | (576 | ) |  |  | (0.6 | )%
Change in valuation allowance(a) |  |  | 15,075 |  |  |  | (18.8 | )% |  |  | 14,935 |  |  |  | (11.5 | )% |  |  | (220 | ) |  |  | (0.2 | )%
Change in reserves for uncertain tax positions |  |  | 2,044 |  |  |  | (2.5 | )% |  |  | 637 |  |  |  | (0.5 | )% |  |  | (997 | ) |  |  | (1.0 | )%
Change in foreign tax rate |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | % |  |  | (341 | ) |  |  | (0.3 | )%
Loss on disposal of subsidiary |  |  | (1,116 | ) |  |  | 1.4 | % |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
Stock-based compensation |  | 945 |  |  |  | (1.2 | )% |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
Return to provision |  |  | (4,274 | ) |  |  | 5.3 | % |  |  | — |  |  |  | — | % |  |  | — |  |  |  | — | %
Other |  |  | 1,470 |  |  |  | (1.8 | )% |  |  | 1,308 |  |  |  | (1.1 | )% |  |  | (514 | ) |  |  | (0.4 | )%
(Benefit) provision for income taxes |  | $ | (7,820 | ) |  |  | 9.7 | % |  | $ | (14,178 | ) |  |  | 10.9 | % |  | $ | 22,716 |  |  |  | 22.0 | %
(a) The Company estimated that it would not be able to utilize certain of its federal tax credit, federal tax losses and state tax loss carryovers due to its history of pretax losses and inability to carry back tax losses or credits for refunds. This negative evidence resulted in the Company increasing the valuation allowance on worldwide deferred tax assets in the year ended June 30, 2024 by $15,075, and in the year ended June 30, 2023 by $14,935. U.S. federal tax regulations include a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries and a measure to tax certain intercompany payments under the base erosion anti-abuse tax (“BEAT”) regime. For the fiscal years ended June 30, 2024, 2023 and 2022, the Company did not generate intercompany transactions that met the BEAT threshold but does have to include GILTI tax relating to the Company’s foreign subsidiaries. The Company elected to account for GILTI tax as a current period cost and recorded expense of $381 during the fiscal year ended June 30, 2024. The GILTI tax expense is included in the U.S. tax benefit on foreign earnings in the effective tax rate which also includes tax expense related to Subpart F income and unremitted earnings in total. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred tax assets and liabilities consisted of the following:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Noncurrent deferred tax assets (liabilities): |  |  |  |  |  |
Basis difference on inventory |  | $ | 4,884 |  |  | $ | 5,130 |
Reserves not currently deductible |  |  | 8,386 |  |  |  | 11,045 |
Basis difference on intangible assets |  |  | (62,549 | ) |  |  | (73,635 | )
Basis difference on property and equipment |  |  | (14,946 | ) |  |  | (20,255 | )
Other comprehensive income |  |  | (2,887 | ) |  |  | (3,498 | )
Net operating loss and tax credit carryforwards |  |  | 67,186 |  |  |  | 50,807 |
Stock-based compensation |  |  | 1,591 |  |  |  | 1,937 |
Unremitted earnings of foreign subsidiaries |  |  | (1,873 | ) |  |  | (1,989 | )
Operating lease liability |  |  | 18,615 |  |  |  | 20,203 |
Lease ROU assets |  |  | (17,309 | ) |  |  | (19,113 | )
Other |  |  | 18,702 |  |  |  | 9,833 |
Valuation allowances |  |  | (67,626 | ) |  |  | (52,551 | )
Noncurrent deferred tax liabilities, net |  | $ | (47,826 | ) |  | $ | (72,086 | )
At June 30, 2024 and 2023, the Company had U.S. federal NOL carryforwards of approximately $67,138 and $63,559, respectively, certain of which will not expire until 2033. Certain of these federal loss carryforwards are subject to Internal Revenue Code Section 382, which imposes limitations on utilization following certain changes in ownership of the entity generating the loss carryforward. The Company had foreign NOL carryforwards of approximately $9,035 and $11,351 at June 30, 2024 and 2023, respectively, the majority of which are indefinite lived. For the year ended June 30, 2024, the Company determined that $202,500 of foreign earnings are not permanently reinvested with a corresponding deferred tax liability of $1,873. The Company continues to rein vest $767,735 o f undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S. state income taxes if it reverses its indefinite reinvestment assertion on these foreign earnings in the future. All other outside basis differences not related to earnings were impractical to account for at this period of time and are currently considered as being permanent in duration. As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance. The Company recorded valuation allowances in the amounts of $67,626 and $52,551 at June 30, 2024 and 2023, respectively. The changes in valuation allowances against deferred income tax assets were as follows:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Balance at beginning of year |  | $ | 52,551 |  |  | $ | 36,891 |
Additions charged to income tax expense |  |  | 18,998 |  |  |  | 23,212 |
Reductions credited to income tax expense |  |  | (3,858 | ) |  |  | (8,514 | )
THWR purchase accounting |  |  | — |  |  |  | 291 |
Currency translation adjustments |  |  | (65 | ) |  |  | 671 |
Balance at end of year |  | $ | 67,626 |  |  | $ | 52,551 |
Unrecognized tax benefits activity, including interest and penalties, is summarized below:
|  | Fiscal Year Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Balance at beginning of year |  | $ | 23,967 |  |  | $ | 21,901 |  |  | $ | 22,870 |
Additions based on tax positions related to the current year |  |  | 1,906 |  |  |  | 1,519 |  |  |  | 273 |
Additions based on tax positions related to prior years |  |  | 187 |  |  |  | 815 |  |  |  | 304 |
Reductions due to lapse in statute of limitations and settlements |  |  | — |  |  |  | (268 | ) |  |  | (1,546 | )
Balance at end of year |  | $ | 26,060 |  |  | $ | 23,967 |  |  | $ | 21,901 |
As of June 30, 2024, the Company had $26,060 of unrecognized tax benefits, of which $22,249 represents an amount that, if recognized, would impact the effective tax rate in future periods. As of June 30, 2023, the Company had $23,967 of unrecognized tax benefits, of which $20,155 represents the amount that, if recognized, would impact the effective tax rate in future periods. As of June 30, 2022, the Company had $21,901 of unrecognized tax benefits of which $18,089 would impact the effective income tax rate in future periods. Accrued liabilities for interest and penalties were $4,921 and $3,768 at June 30, 2024 and 2023, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and several foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to fiscal 2014. However, to the extent the Company generated NOLs or tax credits in closed tax years, future use of the NOL or tax credit carryforward balance would be subject to examination within the relevant statute of limitations for the year in which utilized. The Company is no longer subject to tax examinations in the U.K. for years prior to fiscal 2021. Given the uncertainty regarding when tax authorities will complete their examinations and the possible outcomes of their examinations, a current estimate of the range of reasonably possible significant increases or decreases of income tax that may occur within the next twelve months cannot be made. Although there are various tax audits currently ongoing, the Company does not believe the ultimate outcome of such audits will have a material impact on the Company’s consolidated financial statements.

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