NOTE 10 – PROVISION FOR INCOME TAXES
|
(In thousands) |
June 30, |
|
|||||
|
|
2017 |
|
|
2016 |
|
||
|
Deferred tax assets (liabilities): |
|
|
|
|
|
|
|
|
Allowance for doubtful accounts |
$ |
594 |
|
|
$ |
654 |
|
|
Accruals |
|
840 |
|
|
|
878 |
|
|
Share-based compensation |
|
1,181 |
|
|
|
919 |
|
|
Technology and equipment basis differences |
|
(3,436 |
) |
|
|
(3,095 |
) |
|
Goodwill deductible for tax purposes |
|
(367 |
) |
|
|
(101 |
) |
|
Intangibles |
|
(12,192 |
) |
|
|
(15,307 |
) |
|
Deferred rent |
|
162 |
|
|
|
346 |
|
|
Net operating loss carry-forward |
|
1,691 |
|
|
|
2,860 |
|
|
Other, net |
|
701 |
|
|
|
321 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(10,826 |
) |
|
$ |
(12,525 |
) |
Income tax expense (benefit) attributable to operations is as follows:
|
(In thousands) |
Year ended June 30, |
|
|||||||||
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
$ |
4,299 |
|
|
$ |
1,002 |
|
|
$ |
3,445 |
|
|
State |
|
879 |
|
|
|
176 |
|
|
|
321 |
|
|
Foreign |
|
202 |
|
|
|
8 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
(1,876 |
) |
|
|
(3,060 |
) |
|
|
(1,510 |
) |
|
State |
|
(205 |
) |
|
|
193 |
|
|
|
(242 |
) |
|
Foreign |
|
374 |
|
|
|
(205 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,673 |
|
|
$ |
(1,886 |
) |
|
$ |
2,016 |
|
The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense (benefit):
|
(In thousands) |
Year ended June 30, |
|
|||||||||
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
|
Tax expense at statutory rate |
$ |
2,962 |
|
|
$ |
(1,853 |
) |
|
$ |
2,684 |
|
|
Permanent differences |
|
77 |
|
|
|
86 |
|
|
|
59 |
|
|
State income taxes |
|
453 |
|
|
|
387 |
|
|
|
18 |
|
|
Foreign income taxes |
|
31 |
|
|
|
371 |
|
|
|
150 |
|
|
Transaction costs |
|
— |
|
|
|
12 |
|
|
|
618 |
|
|
Contingent consideration |
|
(2 |
) |
|
|
(463 |
) |
|
|
(1,486 |
) |
|
Uncertain tax positions |
|
(15 |
) |
|
|
(165 |
) |
|
|
— |
|
|
Other |
|
167 |
|
|
|
(261 |
) |
|
|
(27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,673 |
|
|
$ |
(1,886 |
) |
|
$ |
2,016 |
|
The following table reconciles the Company’s uncertain income tax positions:
|
(In thousands) |
Year ended June 30, |
|
|||||
|
|
2017 |
|
|
2016 |
|
||
|
Balance, beginning of the year |
$ |
24 |
|
|
$ |
308 |
|
|
Additions on tax positions related to the current year |
|
— |
|
|
|
— |
|
|
Additions on tax positions related to the prior year |
|
— |
|
|
|
24 |
|
|
Other reductions on tax positions taken in prior years |
|
(24 |
) |
|
|
(148 |
) |
|
Settlements |
|
— |
|
|
|
(160 |
) |
|
|
|
|
|
|
|
|
|
|
Balance, end of the year |
$ |
— |
|
|
$ |
24 |
|
The Company’s effective tax rate for the year ended June 30, 2017 is higher than the U.S. federal statutory rate primarily due to state taxes and tax expense on the adjustment of ending deferred tax assets for the U.S. margin tax bracket rate. The Company does not have any uncertain tax positions and a minimal net operating loss carryover, due to expire primarily in the 2027 fiscal year.
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 which remain subject to examination by U.S. authorities are the years ended June 30, 2014 through June 30, 2017. Tax years which remain subject to examination by state authorities are the years ended June 30, 2013 through June 30, 2017. Tax years which remain subject to examination by non-U.S. authorities are the periods ended December 31, 2013 through June 30, 2017. Occasionally acquired entities 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.