| Income Taxes |
| 10. Income Taxes | | The following are the components of income taxes provision (benefit)
(in thousands): |
| Fiscal years ended June 30, | |
2025 | | |
2024 | |
| | |
| | |
| |
| Current | |
| | |
| |
| Federal | |
$ | 3,200 | | |
$ | 2,195 | |
| State | |
| 1,148 | | |
| 568 | |
| | |
| 4,348 | | |
| 2,763 | |
| | |
| | | |
| | |
| Deferred | |
| | | |
| | |
| Federal | |
| (638 | ) | |
| 516 | |
| State | |
| (183 | ) | |
| (41 | ) |
| | |
| (821 | ) | |
| 475 | |
| | |
$ | 3,527 | | |
$ | 3,238 | |
| | | The reconciliation of income tax expense computed at the federal statutory
tax rate of 21% for the fiscal years ended June 30, 2025 and 2024 to the provision for income taxes is as follows (in thousands): |
| Fiscal years ended June 30, | |
2025 | | |
2024 | |
| | |
| | |
| |
| Tax at the statutory rate | |
$ | 2,313 | | |
$ | 1,866 | |
| State income taxes, net of federal benefit | |
| 745 | | |
| 422 | |
| Nondeductible compensation | |
| 518 | | |
| 885 | |
| Other | |
| (49 | ) | |
| 65 | |
| | |
$ | 3,527 | | |
$ | 3,238 | |
| | |
| | | |
| | |
| Effective tax rate | |
| 32.0 | % | |
| 36.4 | % |
| | | Deferred income taxes reflect the net tax effect of temporary differences
between the basis of assets and liabilities for financial reporting purposes and the basis used for income tax purposes. Significant components
of the Company’s current and noncurrent deferred tax assets and liabilities as of June 30, 2025 and 2024 were as follows (in thousands): |
| As of June 30, | | 2025 | | | 2024 | | | | | | | | | | | Deferred tax assets: | | | | | | | | Allowance for credit losses | | $ | 472 | | | $ | 281 | | | Other reserves | | | 1,048 | | | | - | | | Inventory capitalization | | | 1,303 | | | | 966 | | | Stock compensation | | | 1,325 | | | | 1,039 | | | Accrued liabilities | | | 1,958 | | | | 1,581 | | | Other | | | 443 | | | | 163 | |
| | | | 6,549 | | | | 4,030 | | | | | | | | | | | | | Deferred tax liabilities: | | | | | | | | | | Goodwill | | | (6,984 | ) | | | (5,755 | ) | | Inventory method changes | | | (1,366 | ) | | | - | | | Depreciation | | | (2,701 | ) | | | (2,228 | ) | | Intangible assets | | | (3,189 | ) | | | (1,348 | ) | | Other | | | - | | | | (197 | ) | | | | | (14,240 | ) | | | (9,528 | ) | | Net deferred income tax (liabilities) assets | | $ | (7,691 | ) | | $ | (5,498 | ) |
|