v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

10. INCOME TAXES

The Company recognizes deferred tax assets to the extent that they believe the assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations.

The One Big Beautiful Bill Act (“OBBBA”), enacted into law on July 4, 2025, introduced significant changes to the U.S. federal income tax laws. The OBBBA made permanent certain expiring provisions of the Tax Cuts and Job Act of 2017 (TCJA) and modified other provisions of the TCJA, as well as the Inflation Reduction Act of 2022 (the “IRA”). These changes included the permanent extension of 100% “bonus” depreciation for certain property, the permanent restoration of the tax-basis EBITDA-based limitation on the deductibility of business interest expense subject to certain modifications to the computation of tax-basis EBITDA, and the immediate expensing of qualified domestic research and development expenses. The OBBBA contained various effective dates with certain provisions becoming effective in 2025 and others in 2026 and beyond. The Company has reflected the impact of the OBBBA on current and deferred income taxes in its Consolidated Balance Sheets and Consolidated Statements of Income and Comprehensive Income.

Income tax expense was calculated based upon the following components of income (loss) before income taxes for the years ended June 30:

 

(in thousands)

 

2026

 

 

 

2025

 

 

 

2024

 

United States

 

$

41,194

 

 

 

$

24,028

 

 

 

$

15,348

 

Foreign

 

 

2,622

 

 

 

 

2,938

 

 

 

 

202

 

Income before income taxes

 

$

43,816

 

 

 

$

26,966

 

 

 

$

15,550

 

 

The income tax provision is as follows for the years ended June 30:

 

(in thousands)

 

2026

 

 

 

2025

 

 

 

2024

 

Current

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

3,685

 

 

 

$

7,847

 

 

 

$

4,708

 

State

 

 

1,670

 

 

 

 

2,061

 

 

 

 

1,134

 

Foreign

 

 

816

 

 

 

 

741

 

 

 

 

634

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

4,244

 

 

 

 

(3,523

)

 

 

 

(2,080

)

State

 

 

273

 

 

 

 

(314

)

 

 

 

626

 

Foreign

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Total

 

$

10,688

 

 

 

$

6,812

 

 

 

$

5,022

 

 

Reconciliation between the U.S. federal statutory tax rate and the effective tax rate in accordance with the guidance in ASU 2023-09 is as follows for the years ended June 30, 2026:

 

 

 

June 30, 2026

 

 

(in thousands)

 

Amount

 

 

 

Rate

 

 

Federal statutory tax rate

 

$

9,201

 

 

 

 

21.0

 

%

State and local income taxes, net of federal income tax effect*

 

 

1,259

 

 

 

 

2.9

 

 

Foreign tax effects

 

 

265

 

 

 

 

0.6

 

 

Effect of cross border tax laws

 

 

46

 

 

 

 

0.1

 

 

Tax credits

 

 

(287

)

 

 

 

(0.7

)

 

Nontaxable or nondeductible items:

 

 

 

 

 

 

 

 

Executive compensation limitation

 

 

1,144

 

 

 

 

2.6

 

 

Stock compensation

 

 

(1,225

)

 

 

 

(2.8

)

 

Other

 

 

28

 

 

 

 

0.1

 

 

Changes in uncertain tax positions

 

 

260

 

 

 

 

0.6

 

 

Other adjustments

 

 

(3

)

 

 

 

(0.0

)

 

Total

 

$

10,688

 

 

 

 

24.4

 

%

*State taxes in Indiana, Pennsylvania, California and Illinois made up the majority of the tax effect in this category.

 

Reconciliation between the U.S. federal statutory tax rate and the effective tax rate in accordance with the guidance prior to the adoption of ASU 2023-09 for the years ended June 30:

 

 

 

2025

 

2024

Federal statutory tax rate

 

 

21.0

 

%

 

 

21.0

 

%

State taxes, net of federal effect

 

 

3.5

 

 

 

 

4.7

 

 

Foreign rate differential

 

 

0.9

 

 

 

 

2.1

 

 

Uncertain tax positions

 

 

0.6

 

 

 

 

1.1

 

 

Stock based compensation

 

 

(4.1

)

 

 

 

(1.1

)

 

Executive compensation limitation

 

 

4.0

 

 

 

 

4.2

 

 

Foreign adjustments

 

 

(0.2

)

 

 

 

1.7

 

 

Expired state credits

 

 

-

 

 

 

 

0.6

 

 

Research and development credit

 

 

(2.0

)

 

 

 

(4.8

)

 

Remeasurement of deferred tax assets and valuation
allowance

 

 

(0.1

)

 

 

 

0.3

 

 

State rate change and other state items

 

 

1.0

 

 

 

 

2.1

 

 

Other

 

 

0.6

 

 

 

 

0.4

 

 

Effective tax rate

 

 

25.2

 

%

 

 

32.3

 

%

 

A reconciliation of income taxes paid (net of refunds received) by jurisdiction is as follows:

 

(in thousands)

 

2026

 

U.S. federal

 

$

5,800

 

U.S. state and local:

 

 

 

Kansas

 

 

440

 

Other

 

 

1,053

 

Total U.S. state and local

 

 

1,493

 

Foreign:

 

 

 

Mexico

 

 

816

 

Other

 

 

—

 

Total foreign

 

 

816

 

Total income taxes paid (net of refunds received)

 

$

8,109

 

 

The components of the gross liabilities related to unrecognized tax benefits and the related deferred tax assets are as follows:

 

 

 

June 30,

 

(in thousands)

 

2026

 

 

2025

 

Gross unrecognized tax benefits

 

$

942

 

 

$

777

 

Accrued interest and penalties

 

 

358

 

 

 

210

 

Gross liabilities related to unrecognized tax benefits

 

$

1,300

 

 

$

987

 

Deferred tax assets

 

 

238

 

 

 

186

 

Valuation allowance

 

 

—

 

 

 

—

 

Net deferred tax assets

 

$

238

 

 

$

186

 

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

(in thousands)

 

2026

 

 

 

2025

 

 

 

2024

 

Balance at July 1

 

$

777

 

 

 

$

607

 

 

 

$

424

 

Reductions for tax positions of the prior year

 

 

(13

)

 

 

 

—

 

 

 

 

—

 

Additions based on tax positions related to the current year

 

 

178

 

 

 

 

314

 

 

 

 

183

 

Lapse of statute of limitations

 

 

—

 

 

 

 

(154

)

 

 

 

—

 

Addition for tax positions of the prior year

 

 

—

 

 

 

 

9

 

 

 

 

—

 

Balance at June 30

 

$

942

 

 

 

$

777

 

 

 

$

607

 

 

The Company records interest expense and penalties related to income taxes as income tax expense in the Consolidated Statements of Income and Comprehensive Income. The Company does not expect that there will be any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. The amount of

unrecognized tax benefits as of June 30, 2026, and 2025 that if recognized, would affect the effective tax rate was $0.7 million and $0.6 million respectively.

The primary components of deferred tax assets and (liabilities) are as follows:

 

 

 

June 30,

 

(in thousands)

 

2026

 

 

2025

 

Accounts receivable

 

$

498

 

 

$

432

 

Inventory

 

 

1,462

 

 

 

2,257

 

Self-insurance

 

 

29

 

 

 

31

 

Payroll and related

 

 

1,377

 

 

 

1,402

 

Accrued liabilities

 

 

489

 

 

 

524

 

Property, plant, and equipment

 

 

(341

)

 

 

473

 

Investment tax credit

 

 

93

 

 

 

134

 

Valuation allowance

 

 

(29

)

 

 

(31

)

Net operating loss carryover

 

 

120

 

 

 

5

 

Lease assets

 

 

(8,699

)

 

 

(10,042

)

Lease liabilities

 

 

12,655

 

 

 

14,351

 

Research and development expenditure

 

 

—

 

 

 

2,722

 

Other

 

 

274

 

 

 

186

 

Total

 

$

7,928

 

 

$

12,444

 

 

On June 30, 2026, certain state tax attribute carryforwards of $0.3 million were available, with $0.1 million of credits expiring beginning in fiscal years 2026 through 2028, and $0.1 million of state NOLs carryforward. Some of the state NOL carryforwards will have an indefinite carryforward and some will expire in varying amounts between 2035 and 2041.

The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. Generally, fiscal years 2022 through 2026 remain open to examination by the Internal Revenue Service or other taxing jurisdictions to which the Company is subject.