INCOME TAXES (Tables)
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12 Months Ended |
Jun. 30, 2026 |
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| INCOME TAXES |
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| Schedule of geographical breakdown of income before the provision for income taxes |
The following is a geographical breakdown of income before the provision for income taxes (in thousands): | | | | | | | | | | | | 2024 | | 2025 | | 2026 | Pre-tax income: | | | | | | | | | | United States | | $ | 41,330 | | $ | 30,218 | | $ | 45,277 | Foreign | | | 119,884 | | | 155,876 | | | 147,469 | Total pre-tax income | | $ | 161,214 | | $ | 186,094 | | $ | 192,746 |
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| Schedule of provision for income taxes |
Our provision for income taxes consists of the following (in thousands): | | | | | | | | | | | | 2024 | | 2025 | | 2026 | Current: | | | | | | | | | | Federal | | $ | 22,229 | | $ | 12,218 | | $ | 8,583 | State | | | 2,122 | | | 2,260 | | | 2,422 | Foreign | | | 22,842 | | | 31,066 | | | 29,062 | Total current provision | | | 47,193 | | | 45,544 | | | 40,067 | Deferred: | | | | | | | | | | Federal | | $ | (13,375) | | $ | (7,667) | | $ | (1,509) | State | | | (594) | | | (853) | | | (850) | Foreign | | | (164) | | | (567) | | | 327 | Total deferred (benefit) | | | (14,133) | | | (9,087) | | | (2,032) | Total provision | | $ | 33,060 | | $ | 36,457 | | $ | 38,035 |
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| Schedule of net income tax payments after the prospective adoption of ASU 2023-09 |
Net income tax payments for the year ended June 30, 2026, after the prospective adoption of ASU 2023-09, consisted of the following: | | | | United States – federal (1) | | $ | 10,351 | United States – state and local | | | 1,755 | United Kingdom | | | 11,919 | Canada | | | 2,499 | Malaysia | | | 6,277 | Singapore | | | 2,702 | Other foreign | | | 7,497 | Total | | $ | 43,000 |
| (1) | The Company’s U.S. federal payments were reduced by foreign tax credits and research and development credits. |
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| Summary of activity of unrecognized tax benefits |
A summary of activity of unrecognized tax benefits for fiscal 2025 and 2026 is as follows (in thousands). | | | | Balance at June 30, 2024 | | $ | 17,914 | Additions on tax positions for the current year | | | 1,296 | Additions on tax positions from prior years | | | 234 | Reduction in tax positions from prior year for dispute settlements | | | (438) | Reductions to prior year tax positions | | | (305) | Reduction to prior year tax positions for statute of limitations closure | | | (3,108) | Balance at June 30, 2025 | | $ | 15,593 | Additions on tax positions for the current year | | | 973 | Additions on tax positions from prior years | | | 58 | Reduction to prior year tax positions | | | (44) | Reduction to prior year tax positions for statute of limitations closure | | | (1,668) | Balance at June 30, 2026 | | $ | 14,912 |
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| Schedule of deferred income tax assets (liabilities) |
Deferred income tax assets (liabilities) consisted of the following (in thousands): | | | | | | | | | June 30, | | | 2025 | | 2026 | Deferred income tax assets: | | | | | | | Tax credit carryforwards | | $ | 6,383 | | $ | 6,768 | Net operating loss carryforwards | | | 3,339 | | | 3,197 | Customer advances | | | 6,521 | | | 8,100 | Allowance for doubtful accounts | | | 3,146 | | | 3,560 | Inventory reserve | | | 14,636 | | | 14,435 | Accrued liabilities | | | 3,209 | | | 4,200 | Operating lease liabilities | | | 5,540 | | | 8,946 | Stock and deferred compensation | | | 14,504 | | | 16,816 | Other assets | | | 1,700 | | | 3,548 | Total deferred income tax assets | | | 58,978 | | | 69,570 | Valuation allowance | | | (10,471) | | | (11,352) | Net deferred income tax assets | | | 48,507 | | | 58,218 | Deferred income tax liabilities: | | | | | | | Depreciation | | | (6,280) | | | (8,621) | Amortization of intangible assets | | | (13,784) | | | (13,280) | Withholding tax on unrepatriated foreign earnings | | | (8,496) | | | (9,266) | Operating lease ROU assets | | | (5,482) | | | (8,752) | Other liabilities | | | (3,604) | | | (3,842) | Total deferred income tax liabilities | | | (37,646) | | | (43,761) | Net deferred income tax assets | | $ | 10,861 | | $ | 14,457 |
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| Schedule of components of net deferred income tax asset |
The components of the net deferred income tax asset are classified in the consolidated balance sheets as follows (in thousands): | | | | | | | | | June 30, | | | 2025 | | 2026 | Long term deferred income tax asset, included in other assets | | $ | 14,195 | | $ | 19,920 | Long term deferred income tax liability | | | (3,334) | | | (5,463) | Net deferred income tax assets | | $ | 10,861 | | $ | 14,457 |
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| Schedule of components of current taxes receivable and payable and prepaid taxes |
The components of current taxes receivable and payable and prepaid taxes are classified in the consolidated balance sheets as follows (in thousands): | | | | | | | | | June 30, | | | 2025 | | 2026 | Current taxes receivable and prepaid taxes, included in prepaid expenses and other current assets | | $ | 10,958 | | $ | 16,352 | Current taxes payable, included in other accrued expenses and current liabilities | | | (22,285) | | | (23,266) | Net tax payable | | $ | (11,327) | | $ | (6,914) |
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| Schedule of consolidated effective income tax rate differs from the federal statutory income tax rate |
| | | | | | | | | June 30 | | | | 2026 | | Provision for income taxes at federal statutory rate | | $ | 40,477 | | 21 | % | State tax expense, net of federal income tax benefit (1) | | | 1,003 | | 0.5 | | Foreign tax effects: | | | | | | | United Kingdom | | | | | | | Patent box benefit | | | (5,435) | | (2.8) | | Other | | | 1,324 | | 0.7 | | Other foreign jurisdictions | | | 2,087 | | 1.1 | | Effect of cross-border tax laws: | | | | | | | Foreign Derived Intangible Income (FDII) benefit | | | (2,973) | | (1.5) | | Other effects of cross-border tax laws | | | 901 | | 0.4 | | Tax Credits: | | | | | | | Research and development tax credits | | | (2,054) | | (1.1) | | Changes in valuation allowance | | | 2,527 | | 1.3 | | Nontaxable or nondeductible items: | | | | | | | Officers’ compensation | | | 4,771 | | 2.5 | | Other | | | (4,332) | | (2.3) | | Changes in unrecognized tax benefit | | | (261) | | (0.1) | | Effective income tax rate | | $ | 38,035 | | 19.7 | % |
(1) | Massachusetts, Minnesota, New York, and Texas made up the majority (greater than 50% of the tax expense in this category). |
| | | | | | | | 2024 | | 2025 | | Provision for income taxes at federal statutory rate | | 21 | % | 21 | % | Research and development tax credits | | (1.6) | | (1.5) | | Foreign income subject to tax at other than federal statutory rate | | 1.7 | | 2.1 | | Stock compensation | | (0.5) | | (0.9) | | Officers’ compensation | | 4.1 | | 3.2 | | Change in valuation allowance | | 1.0 | | 0.2 | | Unrecognized tax expense (benefit) | | 3.7 | | (1.3) | | State tax expense | | 0.9 | | 1.1 | | U.S. tax on foreign earnings | | (0.8) | | (0.2) | | Changes in prior year estimates | | (2.4) | | 0.3 | | Global intangible low-taxed income, net of foreign tax credits | | 0.8 | | 0.9 | | Foreign Derived Intangible Income Benefit | | (4.3) | | (1.9) | | Non-taxable earnings from acquisitions | | (0.8) | | (0.5) | | Patent box benefit | | (3.2) | | (2.8) | | Other | | 0.9 | | (0.1) | | Effective income tax rate | | 20.5 | % | 19.6 | % |
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