N. INCOME TAXES

United States and foreign income (loss) before income taxes and minority interest as of June 30 were as follows:

The provision (benefit) for income taxes is comprised of the following:

The components of the net deferred tax asset as of June 30 are summarized in the table below.

At June 30, 2026 the Company has net operating loss carryforwards (“NOLs”) of approximately $0 and $11,685 for federal and state income tax purposes, respectively, which will expire at various dates from fiscal year 2027 – 2045. During the year, the Company filed accounting method change applications with the Internal Revenue Service, which resulted in changes to certain tax attribute balances, including inventory, prepaids and deferred revenue. The Company has federal and state tax Research & Development credit (“R&D credits”) carryforwards of approximately $1,345 and $1,190, respectively. Federal R&D credits will expire at various dates from fiscal years 2038 – 2046, while state R&D credits will expire at various dates from fiscal years 2063 – 2076. The Company has foreign tax credit carryforwards of approximately $1,502, which will expire at various dates from fiscal 2027-2034.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company takes into account such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and available tax planning strategies.

During fiscal 2026, the Company reassessed the realizability of its deferred tax assets and concluded that its domestic valuation allowance was no longer required. This conclusion was supported by improved operating results, including a three-year cumulative income position, as well as the implementation of tax planning strategies during the year. As a result, the Company released $23,879 of valuation allowance and recognized a corresponding income tax benefit. Of the total valuation allowance released, $7,462 was recorded directly to retained earnings in connection with the change in inventory valuation method from LIFO to FIFO, and $16,417 was recognized as an income tax benefit in the Consolidated Statement of Operations and Comprehensive Income (Loss).

The table below provides the updated requirements of ASU 2023-09, on a prospective basis. See Note A – Description of Business and Summary of Significant Accounting Policies- Recently Adopted Accounting Standards section for additional details on the adoption of ASU- 2023-09.

Following is a reconciliation of the applicable U.S. federal income taxes to the actual income taxes reflected in the statements of operations and other comprehensive income (loss) for the year-end June 30, 2026:

The Company’s effective tax rate of (102.8%) was primarily driven by the release of the Federal and State valuation allowance, and foreign inclusion items: GILTI, FDII and subpart F.

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in calendar year 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.  The Act also includes certain changes to the US taxation of foreign activity, including changes to foreign tax credits, GILTI, FDII, and BEAT. These changes are generally effective for tax years beginning after December 31, 2025.

The change in tax law has had an immaterial net impact on the tax provision for the year ended  June 30, 2026. The advantageous provisions of the tax act were not beneficial to the Company in their efforts to utilize expiring tax attributes.

As previously disclosed and adjusted, the following is a reconciliation of the applicable U.S. federal income taxes to the actual income taxes reflected in the statements of operations and other comprehensive income (loss) for the year-end June 30, 2025:

The Company has not provided additional U.S. income taxes on cumulative earnings of its consolidated foreign subsidiaries that are considered to be reinvested indefinitely. The Company reaffirms its position that the earnings of those subsidiaries remain permanently invested and has no plans to repatriate funds from any permanently reinvested subsidiaries to the U.S. for the foreseeable future. Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation. The Company’s intent is for such earnings to be reinvested by the subsidiaries or to be repatriated only when it would be tax effective through the utilization of foreign tax credits.

Annually, the company files income tax returns in various taxing jurisdictions inside and outside the United States. In general, the tax years that remain subject to examination are 2021 through 2026 for our major operations in Belgium, Japan, Netherlands, Singapore and Australia. The tax years open to examination in the U.S. are for years subsequent to fiscal 2022, however some statutes remain open with respect to certain tax attribute carryforwards until those attributes are utilized.

The Company has approximately $757 and $644 of unrecognized tax benefits as of June 30, 2026 and June 30, 2025 respectively, which, if recognized would impact the effective tax rate. The Company’s policy is to accrue interest and penalties related to unrecognized tax benefits in income tax expense.

Below is a reconciliation of beginning and ending amount of unrecognized tax benefits as of June 30:

Substantially all of the Company’s unrecognized tax benefits as of June 30, 2026, if recognized, would affect the effective tax rate. As of June 30, 2026 and 2025, the amounts accrued for interest and penalties totaled $2 and $6, respectively, and are not included in the reconciliation above.

The Company made tax payments and received tax refunds during the year ended June 30, 2026 as follows: