Joint Venture

6 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Joint Venture

Note 14. Joint Venture

The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company recognizes revenue on sales to the JV in the current period, eliminating a portion of profit to the extent goods sold have not been sold through by the JV to an end customer at the end of such reporting period. As of December 31, 2022, the Company owned a 49% interest in the JV, which is reported as an investment in joint venture on the Company’s unaudited condensed consolidated balance sheets.

The following table shows the reconciliation between the carrying value of the Company's investment in the JV and its proportional share of the underlying equity in net assets of the JV (in thousands):

	December 31,  2022			June 30, 2022
Carrying value of investment in joint venture	$	12,276		$	13,879
Deferred intra-entity profit margin		4,469			5,456
Equity method goodwill		(4,720	)		(4,720	)
Proportional share of equity investment in joint venture	$	12,025		$	14,615

As of December 31, 2022, the Company’s carrying value of the investment in the JV was decreased for the Company's proportional share of the JV's currency translation adjustment by $0.5 million. At June 30, 2022, the Company’s carrying value of the investment in the JV was increased for the Company's proportional share of the investee's currency translation adjustment by $1.0 million.

Summarized financial information of the JV, based on a one-quarter lag due to the timing of the availability of the JV’s financial records, is as follows (in thousands):

	Three Months Ended September 30,						Six Months Ended September 30,
Statement of Operations Data:	2022			2021			2022			2021
Revenue	$	23,983		$	8,123		$	50,723		$	15,792
Gross Profit		3,719			2,602			8,315			4,942
Net loss		(1,416	)		(1,698	)		(2,168	)		(2,391	)
Net loss attributable to the Company		(699	)		(832	)		(1,067	)		(1,172	)

Summarized Balance Sheet Data:	As of September 30, 2022		As of September 30, 2021
Assets
Current assets	$	74,525	$	59,250
Non-current assets		17,658		22,677
Total assets	$	92,183	$	81,927
Liabilities and Stockholders' Equity
Current liabilities	$	66,618	$	53,700
Non-current liabilities		669		1,147
Stockholders' equity		24,896		27,080
Total liabilities and stockholders' equity	$	92,183	$	81,927

The following table shows the activity of the Company’s deferred intra-entity profit margin from sales (in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2022			2021			2022			2021
Previously deferred intra-entity profit margin from sales - recognized	$	(4,067	)	$	(1,002	)	$	(6,415	)	$	(1,217	)
Intra-entity profit margin from sales - deferred		3,042			219			5,429			2,172
Total change in deferred intra-entity profit margin from sales	$	(1,025	)	$	(783	)	$	(986	)	$	955