Income Taxes (Tables)

12 Months Ended

Jun. 30, 2019

Schedule of deferred tax assets and liabilities


	June 30,
	2019		2018
	(In thousands)
Deferred tax assets
Net operating loss carryforward	$	4,923	$	5,047
Reserves		4,769		4,618
Accrued expenses		3,492		3,156
Stock compensation expense		5,992		8,293
Other assets		1,524		1,289
Deferred rent		1,056		1,502
Deferred revenue		461		673
Federal tax credits		20		20
State tax credits		363		431
Total deferred tax assets		22,600		25,029
Deferred tax liabilities
Capitalized curriculum development		(10,143)		(9,890)
Capitalized software and website development costs		(12,659)		(13,734)
Property and equipment		(5,166)		(2,573)
Returned materials		(2,643)		(2,452)
Purchased intangibles		(4,110)		(4,498)
Total deferred tax liabilities		(34,721)		(33,147)
Net deferred tax liability before valuation allowance		(12,121)		(8,118)
Valuation allowance		(4,549)		(4,459)
Net deferred tax liability	$	(16,670)	$	(12,577)
Reported as:
Long-term deferred tax liabilities	$	(16,670)	$	(12,577)


	Year Ended June 30,
	2019		2018		2017
	(In thousands)
Current:
Federal	$	3,919	$	887	$	8,756
State		1,988		774		3,153
Foreign		920		1,444		552
Total current		6,827		3,105		12,461
Deferred:
Federal		3,412		(4,769)		(6,505)
State		281		754		(560)
Total deferred		3,693		(4,015)		(7,065)
Total income tax expense (benefit)	$	10,520	$	(910)	$	5,396

Schedule of reconciliation of provision for income taxes to the income tax from applying the statutory rate


	Year Ended June 30,
	2019		2018		2017
U.S. federal tax at statutory rates (1)	21.0	%	28.0	%	35.0	%
Permanent items	2.1		0.9		7.1
Lobbying	0.4		1.2		7.2
State taxes, net of federal benefit	4.3		3.1		19.5
Research and development tax credits	(0.5)		-		(8.2)
Domestic production activities deduction	-		(0.1)		(22.9)
Change in valuation allowance	0.2		(7.2)		53.3
Effects of foreign operations	0.1		-		2.6
Reserve for unrecognized tax benefits	(2.1)		0.9		3.3
Noncontrolling interests	-		0.4		12.5
Other	(0.4)		(3.9)		(0.1)
Impact of federal tax rate reduction	-		(25.4)		-
Repatriation transition tax	-		6.4		-
Stock-based compensation	(3.1)		(7.7)		-
Provision (benefit) for income taxes	22.0	%	(3.4)	%	109.3	%

(1)

The corporate tax rate was lowered from 35% to 21%, effective as of January 1, 2018. Under IRC §15 which governs rate changes, fiscal year taxpayers are subject to a “blended” tax rate for tax years that include January 1, 2018. Using the weighted average calculation, the company’s blended federal tax rate for the year ended June 30, 2018 is 28%.

Schedule of adjusted research and development credit carryforward


	Year Ended June 30,
	2019		2018		2017
	(In thousands)
Balance at beginning of the year	$	2,392	$	2,260	$	2,224
Additions for prior year tax positions		194		585		951
Additions for current year tax positions		87		8		241
Reductions for prior year tax positions		(1,128)		(461)		(1,156)
Balance at end of the year	$	1,545	$	2,392	$	2,260