Income Taxes (Tables)

12 Months Ended

Jun. 30, 2016

Schedule of domestic and foreign components of income before income tax provision

The components of income before income tax provision for the years ended June 30, 2016, 2015 and 2014 are as follows (in thousands):



	Years Ended June 30,
	2016		2015		2014
United States	$	94,335	$	118,083	$	66,152
Foreign	11,092		27,813		13,442
Income before income tax provision	$	105,427	$	145,896	$	79,594

Schedule of income tax provision

The income tax provision for the years ended June 30, 2016, 2015 and 2014, consists of the following (in thousands):



	Years Ended June 30,
	2016			2015			2014
Current:
Federal	$	28,556		$	33,496		$	20,102
State	1,954			1,980			624
Foreign	10,843			10,960			5,252
	41,353			46,436			25,978
Deferred:
Federal	(6,890		)	(1,989		)	122
State	(1,080		)	70			(472		)
Foreign	23			(484		)	(191		)
	(7,947		)	(2,403		)	(541		)
Income tax provision	$	33,406		$	44,033		$	25,437

Schedule of deferred tax assets and liabilities

The Company’s net deferred tax assets as of June 30, 2016 and 2015 consist of the following (in thousands):



	June 30,
	2016			2015
Warranty accrual	$	2,213		$	2,493
Marketing fund accrual	1,792			1,163
Inventory valuation	12,214			10,158
Stock-based compensation	5,186			4,800
Accrued vacation and bonus	2,544			1,230
Payable to foreign subsidiaries	1,824			1,716
Deferred revenue	3,221			425
Other	2,514			1,003
Total deferred income tax assets	31,508			22,988
Deferred tax liabilities-depreciation and other	(3,048		)	(628		)
Deferred income tax assets-net	$	28,460		$	22,360

Reconciliation of effective income tax rate

The following is a reconciliation for the years ended June 30, 2016, 2015 and 2014, of the statutory rate to the Company’s effective federal tax rate:



	Years Ended June 30,
	2016		2015		2014
Tax at statutory rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal tax benefit	3.3		3.0		3.3
Foreign tax rate differences	0.6		(3.0	)	(2.5	)
Research and development tax credit	(7.2	)	(3.4	)	(4.0	)
Qualified production activity deduction	(2.8	)	(1.3	)	(1.8	)
Stock based compensation	2.3		2.2		4.5
Uncertain tax positions	(1.6	)	(0.7	)	(2.1	)
Subpart F income inclusion	(2.9	)	(2.9	)	(3.9	)
Foreign withholding tax	3.3		3.0		4.1
Federal tax return to provision adjustment	0.4		0.2		(0.7	)
Other	1.3		(1.9	)	0.1
Effective tax rate	31.7	%	30.2	%	32.0	%

Schedule of unrecognized tax benefits rollforward

The following table summarizes the activity related to the unrecognized tax benefits (in thousands):



	Gross* Unrecognized Income Tax Benefits
Balance at June 30, 2013	$	8,089
Gross increases:
For current year’s tax positions	3,120
For prior years’ tax positions	132
Gross decreases:
Settlements and releases due to the lapse of statutes of limitations	(1,726		)
For prior year' tax positions	—
Balance at June 30, 2014	9,615
Gross increases:
For current year’s tax positions	3,855
For prior years’ tax positions	793
Gross decreases:
Settlements and releases due to the lapse of statutes of limitations	(971		)
For prior years’ tax positions	—
Balance at June 30, 2015	13,292
Gross increases:
For current year’s tax positions	6,167
For prior years’ tax positions	2,074
Gross decreases:
Settlements and releases due to the lapse of statutes of limitations	(2,138		)
For prior years’ tax positions	—
Balance at June 30, 2016	$	19,395

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*	excludes interest, penalties, federal benefit of state reserves