Income Taxes (Tables)

12 Months Ended

Jun. 30, 2022

Income Taxes

Schedule of effective income tax rate reconciliation

	Year ended June 30,
	2022		2021
	in thousands
Statutory rate	$	(1,520)	$	(7,343)
IRC Section 162(m) limitation (a)		506		12,526
Transaction costs (b)		—		2,770
Change in valuation allowance		2,738		1,500
Permanent adjustments		662		306
Prior year true-up and other		389		(227)
Income from entities not subject to taxation		302		66
State tax		(2,354)		173
Provision for income taxes	$	723	$	9,771

(a) Reflects the permanent addback for the Section 162(m) limitation, which limits the deduction of compensation for the five highest paid officers to $1,000,000.

(b) Amount relates to transaction costs incurred as a result of the July 27, 2020 transaction between us, Ignite Aggregator LP (an investment vehicle owned by certain funds advised by Apax Partners LLP) and our then existing equity holders entering into a Securities Purchase Agreement.

Schedule of provision for income taxes

	Year ended June 30,
	2022		2021
	in thousands
Current:
Federal	$	(998)	$	2,710
State		(339)		642
Total current tax expense		(1,337)		3,352
Deferred:
Federal		1,408		5,342
State		652		1,077
Total deferred tax expense		2,060		6,419
Total provision for income taxes	$	723	$	9,771

Schedule of components of deferred tax assets and liabilities

	Year ended June 30,
	2022		2021
	in thousands
Deferred tax assets:
Amortization	$	686	$	2,241
Federal net operating losses		3,083		—
State net operating losses		4,048		1,887
Transaction costs		—		1,092
Provision for uncollectible accounts		869		1,112
Accrued vacation		828		979
Reported and estimated claims		1,025		941
Stock-based compensation		185		428
Accrued bonuses		102		65
Interest Expense		496		—
Other		6		—
Total deferred tax assets		11,328		8,745
Valuation allowance		(4,050)		(1,887)
Deferred tax assets, net of valuation allowance		7,278		6,858
Deferred tax liabilities:
Goodwill		(9,108)		(9,934)
Depreciation		(8,430)		(7,394)
Equity investment		(5,429)		(3,222)
Prepaid expenses		(2,072)		(2,008)
Total deferred tax liabilities		(25,039)		(22,558)
Net deferred tax liability	$	(17,761)	$	(15,700)