Restatement of Previously Issued Financial Statements

9 Months Ended

Mar. 31, 2018

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

(2) Restatement of Previously Issued Financial Statements

As previously disclosed, the Company determined that it incorrectly accounted for a valuation allowance related to U.S. net deferred tax assets. At the time of the March 31, 2018 Form 10-Q filing, the Company believed that the carrying value of its deferred tax assets was appropriate based on its view that it was more likely than not that this deferred tax asset would be realized in future periods. In preparing its consolidated financial statements for the year ended June 30, 2018, the Company determined, in consultation with BDO USA, LLP (“BDO”), based on management's review of current and historical performance, internal projections and industry data and applicable accounting literature, that it should recognize a valuation allowance equal to the entire carrying value of the Company’s U.S. deferred tax assets. However, upon further review of the negative and positive objective evidence and applicable accounting literature, the Company determined, in consultation with BDO, that a full valuation allowance on domestic net deferred tax assets should have been recorded as of the end of its third fiscal quarter rather than as of the end of its fourth fiscal quarter. As a result, the Company has determined to record a valuation allowance of approximately $71,350 on its U.S. deferred tax assets at March 31, 2018.

As a result, the Company is restating its condensed consolidated financial statements for the three and nine months ended March 31, 2018. The following financial tables reconcile the previously reported amounts to the restated amounts for each condensed consolidated financial statement.

The table below sets forth the condensed consolidated balance sheet, including the balances originally reported, corrections and the as restated balances for March 31, 2018 (in thousands):

	As Reported			Adjustment			As Restated
Assets
Deferred income tax asset, net	$	70,089		$	(70,089	)	$	-
Total assets		831,280			(70,089	)		761,191
Liabilities and Shareholders’ Equity
Deferred income tax liability		-			1,261			1,261
Total liabilities		627,898			1,261			629,159
Retained deficit		(20,354	)		(71,350	)		(91,704	)
Total shareholders’ equity		203,382			(71,350	)		132,032
Total liabilities and shareholders’ equity	$	831,280		$	(70,089	)	$	761,191

The tables below set forth the condensed consolidated statements of loss, including the balances originally reported, corrections and the as restated balances for the three and nine months ended March 31, 2018 (in thousands, except per share data):

	As Reported			Adjustment			As Restated
Three months ended March 31, 2018
Income tax (benefit) provision	$	(66,402	)	$	71,350		$	4,948
Net loss	$	(196,635	)	$	(71,350	)	$	(267,985	)
Basic loss per common share	$	(5.57	)	$	(2.02	)	$	(7.59	)
Diluted loss per common share	$	(5.57	)	$	(2.02	)	$	(7.59	)

	As Reported			Adjustment			As Restated
Nine months ended March 31, 2018
Income tax (benefit) provision	$	(51,353	)	$	71,350		$	19,997
Net loss	$	(210,045	)	$	(71,350	)	$	(281,395	)
Basic loss per common share	$	(5.97	)	$	(2.03	)	$	(8.00	)
Diluted loss per common share	$	(5.97	)	$	(2.03	)	$	(8.00	)

The tables below set forth the condensed consolidated statements of comprehensive income, including the balances originally reported, corrections and the as restated balances for the three and nine months ended March 31, 2018 (in thousands):

	As Reported			Adjustment			As Restated
Three months ended March 31, 2018
Net loss	$	(196,635	)	$	(71,350	)	$	(267,985	)
Comprehensive loss	$	(193,556	)	$	(71,350	)	$	(264,906	)

	As Reported			Adjustment			As Restated
Nine months ended March 31, 2018
Net loss	$	(210,045	)	$	(71,350	)	$	(281,395	)
Comprehensive loss	$	(202,758	)	$	(71,350	)	$	(274,108	)

The table below sets forth the condensed consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances for the nine months ended March 31, 2018 (in thousands):

	As Reported			Adjustment			As Restated
Nine months ended March 31, 2018
Net loss	$	(210,045	)	$	(71,350	)	$	(281,395	)
Deferred income taxes		(80,207	)		91,921			11,714
Accrued expenses and other liabilities		30,299			(20,571	)		9,728
Net cash provided by operating activities		56,415			-			56,415

As indicated above, there was no impact on net cash provided by operating activities as the valuation allowance is a non-cash item. In addition, the restatement had no impact on cash flows from investing activities or financing activities.