Income Taxes

12 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

10. INCOME TAXES

The Company recognizes deferred tax assets to the extent that they believe the assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. As of June 30, 2023, it was determined the Company had reached a more-likely-than-not position that the Company will realize the entirety of its deferred tax assets. Therefore, the Company reversed the previously recorded valuation allowance against the federal and state deferred tax assets recorded as of June 30, 2022, of $9.8 million.

Income tax expense was calculated based upon the following components of income before income taxes for the years ended June 30:

(in thousands)	2025		2024		2023
United States	$	24,028	$	15,348	$	6,680
Outside the United States		2,938		202		2,539
Income before income taxes	$	26,966	$	15,550	$	9,219

The income tax (provision) benefit is as follows for the years ended June 30:

(in thousands)	2025			2024			2023
Federal - current	$	(7,847	)	$	(4,708	)	$	(799	)
State and other - current		(2,802	)		(1,768	)		(796	)
Deferred		3,837			1,454			7,154
Total	$	(6,812	)	$	(5,022	)	$	5,559

Reconciliation between the U.S. federal statutory tax rate and the effective tax rate is as follows for the years ended June 30:

	2025				2024				2023
Federal statutory tax rate		21.0		%		21.0		%		21.0		%
State taxes, net of federal effect		3.5				4.7				5.2
Foreign rate differential		0.9				2.1				2.8
Uncertain tax positions		0.6				1.1				(2.1	)
Stock based compensation		(4.1	)			(1.1	)			(0.5	)
Section 162(m)		4.0				4.2				2.5
Foreign adjustments		(0.2	)			1.7				(0.1	)
Expired state credits		—				0.6				17
Research & development credit		(2.0	)			(4.8	)			—
Remeasurement of deferred tax assets and valuation allowance		(0.1	)			0.3				(106.7	)
State rate change and other state items		1.0				2.1				(0.5	)
Other		0.6				0.4				1.0
Effective tax rate		25.2		%		32.3		%		(60.3	)	%

The components of the gross liabilities related to unrecognized tax benefits and the related deferred tax assets are as follows:

	June 30,
(in thousands)	2025		2024
Gross unrecognized tax benefits	$	777	$	607
Accrued interest and penalties		210		172
Gross liabilities related to unrecognized tax benefits	$	987	$	779
Deferred tax assets		186		84
Valuation allowance		—		—
Net deferred tax assets	$	186	$	84

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)	2025			2024		2023
Balance at July 1	$	607		$	424	$	604
Reductions for tax positions of the prior year		—			—		—
Additions based on tax positions related to the current year		314			183		10
Lapse of statute of limitations		(154	)		—		(190	)
Addition for tax positions of the prior year		9			—		—
Balance at June 30	$	777		$	607	$	424

The Company records interest expense and penalties related to income taxes as income tax expense in the consolidated statements of income. The Company does not expect that there will be any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. The amount of unrecognized tax benefits as of June 30, 2025, and 2024 that if recognized, would affect the effective tax rate was $0.6 million and $0.4 million respectively.

The primary components of deferred tax assets and (liabilities) are as follows:

	June 30,
(in thousands)	2025			2024
Accounts receivable	$	432		$	602
Inventory		2,257			1,995
Self-insurance		31			22
Payroll and related		1,402			1,001
Accrued liabilities		524			668
Property, plant, and equipment		473			1,100
Investment tax credit		134			185
Valuation allowance		(31	)		(52	)
Net operating loss carryover		5			7
Lease assets		(10,042	)		(15,160	)
Lease liabilities		14,351			16,185
Research & development expenditure		2,722			1,909
Other		186			145
Total	$	12,444		$	8,607

On June 30, 2025, certain state tax attribute carryforwards of $0.2 million were available, with $0.2 million of credits expiring beginning in fiscal years 2026 through 2028, and $0.1 million of state NOLs carryforward. Some of the state NOL carryforwards will have an indefinite carryforward and some will expire in varying amounts between 2035 and 2041. As of June 30, 2023, it was determined that the Company has reached a more-likely-than-not position that the Company will realize the entirety of its state attribute carryforwards and its U.S. federal deferred tax assets.

The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. Generally, fiscal years 2021 through 2025 remain open to examination by the Internal Revenue Service or other taxing jurisdictions to which the Company is subject.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes a number of provisions which impact the United States tax code. The regulations impacting the tax code have multiple effective dates ranging from fiscal years beginning January 1, 2025, to fiscal years beginning January 1, 2027. The Company has not adjusted its provision for income tax or measurement of deferred tax assets as of June 30, 2025, based on the changes that may be triggered by the OBBBA due

to the law being signed on July 4, 2025. The Company is currently assessing the impact of the OBBBA but does not expect it to have a material impact on our financial position and results of operations.