What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 75 added, 46 removed, 408 unchanged (23% of the section changed)

4 unchanged sentences

Three months ended

Six months ended

Total revenue

22 unchanged sentences

Three months ended

Other comprehensive (loss) / income:

Six months ended

Other comprehensive loss:

Foreign currency translation adjustments

Amortization of actuarial net gain and other adjustments from pension plan, net of tax

Total other comprehensive (loss) / income

Total other comprehensive loss

Comprehensive income

8 unchanged sentences

Inventories, net

Prepaid income taxes

Prepaid expenses and other current assets

20 unchanged sentences

Common stock, $ 0.001 par value, 75,000 shares authorized;

32,605 shares issued and outstanding at March 31, 2024;

32,617 shares issued and outstanding at June 30, 2024;

32,685 shares issued and outstanding at December 31, 2023

17 unchanged sentences

Balance at March 31, 2023

Foreign currency translation adjustments

Issuance of stock under Employee Stock Purchase Plan

Issuance of common stock on restricted stock units, net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at June 30, 2023

Comprehensive

7 unchanged sentences

Balance at March 31, 2024

Foreign currency translation adjustments

Change in pension obligation

Issuance of stock under Employee Stock Purchase Plan

Issuance of common stock on restricted stock units, net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at June 30, 2024

See accompanying Notes to these Consolidated Financial Statements (Unaudited)

2 unchanged sentences

(In thousands)

Three months ended

Six months ended

Cash flows from operating activities

22 unchanged sentences

Repurchase of common stock

Proceeds from Employee Stock Purchase Plan purchases

Principal payments on finance lease obligation

18 unchanged sentences

The balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

As of March 31, 2024, there have been no material changes in the Company’s significant accounting policies, other than with respect to the Company’s accounting policy for derivative financial instruments, which it had not held in prior periods, as described in Note 2 below.

As of June 30, 2024, there have been no material changes in the Company’s significant accounting policies, other than with respect to the Company’s accounting policy for derivative financial instruments, which it had not held in prior periods, as described in Note 2 below.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2024, as amended by Amendment No.

5 unchanged sentences

These contracts have month-to-month settlement dates.

As of March 31, 2024, we had open contracts with a notional value of $ 100 million.

As of June 30, 2024, we had open contracts with a notional value of $ 111 million.

We measure these instruments at fair value and recognize assets or liabilities associated with the intrinsic value on these open contracts on the Consolidated Balance Sheets at the end of each reporting period.

At March 31, 2024, the recognized unrealized gain on these forward exchange contracts was approximately $ 18 thousand and is included in other current assets within our Consolidated Balance Sheets.

At June 30, 2024, the recognized unrealized loss on these forward exchange contracts was approximately $ 323 thousand.

Unrealized gains and losses are shown in our cash flows from operating activities within our Consolidated Statement of Cash Flows.

We have not designated these forward exchange contracts as hedging instruments and we record changes in the fair values at each measurement date in Other, net on the Consolidated Statements of Operations.

For the three months ended March 31, 2024, we recorded $ 1.5 million of gain on forward currency exchange contracts.

For the three and six months ended June 30, 2024, we recorded $ 2.3 million and $ 3.8 million of gain on forward currency exchange contracts, respectively.

We do not offset fair value amounts of derivative instruments.

4 unchanged sentences

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our 2023 Form 10-K.

We recognized stock-based compensation expense of $ 4.7 million and $ 3.2 million for the three-month periods ended March 31, 2024 and 2023, respectively.

These amounts include compensation expense related to RSUs and non-qualified stock options.

In the three-month period ended March 31, 2024, we issued 41,941 shares of common stock upon vesting of RSUs.

In the three-month period ended March 31, 2023, we issued 57,604 shares of common stock upon vesting of RSUs and stock option exercises.

In the three-month period ended March 31, 2024, we received no proceeds in connection with the exercise of stock options.

In the three-month period ended March 31, 2023, we received proceeds of $ 25.0 thousand in connection with the exercise of stock options.

We recognized stock-based compensation expense of $ 5.5 million and $ 4.7 million for the three-month periods ended June 30, 2024 and 2023, respectively.

We recognized stock-based compensation expense of $ 10.2 million and $ 7.9 million for the six-month periods ended June 30, 2024 and 2023, respectively.

These amounts include compensation expense related to RSUs, non-qualified stock options, and stock to be issued to participants under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”).

In the three-month periods ended June 30, 2024 and 2023, respectively, we issued 0.2 million shares of common stock upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP.

In the three-month period ended June 30, 2024 and 2023, we received proceeds of $ 1.2 million and $ 1.0 million, respectively, from purchases under the 2020 ESPP.

In the six-month period ended June 30, 2024 and 2023, we issued 0.2 million and 0.3 million shares of common stock, respectively, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP.

In the six-month period ended June 30, 2024 and 2023, we received proceeds of $ 1.2 million and $ 1.0 million, respectively, in connection with purchases under the 2020 ESPP.

We have operating leases for manufacturing, office space, warehouse space, computer and office equipment and vehicles used in our business operations.

29 unchanged sentences

Total lease liabilities

*Finance lease assets are recorded net of accumulated depreciation of $ 46.7 million and include $ 0.6 million of prepaid financing costs as of March 31, 2024.

*Finance lease assets are recorded net of accumulated depreciation of $ 46.9 million and include $ 0.6 million of prepaid financing costs as of June 30, 2024.

Finance lease assets are recorded net of accumulated depreciation of $ 46.4 million and include $ 0.6 million of prepaid financing costs as of December 31, 2023.

2 unchanged sentences

Our state-of-the-art 101,800 square foot logistics and flex manufacturing center was built to our specifications in Beverly, Massachusetts.

Operating lease expense and depreciation and interest expense relating to our finance lease obligation are recognized within our Consolidated Statement of Operations for the three months ended March 31, 2024 and 2023 as follows:

Three months ended

Six months ended

Classification

17 unchanged sentences

Total lease cost

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.6 million and $ 0.5 million for the three months ended March 31, 2024 and 2023, respectively.

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.7 million and $ 1.3 million for the three and six months ended June 30, 2024, respectively, and includes short-term lease and variable lease costs of approximately $ 0.5 million and $ 1.0 million for the three and six months ended June 30, 2023, respectively.

The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years , beginning in January 2015 and expiring in January 2037, with renewal options.

All other locations are treated as operating leases, with lease terms ranging from one to 16 years .

The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of March 31, 2024:

Maturity of Lease Liabilities

16 unchanged sentences

Our cash flows from our finance lease include both an interest component and a principal component.

The table below shows our cash outflows by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the three months ended March 31, 2024 and 2023, respectively:

Three months ended March 31,

The table below shows our cash outflows by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the six months ended June 30, 2024 and 2023, respectively:

Six months ended June 30,

Cash paid for amounts included in the measurement of lease liabilities

9 unchanged sentences

Three months ended

Six months ended

(in thousands)

4 unchanged sentences

Three months ended

Six months ended

(in thousands)

8 unchanged sentences

Three months ended

Six months ended

(in thousands)

3 unchanged sentences

Balance, end of the period

* Amount is net of a reclassification of $ 4.7 million from deferred revenue to refund liability for the three and six months ended June 30, 2024.

The majority of our system transactions have either (1) payment terms of 90 % due upon shipment of the system and 10 % due upon acceptance or (2) a pre-shipment deposit ranging from 20 % to 60 %, with the remainder due upon shipment, less 10 % due at acceptance.

6 unchanged sentences

Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings.

The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss

experience, loss migration, delinquency trends, collection experience, current economic conditions, trade restrictions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.

allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, loss migration, delinquency trends, collection experience, current economic conditions, trade restrictions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.

We evaluate the credit risk of the customer when extending credit based on a combination of financial and qualitative factors that may affect our customers’ ability to pay.

3 unchanged sentences

Changes to the allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings.

We recorded $ 0.5 million of recovery of bad debt expense for the three-month period ended March 31, 2024.

We did no t have any allowance or incur any credit losses or recoveries for the three-month period ended March 31, 2023.

As of both March 31, 2024 and 2023, we had no provision for credit losses.

We did no t incur any credit losses or recoveries for the three month period ended June 30, 2024.

We recorded $ 0.5 million of recovery of bad debt expense for the six-month period ended June 30, 2024.

We did no t have any allowance or incur any credit losses or recoveries for the six-month period ended June 30, 2023.

As of both June 30, 2024 and 2023, we had no provision for credit losses.

Computation of Net Earnings per Share

3 unchanged sentences

Three months ended

Six months ended

(in thousands, except per share amounts)

Net income available to common stockholders

3 unchanged sentences

Net income per share

Diluted weighted average shares of common stock outstanding does not include 19,548 and 1,120 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended March 31, 2024 and 2023, respectively, as their effect would have been anti-dilutive.

Diluted weighted average shares of common stock outstanding does not include 22,983 and 770 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended June 30, 2024 and 2023, respectively, or 20,639 and 387 common equivalent shares issuable with respect to outstanding equity awards for the six-month periods ended June 30, 2024 and 2023, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the three months ended March 31, 2024:

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the six months ended June 30, 2024:

Defined benefit

2 unchanged sentences

Other comprehensive loss and pension reclassification

Balance at March 31, 2024

Balance at June 30, 2024

Cash, cash equivalents and restricted cash

4 unchanged sentences

Total cash, cash equivalents and restricted cash

As of March 31, 2024, we had $ 6.7 million in restricted cash representing the total of (i) a $ 5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, (ii) a $ 0.7 million letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

As of June 30, 2024, we had $ 6.7 million in restricted cash representing the total of (i) a $ 5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, (ii) a $ 0.7 million letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

See Note 13 for further discussion on the $ 5.9 million cash collateral.

18 unchanged sentences

The changes in our standard product warranty liability are as follows:

Three months ended

Six months ended

(in thousands)

3 unchanged sentences

Changes in estimate of liability for pre-existing warranties during the period

Balance at March 31 (end of period)

Balance at June 30 (end of period)

Amount classified as current

17 unchanged sentences

The following table sets forth our assets by level within the fair value hierarchy:

March 31, 2024

June 30, 2024

Fair Value Measurements

23 unchanged sentences

Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy.

At March 31, 2024, the recognized unrealized gain on these forward exchange contracts was approximately $ 18 thousand and is included in other current assets within our Consolidated Balance Sheets.

At June 30, 2024, the recognized unrealized loss on these forward exchange contracts was approximately $ 323 thousand.

Based on our continued ability to trade and enter into forward contracts, we consider the markets for our fair value instruments to be active.

We evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of March 31, 2024, such credit risks have not had an adverse impact on the fair value of these instruments.

We evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of June 30, 2024, such credit risks have not had an adverse impact on the fair value of these instruments.

Financing Arrangements

1 unchanged sentence

As part of the sale, we also entered into a 22-year lease agreement of our headquarters facility.

This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $ 44.8 million as of March 31, 2024.

This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $ 44.5 million as of June 30, 2024.

The associated lease payments include both an interest component and payment of principal, with the remaining liability being extinguished at the end of the original lease term.

As of March 31, 2024, we had a security deposit of $ 5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet at March 31, 2024.

Income tax expense was $ 7.4 million for the three months ended March 31, 2024, compared to $ 5.2 million for the three months ended March 31, 2023.

The $ 2.2 million increase was primarily due to an increase in pre-tax income and a decrease in stock compensation deduction partially offset by the tax deduction related to foreign sales taxed at a lower rate.

The effective tax rate for the three months ended March 31, 2024 was less than the U.S.

As of June 30, 2024, we had a security deposit of $ 5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet at June 30, 2024.

Income tax expense was $ 6.4 million for the three months ended June 30, 2024, compared to $ 3.0 million for the three months ended June 30, 2023.

The $ 3.4 million increase was primarily due to a decrease in stock compensation deduction.

Income tax expense was $ 13.8 million for the six months ended June 30, 2024, compared to $ 8.2 million for the six months ended June 30, 2023.

The increase was primarily due to a decrease in stock compensation deduction.

The effective tax rate for the three and six months ended June 30, 2024 was less than the U.S.

statutory rate of 21 % due to a forecasted Foreign Derived Intangible Income deduction, Federal research and development tax credits and a favorable discrete item related to equity compensation that reduces the annual tax rate.

The deferred income taxes of $ 54.5 million and $ 53.4 million as of March 31, 2024 and December 31, 2023, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards.

As of March 31, 2024, we have recorded a $ 10.8 million valuation allowance in the U.S.

against certain tax credits and state net operating losses due to the uncertainty of their realization.

The deferred income taxes of $ 55.4 million and $ 53.4 million as of June 30, 2024 and December 31, 2023, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards.

As of June 30, 2024, we have recorded a $ 11.3 million valuation allowance in the U.S.

against certain tax credits due to the uncertainty of their realization.

Realization of our net deferred tax assets is dependent on future taxable income.

2 unchanged sentences

Concentration of Risk

For the three months ended March 31, 2024, no individual customer accounted for greater than ten percent of total revenue.

For the three months ended March 31, 2023, two customers accounted for 15.2 % and 12.9 % of total revenue, respectively.

At March 31, 2024, no individual customer accounted for greater than ten percent of accounts receivable.

For the three months ended June 30, 2024, one customer accounted for 11.5 % of total revenue.

For the three months ended June 30, 2023, no individual customer accounted for greater than ten percent of total revenue.

For the six months ended June 30, 2024, no individual customer accounted for greater than ten percent of total revenue.

For the six months ended June 30, 2023, two customers accounted for 11.6 % and 11.1 % of total revenue, respectively.

At June 30, 2024, one customer accounted for 11.3 % of accounts receivable.

At December 31, 2023, one customer accounted for 12.2 % of accounts receivable.

2 unchanged sentences

In August 2023, our Board of Directors approved additional funding of $ 200 million for our stock repurchase program, to be available on full utilization of the $ 100 million repurchase funding approved in February 2022.

During the three months ended March 31, 2024, we repurchased 0.1 million shares at an average cost of $ 122.99 per share.

During the six months ended June 30, 2024, we repurchased 0.3 million shares at an average cost of $ 114.07 per share.

The timing and actual number of any additional shares to be repurchased under this program will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions.

28 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements