What changed in this filing

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Item 1. Financial Statements

2023-05-10 compared with 2023-02-09 · 197 added, 93 removed, 447 unchanged (39% of the section changed)

6 unchanged sentences

Cash and cash equivalents

Investments - held-to-maturity

Accounts receivable, net of allowances of $ 106 and $ 88

38 unchanged sentences

Three months ended

Six months ended

Cost of sales:

6 unchanged sentences

Other income (expense):

Foreign exchange loss

Foreign exchange (loss) gain

Interest expense

Interest income

Other (expense) income, net

Total other (expense) income, net

Other income (expense), net

Total other income (expense), net

Income (loss) before income taxes

11 unchanged sentences

Three months ended

Six months ended

Net income (loss)

Foreign currency translation gain adjustments, net

Foreign currency translation gain (loss) adjustments, net

Total comprehensive income (loss)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the three months ended December 31, 2022 and 2021:

For the three months ended March 31, 2023 and 2022:

(Amounts in thousands, except per share data)

1 unchanged sentence

Shareholders’

Three months ended December 31, 2022:

Balance as of September 30, 2022

Three Months Ended March 31, 2023:

Balance as of December 31, 2022

Other comprehensive income

1 unchanged sentence

Restricted stock issuance

Cash dividends declared on common stock ($ 0.03 per share)

Issuance of shares under employee stock purchase plan

Cash dividends paid on common stock ($ 0.03 per share)

Balance as of March 31, 2023

comprehensive

Shareholders’

Three Months Ended March 31, 2022:

Balance as of December 31, 2021

Other comprehensive loss

Stock-based compensation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Purchase of common stock

Balance as of March 31, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the six months ended March 31, 2023 and 2022:

(Amounts in thousands, except per share data)

comprehensive

Shareholders’

Three months ended December 31, 2021:

Six months ended March 31, 2023:

Balance as of September 30, 2022

1 unchanged sentence

Stock-based compensation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Cash dividends paid on common stock ($ 0.06 per share)

Balance as of March 31, 2023

comprehensive

Shareholders’

Six months ended March 31, 2022:

Balance as of September 30, 2021

Other comprehensive loss

Stock-based compensation

Restricted stock cancellation

Balance as of December 31, 2021

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Purchase of common stock

Balance as of March 31, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Three months ended

Six months ended

Operating activities

2 unchanged sentences

Amortization of intangibles

Foreign exchange loss

Provision for losses on accounts receivable

Loss on sale of fixed assets, net

Foreign exchange loss (gain)

Provision for losses (recoveries) on accounts receivable

Provision for obsolete inventory

1 unchanged sentence

Stock-based compensation expense on stock options and restricted stock awards

Increase in cash surrender value of life insurance

(Decrease) increase in cash surrender value of life insurance

Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

Decrease (increase) in inventories

Decrease in refundable income taxes

Decrease in accounts receivable

Increase in life insurance receivable

Increase in inventories

Decrease (increase) in refundable income taxes

Increase in operating lease right-of-use assets

Decrease (increase) in other assets

Decrease in other assets

(Increase) decrease in investment in lease

6 unchanged sentences

Decrease in other long-term liabilities

Net cash used in operating activities

Net cash (used in) provided by operating activities

Investing activities

Life insurance premiums paid

Purchase of held-to-maturity investments

Proceeds from sales of property, equipment, and improvements

3 unchanged sentences

Financing activities

Dividends paid

Net borrowing under line-of-credit agreement

1 unchanged sentence

Principal payments on finance leases

Purchase of common stock

Proceeds from issuance of shares under equity compensation plans

Net cash used in financing activities

Effects of exchange rate on cash

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents beginning of year

1 unchanged sentence

Supplementary cash flow information:

Cash paid for income taxes

Cash paid for interest

Dividend declared during period

Supplementary non-cash financing activities:

3 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2022

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2023

Organization and Business

6 unchanged sentences

The Company operates in two segments, its Technology Solutions (“TS”) segment and High Performance Products (“HPP”) segment.

Basis of Presentation and New Significant Accounting Policy

Basis of Presentation

The accompanying interim condensed consolidated financial statements have been prepared by the Company and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented.

The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented.

All adjustments were of a normal recurring nature.

1 unchanged sentence

Accordingly, the Company believes that although the disclosures are adequate to make the information presented not misleading, the unaudited condensed consolidated financial statements should be read in conjunction with the notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

New Significant Accounting Policy – Held-to-maturity investment securities

Our held-to-maturity investments consist of treasury bills, which mature at different intervals with the last maturity date in August of 2023.

These investments are stated at amortized cost.

The carrying value of these investments as of March 31, 2023 was $3.5 million and we did not have any outstanding investments as of September 30, 2022.

We did not record any gains or losses on these securities during the six months ended March 31, 2023.

The estimated fair value of these investments approximated their carrying values of March 31, 2023.

We do not intend to sell these investments.

Use of Estimates

3 unchanged sentences

Recent Accounting Pronouncements

New accounting standards not adopted as of December 31, 2022

New accounting standards not adopted as of March 31, 2023

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) , an amendment of the FASB Accounting Standards Codification.

3 unchanged sentences

Additionally, there will be a significant increase in the amount of disclosures by year of origination for certain financing receivables.

For public entities classified as a smaller reporting company, the new standard is effective for annual periods beginning after December 15, 2022 (ASU 2019-10 Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

For public entities classified as a smaller reporting company, the new standard is effective for annual periods beginning after

December 15, 2022 (ASU 2019-10 Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates ), including interim periods within that annual period.

25 unchanged sentences

HPP Segment Revenue

HPP segment revenue is derived from the sale of integrated hardware and software, maintenance, and other services through the Myricom, Multicomputer, and ARIA product lines.

HPP segment revenue is derived from the sale of integrated hardware and software, maintenance, and other services through the Multicomputer, Myricom, and ARIA product lines.

Myricom revenue is derived from the sale of products, which are comprised of both hardware and embedded software which is essential to the products’ functionality, and post contract maintenance and support.

3 unchanged sentences

Technology Solutions Segment

Three months ended December 31,

Three months ended March 31,

(Amounts in thousands)

Technology Solutions Segment

Three months ended December 31,

Three months ended March 31,

(Amounts in thousands)

Technology Solutions Segment

Six months ended March 31,

(Amounts in thousands)

Technology Solutions Segment

Six months ended March 31,

(Amounts in thousands)

* Finance revenue is related to equipment leasing and is not subject to the guidance on revenue from contracts with customers (ASC 606).

1 unchanged sentence

The input method using labor hours expended relative to the total expected hours is used to recognize revenue for professional services.

Only the hours that depict our performance toward satisfying a performance obligation are used to measure progress.

Only the hours that depict our performance toward satisfying a performance obligation are used to

measure progress.

An estimate of hours for each professional service agreement is made at the beginning of each contract based on prior experience and monitored throughout the performance of the services.

23 unchanged sentences

When we have the right to bill a customer, accounts receivable is recorded as an unconditional right exists.

Current contract assets were $ 3.7 million and $ 4.4 million as of December 31, 2022 and September 30, 2022, respectively.

Current contract assets were $ 2.3 million and $ 4.4 million as of March 31, 2023 and September 30, 2022, respectively.

The current portion is recorded in other current assets on the condensed consolidated balance sheets.

There were no noncurrent contract assets as of December 31, 2022 and September 30, 2022.

There were no noncurrent contract assets as of March 31, 2023 and September 30, 2022.

The difference in the balances is due to regular timing differences between when work is performed and having an unconditional right to payment.

Contract liabilities arise when payment is received before we transfer a good or service to the customer.

Current contract liabilities were $ 3.8 million and $ 1.9 million as of December 31, 2022 and September 30, 2022, respectively.

Current contract liabilities were $ 3.7 million and $ 4.1 million as of March 31, 2023 and September 30, 2022, respectively.

The current portion of contract liabilities is recorded in deferred revenue on the condensed consolidated balance sheets.

There was no long-term contract liabilities as of December 31, 2022 and September 30, 2022, respectively.

Revenue recognized for the three months ended December 31, 2022 that was included in contract liabilities as of September 30, 2022 was $ 1.2 million.

There were no long-term contract liabilities as of March 31, 2023 and September 30, 2022, respectively.

Revenue recognized for the six months ended March 31, 2023 that was included in contract liabilities as of September 30, 2022 was $ 1.9 million.

Contract Costs

4 unchanged sentences

Incremental costs are related to commissions in the TS portion of the business.

Current capitalized contract costs are within the other current assets on the condensed consolidated balance sheets as of December 31, 2022 and September 30, 2022.

The portion of current capitalized costs were $ 88 thousand and $ 128 thousand as of December 31, 2022 and September 30, 2022, respectively.

Current capitalized contract costs are within the other current assets on the condensed consolidated balance sheets as of March 31, 2023 and September 30, 2022.

The portion of current capitalized costs were $ 155 thousand and $ 128 thousand as of March 31, 2023 and September 30, 2022, respectively.

There are no noncurrent capitalized costs on the condensed consolidated balance sheets as these commissions are paid annually even when the contract extends beyond a one year period.

The amount of incremental costs amortized for the three months ended December 31, 2022 and 2021 were $ 98 thousand and $ 90 thousand, respectively.

The amount of incremental costs amortized for the three months ended March 31, 2023 and 2022 were $ 98 thousand and $ 91 thousand, respectively.

The amount of incremental costs amortized for the six months ended March 31, 2023 and 2022 were $ 199 thousand and $ 181 thousand, respectively.

This is recorded in selling, general, and administrative expenses.

There was no impairment related to incremental costs capitalized during the nine months ended December 31, 2022 and 2021.

There was no impairment related to incremental costs capitalized during the six months ended March 31, 2023 and 2022.

Costs to fulfill a contract are capitalized when the costs are related to a contract or anticipated contract, generate or enhance resources that will be used in satisfying performance obligations in the future, and costs are recoverable.

1 unchanged sentence

Current capitalized fulfillment costs are in the other current assets and noncurrent costs are in other assets on the condensed consolidated balance sheets.

The portion of current capitalized costs were $ 6 thousand as of December 31, 2022 and $ 9 thousand as of September 30, 2022.

The were no noncurrent capitalized costs as of December 31, 2022 and September 30, 2022, respectively.

The amount of fulfillment costs amortized for the three months ended December 31, 2022 and 2021 were $ 3 thousand and $ 3 thousand, respectively.

The portion of current capitalized costs were $ 3 thousand as of March 31, 2023 and $ 9 thousand as of September 30, 2022.

The were no noncurrent capitalized costs as of March 31, 2023 and September 30, 2022, respectively.

The amount of fulfillment costs amortized for the three months ended March 31, 2023 and 2022 were $ 3 thousand and $ 3 thousand, respectively.

The amount of fulfillment costs amortized for the six months ended March 31, 2023 and 2022 were $ 6 thousand and $ 6 thousand, respectively.

These costs amortized were recorded in cost of sales.

There was no impairment related to fulfillment costs capitalized for the three months ended December 31, 2022 and 2021.

There was no impairment related to fulfillment costs capitalized for the six months ended March 31, 2023 and 2022.

Projects are typically billed upon completion or at certain milestones.

10 unchanged sentences

Managed service contracts are generally longer than one year.

For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022 is set forth in the table below:

For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2023 is set forth in the table below:

(Amounts in thousands)

1 unchanged sentence

Basic net income (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period.

Diluted net income (loss) per common share reflects the maximum dilution that would have resulted from the assumed exercise and share repurchase related to dilutive stock options and is computed by dividing net income (loss) by the assumed weighted average number of common shares outstanding.

Diluted net income (loss) per common share reflects the maximum dilution that would have resulted from the assumed exercise and share repurchase related to dilutive restricted stock awards and is computed by dividing net income (loss) by the assumed weighted average number of common shares outstanding.

We are required to present earnings per share (“EPS”), utilizing the two class method because we had outstanding, non-vested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, which are considered participating securities.

1 unchanged sentence

Three months ended

Six months ended

(Amounts in thousands except per share data)

Net income (loss)

4 unchanged sentences

Weighted average number of common shares outstanding – basic

potential common shares from non–vested stock awards and the assumed exercise of stock options

potential common shares from non–vested stock awards

Weighted average common shares outstanding – diluted

2 unchanged sentences

Anti-dilutive securities include restricted stock, which are excluded from the diluted income (loss) per share computation.

Non-vested restricted stock awards of 194 thousand were excluded from the diluted loss per share calculation for the three months ended December 31, 2021.

These awards were excluded because there was a net loss for this period and their inclusion would have been anti-dilutive.

Non-vested restricted stock awards of 26 thousand and 101 thousand were excluded from the diluted net income per share calculation for the three and six months ended March 31, 2023, respectively.

Non-vested restricted stock awards of 238 thousand and 175 thousand were excluded from the diluted net income per share calculation for the three and six months ended March 31, 2022, respectively.

Accounts and Long-Term Receivable

1 unchanged sentence

This financing is separate from agreements with a leasing component, see Note 8, “Leases” for financing through leases.

These receivables are included in Accounts receivable and Long-term receivable in the amount of $ 8.7 million and $ 6.9 million as of December 31, 2022.

These receivables are included in Accounts receivable and Long-term receivable in the amount of $ 8.7 million and $ 6.7 million as of March 31, 2023.

These receivables are included in Accounts receivable and Long-term receivable in the amount of $ 8.9 million and $ 7.4 million as of September 30, 2022, respectively.

1 unchanged sentence

There is not an allowance for credit losses nor impairments for Accounts and Long-term receivables with a contractual maturity of over one year.

All accounts have no past amounts due as of December 31, 2022 and September 30, 2022.

There was no activity in the allowance for credit losses of these receivables for the three months ended December 31, 2022 and 2021, respectively.

All accounts have no past amounts due as of March 31, 2023 and September 30, 2022.

There was no activity in the allowance for credit losses of these receivables for the three and six months ended March 31, 2023 and 2022, respectively.

All these agreements are looked at as one portfolio in determining credit losses.

2 unchanged sentences

The unearned income represents a rate similar to market at the inception of the agreement.

The amount of interest income earned from sales whose payment terms exceed one year for the three months ended December 31, 2022 and 2021 was $ 182 thousand and $ 139 thousand, respectively.

The amount of interest income earned from sales whose payment terms exceed one year for the three months ended March 31, 2023 and 2022 was $ 189 thousand and $ 122 thousand, respectively.

The amount of interest income earned from sales whose payment terms exceed one year for the six months ended March 31, 2023 and 2022 was $ 371 thousand and $ 261 thousand, respectively.

Interest income from these agreements is recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.

There was one new agreement effective in the first quarter of fiscal year 2023 causing an increase in Accounts and Long-term receivable.

This agreement included approximately $ 3.0 million of payments to be received over the next

2 years from the effective date of the agreement.

This agreement included approximately $ 3.0 million of payments to be received over the next 2 years from the effective date of the agreement.

The revenue for this transaction was recorded net during the first quarter of fiscal year 2023.

29 unchanged sentences

Information related to both lessee and lessor

The components of lease costs for the three months ended December 31, 2022 and 2021 are as follows:

The components of lease costs for the three months ended March 31, 2023 and 2022 are as follows:

Three months ended

Condensed Consolidated Statements of Operations Location

December 31, 2022

December 31, 2021

March 31, 2023

March 31, 2022

(Amounts in thousands)

10 unchanged sentences

Total lease costs, net of sublease interest income

Supplemental cash flow information related to leases for three months ended December 31, 2022 and 2021 is below:

Three months ended

December 31, 2022

December 31, 2021

The components of lease costs for the six months ended March 31, 2023 and 2022 are as follows:

Six months ended

Condensed Consolidated Statements of Operations Location

March 31, 2023

March 31, 2022

(Amounts in thousands)

Finance Lease:

Interest on lease liabilities

Interest expense

Operating Lease:

Operating lease cost

Selling, general, and administrative

Short-term lease cost

Selling, general, and administrative

Total lease costs

Less sublease interest income

Total lease costs, net of sublease interest income

Supplemental cash flow information related to leases for the six months ended March 31, 2023 and 2022 is below:

Six months ended

March 31, 2023

March 31, 2022

(Amounts in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

Cash received from subleases

Accounts payable and accrued expenses, and Other noncurrent liabilities

Accounts payable and Other noncurrent liabilities

The Company enters into certain multi-year agreements with vendors when also entering into some of the multi-year contracts the Company enters into with customers.

4 unchanged sentences

The rate was determined primarily based on the rate the Company could obtain by financing from other sources at the date of the transaction.

Interest expense related to these agreements for the three months ended December 31, 2022 and 2021 was $ 56 thousand and $ 74 thousand, respectively.

Interest expense related to these agreements for the three months ended March 31, 2023 and 2022 was $ 53 thousand and $ 72 thousand, respectively.

Interest expense related to these agreements for the six months ended March 31, 2023 and 2022 was $ 109 thousand and $ 146 thousand, respectively.

The amounts owed for these agreements are in Accounts payable and Other noncurrent liabilities because they are owed to vendors rather than banks or financial institutions for borrowings.

1 unchanged sentence

Below are details of the agreements with the vendors that contain imputed interest:

December 31, 2022

March 31, 2023

September 30, 2022

2 unchanged sentences

Other noncurrent liabilities

The Company had a total of approximately $ 8.3 million due (net of interest) to one of these vendors as of December 31, 2022.

The Company had a total of approximately $ 7.3 million due (net of interest) to one of these vendors as of March 31, 2023.

This is approximately 43 % of Accounts payable and other noncurrent liabilities.

1 unchanged sentence

This is approximately 63 % of Accounts payable and other noncurrent liabilities.

It was the same vendor as of March 31, 2023 and September 30, 2022 that only transacts with the U.S.

division of the TS segment.

The TS segment has many vendors it transacts with and does not have any specific agreement with this vendor that it must purchase certain products from the vendor.

4 unchanged sentences

In October 2019, the Company borrowed $ 2.0 million with a 5.1 % rate of interest related to a multi-year agreement with a customer.

Interest expense related to the notes for the three months ended December 31, 2022 and 2021 was $ 5 thousand and $ 14 thousand, respectively.

December 31, 2022

Interest expense related to the notes for the three months ended March 31, 2023 and 2022 was $ 6 thousand and $ 13 thousand, respectively.

Interest expense related to the notes for the six months ended March 31, 2023 and 2022 was $ 11 thousand and $ 27 thousand, respectively.

March 31, 2023

September 30, 2022

4 unchanged sentences

Notes payable - noncurrent portion

As of December 31, 2022 and September 30, 2022, the Company maintained an inventory line of credit with a borrowing capacity of $ 15.0 million.

As of March 31, 2023 and September 30, 2022, the Company maintained an inventory line of credit with a borrowing capacity of $ 15.0 million.

It may be used by the TS and HPP segments in the U.S.

3 unchanged sentences

(1) a minimum current ratio of 1.2 , (2) tangible net worth of no less than $ 4.0 million, and (3) a maximum ratio of total liabilities to total net worth of less than 5.0 :1.

As of December 31, 2022 and September 30, 2022, Company borrowings, all from the TS segment, under the inventory line of credit were $ 3.4 million and $ 3.1 million, respectively, and the Company was in compliance with all financial covenants.

As of December 31, 2022 and September 30, 2022, this line of credit also includes availability of a limited cash withdrawal of up to $ 1.0 million.

As of December 31, 2022 and September 30, 2022 there were no cash withdrawals outstanding.

As of March 31, 2023 and September 30, 2022, Company borrowings, all from the TS segment, under the inventory line of credit were $ 1.3 million and $ 3.1 million, respectively, and the Company was in compliance with all financial covenants.

As of March 31, 2023 and September 30, 2022, this line of credit also includes availability of a limited cash withdrawal of up to $ 1.0 million.

As of March 31, 2023 and September 30, 2022 there were no cash withdrawals outstanding.

Pension and Retirement Plans

13 unchanged sentences

plans are as follows:

Three Months Ended December 31,

Three Months Ended March 31,

(Amounts in thousands)

6 unchanged sentences

Interest cost

Amortization of net gain

Net periodic (benefit) cost

Six Months Ended March 31,

(Amounts in thousands)

Interest cost

Expected return on plan assets

Amortization of past service costs

Amortization of net (gain) loss

Net periodic benefit

Net periodic (benefit) cost

Post Retirement:

Interest cost

Amortization of net gain

Net periodic (benefit) cost

The fair value of the assets held by the U.K.

1 unchanged sentence

Fair Values as of

December 31, 2022

March 31, 2023

September 30, 2022

5 unchanged sentences

Total plan assets

An income tax expense of $ 133 thousand was recorded for the three months ended December 31, 2022 compared to an income tax expense of $ 12 thousand in the same period of fiscal year 2022.

The income tax expense for three months ended December 31, 2022 is primarily driven by minimum state tax expenses and the required capitalization of R&D expenses under IRC Section 174, offset by the use of federal NOL and R&D credits.

The Company continues to maintain

a full valuation allowance on their operations but will continue to evaluate this need going forward.

The income tax expense for the three months ended December 31, 2021 was driven by an increase in the valuation allowance against deferred tax assets in the period, offset by a benefit recorded for a change in tax law, allowing for the immediate deduction of covered expenses incurred through the Paycheck Protection Program (PPP).

An income tax expense of $ 71 thousand was recorded for the three months ended March 31, 2023 compared to an income tax expense of $ 5 thousand in the same period in the prior year.

An income tax expense of $ 204 thousand was recorded for the six months ended March 31, 2023 compared to an income tax expense of $ 17 thousand in the same period in the prior year.

The income tax expense for the for the three and six months ended March 31, 2023 was primarily driven by minimum state tax expenses and the required capitalization of R&D expenses under IRC Section 174, partially offset by the use of federal NOL and R&D credits.

The Company continues to maintain a full valuation allowance on our operations but will continue to evaluate this need going forward.

The income tax expense for the three and six months ended March 31, 2022 was primarily driven by minimum state tax expenses due to the full valuation allowance in place during the period.

We have in general historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period.

However, we used a discrete effective tax rate method to calculate income taxes for the three months ended December 31, 2022 because we determined that our ordinary income or loss cannot be reliably estimated and small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rates.

However, we used a discrete effective tax rate method to calculate income taxes for the quarter ended March 31, 2023 because we determined that our ordinary income or loss cannot be reliably estimated and small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rates.

Accumulated Other Comprehensive Loss

12 unchanged sentences

unobservable inputs (e.g., a reporting entity’s or other entity’s own data)

The Company had no assets or liabilities measured at fair value on a recurring (except our pension plan assets and whole life insurance policies, see Note 11 for pension plan assets) or non-recurring basis as of December 31, 2022 or September 30, 2022.

To estimate fair value of the financial instruments below, quoted market prices are used when available and classified within Level 1.

1 unchanged sentence

If the preceding information is unavailable, we use internally generated data to estimate fair value which is classified within Level 3.

As of December 31, 2022

As of March 31, 2023

As of September 30, 2022

20 unchanged sentences

Fair value was estimated by discounting future cash flows based on the current rate the Company could get in another transaction with similar terms based on historical information.

Fair value of accounts receivable with an original maturity of one year or less and accounts payable was not materially different from their carrying values as of December 31, 2022 and September 30, 2022.

Fair value of accounts receivable with an original maturity of one year or less and accounts payable was not materially different from their carrying values as of March 31, 2023 and September 30, 2022.

Segment Information

The following tables present certain operating segment information for the three ended December 31, 2022 and 2021.

The following tables present certain operating segment information for the three and six months ended March 31, 2023 and 2022.

Technology Solutions Segment

Three months ended December 31,

Three months ended March 31,

(Amounts in thousands)

Operating (loss) income

Interest expense

Interest income

Capital expenditures

Depreciation and amortization

Operating (loss) income

Interest expense

Interest income

Capital expenditures

Depreciation and amortization

Technology Solutions Segment

Six months ended March 31,

(Amounts in thousands)

Operating (loss) income

Interest expense

Interest income

Capital expenditures

Depreciation and amortization

Operating (loss) income

Interest expense

Interest income

Capital expenditures

Depreciation and amortization

Income (loss) from operations consists of sales less cost of sales, engineering and development expenses, and selling, general and administrative expenses but is not affected by either other income/expense or by income taxes expense (benefit).

Operating income (loss) consists of sales less cost of sales, engineering and development expenses, and selling, general and administrative expenses but is not affected by either other income (expense) or by income tax expense (benefit).

Non-operating expenses/income consists principally of interest income from transactions with payment terms exceeding one year (see Note 6, “Accounts and Long-Term Receivable” for details) and interest income from money market accounts in fiscal year 2023 year as interest rates have increased significantly, and interest expense primarily from multi-year agreements with vendors (see Note 9, “Accounts payable and other noncurrent liabilities”).

All intercompany transactions have been eliminated.

The following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three months ended December 31, 2022 and 2021.

Three months ended December 31,

The following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three and six months ended March 31, 2023 and 2022.

Three months ended March 31,

Six months ended March 31,

(in millions)

Customer A had a balance of $ 13.6 million, or 47 %, of total consolidated accounts receivable and long-term receivable as of December 31, 2022.

Customer A had a balance of $ 16.2 million, or 52 %, of total consolidated accounts

receivable and long-term receivable as of September 30, 2022.

There were no other customers with more than 10% of total consolidated accounts receivable and long-term receivable as of September 30, 2022 and December 31, 2022.

We believe that the Company is not exposed to any significant credit risk with respect to the accounts receivable with any customers as of December 31, 2022.

(Amounts in millions)

One customer, not listed above, had a balance of $ 14.1 million, or 49 %, of total consolidated accounts receivable and long-term receivable as of March 31, 2023 and a balance of $ 15.8 million, or 52 %, of total consolidated accounts receivable and long-term receivable as of September 30, 2022.

There were no other customers with more than 10% of total consolidated accounts receivable and long-term receivable as of March 31, 2023.

We believe that the Company is not exposed to any significant credit risk with respect to the accounts receivable with any customers as of March 31, 2023.

On December 6, 2022, the Company’s board of directors declared a cash dividend of $ 0.03 per share which was paid on January 6, 2023 to shareholders of record as of December 21, 2022, the record date.

On February 8, 2023, the Company’s board of directors declared a cash dividend of $ 0.03 per share which was paid on March 14, 2023 to shareholders of record as of February 24, 2023, the record date.

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