What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-19 compared with 2024-05-09 · 168 added, 158 removed, 549 unchanged (37% of the section changed)

39 unchanged sentences

Total liabilities and shareholders’ equity

(1) Retroactively adjusted for the effects of a stock split effected in the form of a 100 % stock dividend (see Note 1)

(1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1)

See accompanying notes to unaudited condensed consolidated financial statements.

3 unchanged sentences

Three months ended

Six Months Ended

Nine Months Ended

Cost of sales:

4 unchanged sentences

Total operating expenses

Operating income

Operating (loss) income

Other income (expense):

Foreign exchange gain (loss)

Foreign exchange loss

Interest expense

1 unchanged sentence

Other income, net

Total other income (expense), net

Income before income taxes

Income tax expense

Net income attributable to common shareholders

Net income per common share - basic (1)

Total other income, net

(Loss) income before income taxes

Income tax (benefit) expense

Net (loss) income

Net (loss) income attributable to common shareholders

Net (loss) income per common share - basic (1)

Weighted average common shares outstanding - basic (1)

Net income per common share - diluted (1)

Net (loss) income per common share - diluted (1)

Weighted average common shares outstanding - diluted (1)

(1) Retroactively adjusted for the effects of a stock split effected in the form of a 100 % stock dividend (see Note 1)

(1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1)

See accompanying notes to unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Amounts in thousands)

Three months ended

Six Months Ended

Foreign currency translation (loss) gain adjustments, net

Total comprehensive income

Nine Months Ended

Net (loss) income

Foreign currency translation gain adjustments, net

Total comprehensive (loss) income

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the three months ended March 31, 2024 and 2023

For the three months ended June 30, 2024 and 2023

(Amounts in thousands, except per share data)

1 unchanged sentence

Shareholders’

Three Months Ended March 31, 2024:

Balance as of December 31, 2023

Other comprehensive loss

Three Months Ended June 30, 2024:

Balance as of March 31, 2024

Other comprehensive income

Stock-based compensation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Restricted stock cancellation

Purchase of common stock

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

Balance as of March 31, 2024

Balance as of June 30, 2024

comprehensive

Shareholders’

Three Months Ended March 31, 2023:

Balance as of December 31, 2022

Three Months Ended June 30, 2023:

Balance as of March 31, 2023

Other comprehensive income

Stock-based compensation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Purchase of common stock

Cash dividends paid on common stock ($ 0.02 per share) (1)

Balance as of March 31, 2023

(1) Retroactively adjusted for the effects of a stock split effected in the form of a 100 % stock dividend (see Note 1)

Balance as of June 30, 2023

(1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1)

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the six months ended March 31, 2024 and 2023

For the nine months ended June 30, 2024 and 2023

(Amounts in thousands, except per share data)

1 unchanged sentence

Shareholders’

Six months ended March 31, 2024:

Nine months ended June 30, 2024:

Balance as of September 30, 2023

2 unchanged sentences

Stock-based compensation

Restricted stock cancellation

Restricted stock issuance

Issuance of shares under employee stock purchase plan

Purchase of common stock

Cash dividends paid on common stock ($ 0.075 per share) (1)

Balance as of March 31, 2024

Balance as of June 30, 2024

comprehensive

Shareholders’

Six months ended March 31, 2023:

Nine months ended June 30, 2023:

Balance as of September 30, 2022

3 unchanged sentences

Issuance of shares under employee stock purchase plan

Purchase of common stock

Cash dividends paid on common stock ($ 0.05 per share) (1)

Balance as of March 31, 2023

(1) Retroactively adjusted for the effects of a stock split effected in the form of a 100 % stock dividend (see Note 1)

Balance as of June 30, 2023

(1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1)

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Six Months Ended

Nine Months Ended

Operating activities

2 unchanged sentences

Foreign exchange loss

Provision for credit losses

Provision for credit losses - financing receivables

Provision for credit losses - accounts receivable

Provision for obsolete inventory

4 unchanged sentences

Changes in operating assets and liabilities:

Decrease in accounts receivable

Decrease in financing receivable

Decrease (increase) in inventories

Decrease (increase) in accounts receivable

Increase in financing receivable

(Increase) decrease in inventories

Decrease in refundable income taxes

Increase in operating lease right-of-use assets

Decrease in other assets

Decrease in accounts payable and accrued expenses

Increase in interest payable

Increase (decrease) in accounts payable and accrued expenses

Decrease in interest payable

Decrease in operating lease liabilities

2 unchanged sentences

Decrease in income taxes payable

Decrease in other long-term liabilities

Increase (decrease) in other noncurrent liabilities

Net cash provided by (used in) operating activities

2 unchanged sentences

Purchase of held-to-maturity investments

Proceeds from maturities of held-to-maturity investments

Additions of intangible assets

6 unchanged sentences

Principal payments on finance leases

Purchase of common stock

Proceeds from issuance of shares under equity compensation plans

8 unchanged sentences

Supplementary non-cash financing activities:

Customer financing for inventory sold (see Note 5 Financing receivables for details)

Obtaining a right-of-use asset in exchange for a lease liability

Customer financing for inventory sold (see Note 5 Financing receivables, net for details)

See accompanying notes to unaudited condensed consolidated financial statements.

20 unchanged sentences

The Amendment became effective upon filing with the Secretary of the Commonwealth of Massachusetts on February 21, 2024.

On June 26, 2024, the stockholders of CSP, Inc.

approved an amendment to the Company's Articles of Organization, as amended (the "Articles of Organization"), to increase the number of authorized shares of Common Stock from 9,753,900 to 20,000,000 (the "Amendment").

On June 26, 2024, the Company filed an Articles of Amendment to the Articles of Organization with the Secretary of the Commonwealth of Massachusetts to effect the Amendment, which became effective immediately upon such filing.

This amendment is included as Exhibit 3.1 and is incorporated herein by reference.

On February 21, 2024, the Company announced its Board of Directors approved and declared a two -for-one stock split to be effected in the form of a 100 % stock dividend.

The stock dividend was paid on March 20, 2024 to shareholders of record as of the close of business on March 6, 2024.

In accordance with ASC 505 Equity , we have determined this had a material effect on reducing share market value and therefore was treated this event as a stock split for accounting purposes.

In accordance with ASC 505 Equity , specifically ASC 505-20-25-3 through ASC 505-20-25-6 , we have determined this had a material effect on reducing share market value and therefore was treated this event as a stock split for accounting purposes.

All common shares and per share amounts contained in these condensed interim financial statements and notes have been retrospectively restated to reflect this two -for-one stock split in the form a 100 % dividend in accordance with ASC 260 Earnings Per Share , specifically ASC 260-10-55-12 .

58 unchanged sentences

Technology Solutions Segment

Three months ended March 31,

Three months ended June 30,

(Amounts in thousands)

Technology Solutions Segment

Three months ended March 31,

Three months ended June 30,

(Amounts in thousands)

Technology Solutions Segment

Six months ended March 31,

Nine months ended June 30,

(Amounts in thousands)

Technology Solutions Segment

Six months ended March 31,

Nine months ended June 30,

(Amounts in thousands)

3 unchanged sentences

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.

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.

This method is most appropriate as it depicts the measure of progress towards satisfaction of the performance obligation.

22 unchanged sentences

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

Current contract assets were $ 0.6 million and $ 0.9 million as of March 31, 2024 and September 30, 2023, respectively.

Current contract assets were $ 0.8 million and $ 0.9 million as of June 30, 2024 and September 30, 2023, respectively.

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

There were no noncurrent contract assets as of March 31, 2024 and September 30, 2023.

There were no noncurrent contract assets as of June 30, 2024 and September 30, 2023.

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 $ 1.7 million and $ 1.9 million as of March 31, 2024 and September 30, 2023, respectively.

Current contract liabilities were $ 1.6 million and $ 1.9 million as of June 30, 2024 and September 30, 2023, respectively.

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

There were no long-term contract liabilities as of March 31, 2024 and September 30, 2023, respectively.

Revenue recognized for the three and six months ended March 31, 2024 that was included in contract liabilities as of September 30, 2023 was $ 0.2 million and $ 1.1 million, respectively.

There were no long-term contract liabilities as of June 30, 2024 and September 30, 2023, respectively.

Revenue recognized for the three and nine months ended June 30, 2024 that was included in contract liabilities as of September 30, 2023 was $ 0.2 million and $ 1.3 million, respectively.

Contract Costs

2 unchanged sentences

The costs are amortized over the contract term and expected renewal periods.

The period of amortization is generally three to six years .

The period of amortization is generally three years .

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 March 31, 2024 and September 30, 2023.

The portion of current capitalized costs were $ 253 thousand and $ 172 thousand as of March 31, 2024 and September 30, 2023, respectively.

Current capitalized contract costs are within the other current assets on the condensed consolidated balance sheets as of June 30, 2024 and September 30, 2023.

The portion of current capitalized costs were $ 190 thousand and $ 172 thousand as of June 30, 2024 and September 30, 2023, 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 March 31, 2024 and 2023 were $ 121 thousand and $ 98 thousand, respectively.

The amount of incremental costs amortized for the six months ended March 31, 2024 and 2023 were $ 229 thousand and $ 199 thousand, respectively and is recorded in selling, general, and administrative expenses.

There was no impairment related to incremental costs capitalized during the six months ended March 31, 2024 and 2023.

The amount of incremental costs amortized for the three months ended June 30, 2024 and 2023 were $ 122 thousand and $ 103 thousand, respectively.

The amount of incremental costs amortized for the nine months ended June 30, 2024 and 2023 were $ 351 thousand and $ 302 thousand, respectively and is recorded in selling, general, and administrative expenses.

There was no impairment related to incremental costs capitalized during the nine months ended June 30, 2024 and 2023.

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.

Costs to fulfill a contract are related to the TS portion of the business and involve activities performed before managed services can be completed.

The were no current capitalized costs as of March 31, 2024 or September 30, 2023.

The were no current capitalized costs as of June 30, 2024 or September 30, 2023.

Projects are typically billed upon completion or at certain milestones.

9 unchanged sentences

The royalty agreement is longer than one year, but not included in the table below as the royalties are sales-based.

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 March 31, 2024 is set forth in the table below:

Managed service contracts are generally longer than one year and revenue is recognized ratably over the contract term.

For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2024 is set forth in the table below:

(Amounts in thousands)

Earnings Per Share of Common Stock

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

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

Diluted net income per share includes the dilutive effect of restricted stock, if any, calculated using the treasury stock method.

For unvested restricted stock, assumed proceeds under the treasury stock method would include unamortized compensation cost.

Net losses are not allocated to participating share-based payment awards, which include the non-vested 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

Nine Months Ended

(Amounts in thousands except per share data)

Net (loss) income

net income attributable to nonvested common stock

Net income attributable to common shareholders

Net (loss) income attributable to common shareholders

Weighted average total shares outstanding - basic (1)

3 unchanged sentences

Weighted average common shares outstanding - diluted (1)

Net income per common share - basic (1)

Net income per common share - diluted (1)

(1) Retroactively adjusted for the effects of a stock split effected in the form of a 100 % stock dividend (see Note 1)

Net (loss) income per common share - basic (1)

Net (loss) income per common share - diluted (1)

(1) Retroactively adjusted for the effects of a two for one stock split effected in the form of a 100% stock dividend (see Note 1)

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

There were no anti-dilutive securities for the three and six months ended March 31, 2024.

Non-vested restricted stock awards of 52 thousand and 202 thousand shares were excluded from the diluted net income per share calculation for the three and six months ended March 31, 2023, respectively.

There were anti-dilutive securities for the three months ended June 30, 2024 of $ 193 thousand.

Accounts receivable, net

4 unchanged sentences

The expense associated with the allowance for expected credit losses is recognized in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

Amounts disclosed below for the three and six months ended March 31, 2024 reflect adoption of the new CECL standard and the amounts disclosed for the three and six months ended March 31, 2023 reflect superseded guidance.

Amounts disclosed below for the three and nine months ended June 30, 2024 reflect adoption of the new CECL standard and the amounts disclosed for the three and nine months ended June 30, 2023 reflect superseded guidance.

The following table presents the changes in the allowance for accounts receivable for the periods indicated.

Three months ended

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

(Amounts in thousands)

1 unchanged sentence

Balances at beginning of the period

Adjustment for adoption of new CECL standard

Provision for credit losses

Balances at end of the period

Six months ended

March 31, 2024

March 31, 2023

Nine months ended

June 30, 2024

June 30, 2023

(Amounts in thousands)

14 unchanged sentences

The Company does not offer financing for customers where the risk is classified as higher, which would be lower than the equivalent of a BB Fitch rating.

Financing receivables, net carry an average weighted interest rate of 7.1 %, which reflects the approximate interest rate consistent with a separate financing transaction with the customer 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 March 31, 2024 and 2023 was $ 158 thousand and $ 189 thousand, respectively.

The amount of interest income earned from sales whose payment terms exceed one year for the six months ended March 31, 2024 and 2023 was $ 351 thousand and $ 371 thousand, respectively.

Financing receivables, net carry an average weighted average interest rate of 7.1 %, which reflects the approximate interest rate consistent with a separate financing transaction with the customer 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 June 30, 2024 and 2023 was $ 177 thousand and $ 234 thousand, respectively.

The amount of interest income earned from sales whose payment terms exceed one year for the nine months ended June 30, 2024 and 2023 was $ 528 thousand and $ 605 thousand, respectively.

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

Amounts disclosed below as of March 31, 2024 reflect adoption of the new CECL standard and the amounts disclosed as of September 30, 2023 reflect superseded guidance.

Amounts disclosed below as of June 30, 2024 reflect adoption of the new CECL standard and the amounts disclosed as of September 30, 2023 reflect superseded guidance.

The following table presents the components of the Company’s Financing receivables, net segregated by portfolio (risk rating) for the periods indicated:

As of March 31, 2024

As of June 30, 2024

As of September 30, 2023

6 unchanged sentences

Financing receivables, net

The following table presents the changes in Allowance for credit losses for Financing receivables, net for the periods indicated:

Three months ended

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

(Amounts in thousands)

4 unchanged sentences

Balances at end of the period

Six months ended

March 31, 2024

March 31, 2023

Nine months ended

June 30, 2024

June 30, 2023

(Amounts in thousands)

7 unchanged sentences

A probability method for calculating credit losses is used based on historical data of defaults of Fitch ratings and length of time.

Various factors are also assessed in the allowance for credit losses including

internal historical data as well as macroeconomic forecast assumptions and management judgments applicable to and through the expected life of the portfolios.

Various factors are also assessed in the allowance for credit losses including internal historical data as well as macroeconomic forecast assumptions and management judgments applicable to and through the expected life of the portfolios.

Macroeconomic conditions include the level of gross domestic product (“GDP”) growth and unemployment rates, which directly correlate with our historical credit losses.

The expense associated with the allowance for expected credit losses is recognized in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

The expense associated with the

allowance for expected credit losses is recognized in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

Financing receivables whose payment terms exceed one year are placed on non-accrual status, meaning interest income stops being recorded, when the customer has a past due amount in excess of 30 days or reasonable doubt exists in collecting all interest and principal.

2 unchanged sentences

Recording interest income resumes once no reasonable doubt exists regarding collecting all interest and principal.

There were no financing receivables placed on non-accrual status as of March 31, 2024 or September 30, 2023.

The following table presents Financing receivables, gross, including accrued interest, by credit quality indicator segregated by risk rating and year of origination as of March 31, 2024:

March 31, 2024

There were no financing receivables placed on non-accrual status as of June 30, 2024 or September 30, 2023.

The following table presents Financing receivables, gross, including accrued interest and excluding any allowance, by credit quality indicator segregated by risk rating and year of origination as of June 30, 2024:

June 30, 2024

Fiscal year of origination

18 unchanged sentences

Information related to both lessee and lessor

The components of lease costs for the three months ended March 31, 2024 and 2023 are as follows:

The components of lease costs for the three months ended June 30, 2024 and 2023 are as follows:

Three months ended

Condensed Consolidated Statements of Operations Location

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

(Amounts in thousands)

Finance Lease:

Interest on lease liabilities

Interest expense

Operating Lease:

6 unchanged sentences

Total lease costs, net of sublease interest income

The components of lease costs for the six months ended March 31, 2024 and 2023 are as follows:

Six months ended

The components of lease costs for the nine months ended June 30, 2024 and 2023 are as follows:

Nine months ended

Condensed Consolidated Statements of Operations Location

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

(Amounts in thousands)

10 unchanged sentences

Total lease costs, net of sublease interest income

Supplemental cash flow information related to leases for the six months ended March 31, 2024 and 2023 is below:

Six months ended

March 31, 2024

March 31, 2023

Supplemental cash flow information related to leases for the nine months ended June 30, 2024 and 2023 is below:

Nine months ended

June 30, 2024

June 30, 2023

(Amounts in thousands)

5 unchanged sentences

Cash received from subleases

Lease assets obtained in exchange for new lease liabilities

Operating leases

Accounts payable and Other noncurrent liabilities

3 unchanged sentences

principal and interest.

The imputed interest rate for the agreements was determined to be 5.5 %.

As of June 30, 2024 the average imputed interest rate for the agreements was determined to be 8.2 %.

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 March 31, 2024 and 2023 was $ 35 thousand and $ 53 thousand, respectively.

Interest expense related to these agreements for the six months ended March 31, 2024 and 2023 was $ 88 thousand and $ 109 thousand, respectively.

Interest expense related to these agreements for the three months ended June 30, 2024 and 2023 was $ 52 thousand and $ 74 thousand, respectively.

Interest expense related to these agreements for the nine months ended June 30, 2024 and 2023 was $ 139 thousand and $ 185 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:

March 31, 2024

June 30, 2024

September 30, 2023

2 unchanged sentences

Other noncurrent liabilities

The Company had a total of approximately $ 2.9 million due (net of interest) to one of these vendors as of March 31, 2024.

The Company had a total of approximately $ 1.4 million due (net of interest) to one of these vendors as of June 30, 2024.

This is approximately 10 % of Accounts payable and other noncurrent liabilities.

1 unchanged sentence

This is approximately 26 % of Accounts payable and other noncurrent liabilities.

It was the same vendor as of March 31, 2024 and September 30, 2023 that only transacts with the US division of the TS segment.

It was the same vendor as of June 30, 2024 and September 30, 2023 that only transacts with the US 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.

2 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.

There was no interest expense related to the note payable for the six months ended March 31, 2024.

Interest expense related to the notes for the three and six months ended March 31, 2023 was $ 6 thousand and $ 11 thousand, respectively.

March 31, 2024

There was no interest expense related to the note payable for the nine months ended June 30, 2024.

Interest expense related to the notes for the three and nine months ended June 30, 2023 was $ 5 thousand and $ 16 thousand, respectively.

June 30, 2024

September 30, 2023

2 unchanged sentences

Note payable - current portion

As of March 31, 2024 and September 30, 2023, the Company maintained an inventory line of credit with a borrowing capacity of $ 15.0 million.

As of June 30, 2024 and September 30, 2023, 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 US to purchase inventory from approved vendors with payment terms which exceed those offered by the vendors.

2 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 March 31, 2024 and September 30, 2023, Company borrowings, all from the TS segment, under the inventory line of credit were $ 1.0

As of June 30, 2024 and September 30, 2023, Company borrowings, all from the TS segment, under the inventory line of credit were $ 0.8

million and $ 1.5 million, respectively, and the Company was in compliance with all financial covenants.

As of March 31, 2024 and September 30, 2023, this line of credit also includes availability of a limited cash withdrawal of up to $ 1.0 million.

As of March 31, 2024 and September 30, 2023 there were no cash withdrawals outstanding.

As of June 30, 2024 and September 30, 2023, this line of credit also includes availability of a limited cash withdrawal of up to $ 1.0 million.

As of June 30, 2024 and September 30, 2023 there were no cash withdrawals outstanding.

Pension and Retirement Plans

9 unchanged sentences

The components of net periodic benefit costs related to the US and UK plans are as follows:

Three Months Ended March 31,

Three Months Ended June 30,

(Amounts in thousands)

2 unchanged sentences

Amortization of past service costs

Amortization of net (gain) loss

Amortization of net gain

Net periodic (benefit) cost

3 unchanged sentences

Net periodic benefit

Six months ended March 31,

Nine months ended June 30,

(Amounts in thousands)

10 unchanged sentences

Fair Values as of

March 31, 2024

June 30, 2024

September 30, 2023

5 unchanged sentences

Total plan assets

An income tax expense of $ 135 thousand was recorded for the three months ended March 31, 2024 compared to an income tax expense of $ 71 thousand in the same period of 2023.

The estimated annualized effective income tax rate for the three months ended March 31, 2024 was 18 %, excluding the impacts of the UK entity which continues to experience losses and maintains a full valuation allowance.

An income tax benefit of $ 75 thousand was recorded for the three months ended June 30, 2024 compared to an income tax benefit of $ 1.7 million in the same period of 2023.

The estimated annualized effective income tax rate for the three months ended June 30, 2024 was 19.2 %, excluding the impacts of the UK entity which continues to experience losses and maintains a full valuation allowance, compared to the estimated annualized effective income tax rate of 51.7 % for the same period of 2023.

The difference between our effective income tax rate and the U.S.

federal statutory rate are the impact of state taxes and tax credits that we expect to be able to utilize against federal and state taxes.

The effective tax rate for the three months ended March 31, 2024 was 8 %, excluding the UK as previously mentioned, driven by excess tax benefits on restricted stock awards vesting during the period.

The income tax expense for the three months ended March 31, 2023 was primarily driven by minimum state tax expenses and the change in valuation allowance for the period.

For the three months ended March 31, 2023, we used the discrete method to arrive at tax expense due to the full valuation allowance against our deferred tax assets and cumulative loss position.

An income tax expense of $ 148 thousand was recorded for the six months ended March 31, 2024 compared to an income tax expense of $ 204 thousand in the same period of 2023.

The effective tax rate for the six months ended March 31, 2024 was 8%, excluding the UK as previously mentioned, driven by excess tax benefits on restricted stock awards vesting during the period.

The income tax expense for the six months ended March 31, 2023 was primarily driven by minimum state tax expenses and the change in valuation allowance for the period.

For the six months ended March 31, 2023, we used the discrete method to arrive at tax expense due to the full valuation allowance against our deferred tax assets and cumulative loss position.

While the Company had maintained a full valuation allowance, we had been using the discrete effective tax rate method to calculate income taxes for the purposes of quarterly reporting.

Now that the valuation allowance has been reduced, the Company has resumed using the annualized effective tax rate method to calculate income taxes as prescribed under ASC 740 and has done so for the three and six months ended March 31, 2024.

federal statutory rate for the three months ending June 30, 2024 are the impact of state taxes and tax credits that we expect to be able to utilize against federal and state taxes.

During the 3 months ending June 30, 2023, we released a significant portion of the valuation allowance against our U.S.

deferred tax assets and switched from using the discrete effective tax rate method to calculate income taxes to the annualized effective tax rate method, resulting in the shift in the effective tax rate during the period.

The effective tax rate for the three months ended June 30, 2024 was 29.3 %, excluding the UK as previously mentioned, driven by excess tax benefits on restricted stock awards vesting during the period.

The effective tax rate for the three months ended June 30, 2023 was ( 201.9 )%, excluding the UK, which was primarily driven by the release of a significant portion of the valuation allowance against our deferred tax assets in the U.S.

An income tax expense of $ 73 thousand was recorded for the nine months ended June 30, 2024 compared to an income tax benefit of $ 1.5 million in the same period of 2023.

The estimated annualized effective income tax rate for the nine months ended June 30, 2024 was 19.2 %, excluding the impacts of the UK entity which continues to experience losses and maintains a full valuation allowance, compared to the estimated annualized effective income tax rate of 22.0 % for the nine months ended June 30, 2023.

The difference between our effective income tax rate and the U.S.

federal statutory rate for the three months ending June 30, 2024 and the same period of 2023 are the impact of state taxes and tax credits that we expect to be able to utilize against federal and state taxes.

The effective tax rate for the nine months ended June 30, 2024 was 4.9 %, excluding the UK as previously mentioned, driven by excess tax benefits on restricted stock awards vesting during the period.

The effective tax rate for

the nine months ended June 30, 2023 was ( 51.4 %), excluding the UK, which was primarily driven by the release of a significant portion of the valuation allowance against our deferred tax assets in the U.S.

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 10 Pension and Retirement Plans for pension plan assets) or non-recurring basis as of March 31, 2024 or September 30, 2023.

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 March 31, 2024

As of June 30, 2024

As of September 30, 2023

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 March 31, 2024 and September 30, 2023.

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 June 30, 2024 and September 30, 2023.

Segment Information

The following tables present certain operating segment information for the three and six months ended March 31, 2024 and 2023.

The following tables present certain operating segment information for the three and nine months ended June 30, 2024 and 2023.

Technology Solutions Segment

Three months ended March 31,

Three months ended June 30,

(Amounts in thousands)

Operating income (loss)

Operating (loss) income

Interest expense

8 unchanged sentences

Technology Solutions Segment

Six months ended March 31,

Nine months ended June 30,

(Amounts in thousands)

12 unchanged sentences

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 and six months ended March 31, 2024 and 2023.

Three months ended March 31,

Six months ended March 31,

The following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three and nine months ended June 30, 2024 and 2023.

Three months ended June 30,

Nine months ended June 30,

(Amounts in millions)

1 unchanged sentence

(Amounts in millions)

Customer A above as of March 31, 2024 had a balance of $ 2.4 million, or 19 %, of accounts receivable.

One customer not listed above as of March 31, 2024 had a balance of $ 6.4 million, or 50 %, of accounts receivable.

There was no other customer with 10% or more of accounts receivable as of March 31, 2024.

There was no customer with 10% or more of accounts receivable as of September 30, 2023.

A customer not listed above had a balance of $ 5.7 million, or 58 %, of financing receivables, net and $ 7.4 million, or 65 %, as of March 31, 2024 and September 30, 2023, respectively.

A customer not listed above had a balance of $ 2.2 million, or 22 %, of financing receivables, net and $ 2.5 million, or 22 %, as of March 31, 2024 and September 30, 2023,

respectively.

A customer not listed above had a balance of $ 1.3 million, or 13 %, of financing receivables and $ 1.5 million, or 13 %, as of March 31, 2024 and September 30, 2023, respectively.

There was no other customer with 10% or more of financing receivables, net as of March 31, 2024 or September 30, 2023.

There was no customer with 10% or more of accounts receivable as of June 30, 2024 or September 30, 2023.

A customer not listed above had a balance of $ 8.0 million, or 64 %, of financing receivables, net and $ 7.4 million, or 65 %, as of June 30, 2024 and September 30, 2023, respectively.

A customer not listed above had a balance of $ 1.6 million, or 13 %, of financing receivables, net and $ 2.5 million, or 22 %, as of June 30, 2024 and September 30, 2023, respectively.

A customer not listed above had a balance of $ 1.3 million, or 10 %, of financing receivables and $ 1.5 million, or 13 %, as of June 30, 2024 and September 30, 2023, respectively.

There was no other customer with 10% or more of financing receivables, net as of June 30, 2024 or September 30, 2023.

On December 12, 2023 , the Company’s board of directors declared a cash dividend of $ 0.020 per share outstanding which was paid on January 9, 2024 to shareholders of record as of December 22, 2023 , the record date.

3 unchanged sentences

Cash dividend amounts per share in this note are adjusted retroactively for this stock split.

On May 8, 2024 , the Company’s board of directors declared a cash dividend of $ 0.030 per share outstanding which was paid on June 12, 2024 to shareholders of record as of May 24, 2024 , 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