What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-10-29 compared with 2021-04-30 · 67 added, 100 removed, 127 unchanged (57% of the section changed)

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together with our wholly-owned subsidiaries.

This management’s discussion and analysis of financial condition as of March 31, 2021 and results of operations for the three and nine months ended March 31, 2021 should be read in conjunction with management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the SEC.

This management’s discussion and analysis of financial condition as of September 30, 2021 and results of operations for the three months ended September 30, 2021 should be read in conjunction with management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 filed with the SEC.

Forward-Looking Statements

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delays in revenue recognition related to the timing of customer acceptance;

unanticipated impacts of sequestration and other U.S.

Government budget control provisions;

changes in domestic and foreign government spending, budgetary, procurement and trade policies adverse to our businesses;

global economic uncertainty;

impacts on our business related to or resulting from the COVID-19 pandemic;

impacts on our business related to or resulting from the COVID-19 pandemic such as material delays and cancellations of orders or deliveries thereon, supply chain disruptions, plant closures, or other adverse impacts on our ability to execute business plans ;

unfavorable currency exchange rate fluctuations;

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and other risks and uncertainties, including but not limited to those detailed herein and from time to time in our other SEC filings, which could have a material and adverse impact on our business, financial condition and results of operation.

Many of the referenced risks could be amplified by the magnitude and duration of the COVID-19 pandemic.

All forward-looking statements contained in this report are qualified in their entirety by this statement.

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(a) Security, providing security and inspection systems and turnkey security screening solutions;

(b) Healthcare, providing patient monitoring, diagnostic cardiology and connected care systems and related supplies and accessories;

(b) Healthcare, providing patient monitoring, diagnostic cardiology and connected care systems and associated accessories;

and (c) Optoelectronics and Manufacturing, providing specialized electronic components for our Security and Healthcare divisions, as well as to third parties for applications in the defense and aerospace markets, among others.

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These products and services are used to inspect baggage, parcels, cargo, people, vehicles and other objects for weapons, explosives, drugs, radioactive and nuclear materials and other contraband.

Revenues from our Security division accounted for 65% and 53% of our total consolidated revenues for the nine months ended March 31, 2020 and 2021, respectively.

We were impacted by the COVID-19 pandemic as discussed in the “Trends and Uncertainties-Coronavirus Pandemic” section below.

Revenues from our Security division accounted for 53% and 54% of our total consolidated revenues for the three months ended September 30, 2020 and 2021, respectively.

Healthcare Division .

Through our Healthcare division, we design, manufacture, market and service patient monitoring, diagnostic cardiology and connected care systems and related supplies and accessories globally for sale primarily to hospitals and medical centers.

Through our Healthcare division, we design, manufacture, market and service patient monitoring, diagnostic cardiology and connected care systems globally for sale primarily to hospitals and medical centers.

Our products monitor patients in critical, emergency and perioperative care areas of the hospital and provide information, through wired and wireless networks, to physicians and nurses who may be at the patient’s bedside, in another area of the hospital or even outside the hospital.

Revenues from our Healthcare division accounted for 14% and 20% of our total consolidated revenues for the nine months ended March 31, 2020 and 2021, respectively.

Revenues from our Healthcare division accounted for 20% and 18% of our total consolidated revenues for the three months ended September 30, 2020 and 2021, respectively.

Optoelectronics and Manufacturing Division .

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We provide our optoelectronic devices and electronics manufacturing services to OEM customers and to our own Security and Healthcare divisions.

Revenues from external customers in our Optoelectronics and Manufacturing division accounted for 21% and 27% of our total consolidated revenues for the nine months ended March 31, 2020 and 2021, respectively.

Revenues from external customers in our Optoelectronics and Manufacturing division accounted for 27% and 28% of our total consolidated revenues for the three months ended September 30, 2020 and 2021, respectively.

Trends and Uncertainties

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While we do not expect these pandemic-related impacts to be long-term, there is substantial uncertainty regarding the duration and ultimate impact of the COVID-19 pandemic.

Our Healthcare division has experienced increased demand for certain products as a result of COVID-19.

In our Security division, during the latter part of fiscal 2020 and in fiscal 2021, receipt of certain orders was delayed, most notably with respect to our aviation and cargo products, and our service revenues were adversely impacted as a result of the pandemic.

During the first nine months of fiscal 2021, bookings accelerated, but as many of our customers in our Security division are being impacted by the pandemic we have received and could receive further requests to delay deliveries of equipment and modify service arrangements or the scheduling of factory or site acceptance tests, which could impact timing of revenue recognition.

During the early stages of the pandemic, our Healthcare division experienced increased demand for certain products as a result of COVID-19.

In our Security division, throughout the pandemic, receipt of certain orders has been delayed, most notably with respect to our aviation and cargo products, and our revenues have been adversely impacted as a result of the pandemic.

As many customers of our Security division continue to be impacted by the pandemic, we have received and could receive further requests to delay deliveries of equipment and modify service arrangements or the scheduling of factory or site acceptance tests, which has impacted, and could further impact, timing of revenue recognition.

In addition, as a result of COVID-19 related government regulations, certain of our global manufacturing facilities have had to limit operations and might have to limit operations in the future.

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Global Economic Considerations.

In addition to the COVID-19 pandemic, other global macroeconomic factors, coupled with the U.S.

Our products and services are sold in numerous countries worldwide, with a large percentage of our sales generated outside the United States.

Therefore, we are exposed to and impacted by global macroeconomic factors, U.S.

and foreign government policies and foreign exchange fluctuations.

In addition to the COVID-19 pandemic, these other global macroeconomic factors, coupled with the U.S.

political climate, have created uncertainty and impacted demand for certain of our products and services.

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Healthcare Considerations.

As described above, our Healthcare division has experienced increased demand for its patient monitoring products as a result of the COVID-19 pandemic.

Increased healthcare capital purchases made in prior periods may result in fewer capital purchases during the balance of fiscal 2021 and subsequent periods.

The pandemic may also impact our ability to manufacture products needed to timely fill orders if we experience supply chain disruptions or need to close any manufacturing facility due to employee COVID-19 cases or local government regulations.

As described above, our Healthcare division experienced some increased demand for its patient monitoring products as a result of the COVID-19 pandemic.

Increased healthcare capital purchases made in prior periods may result in fewer capital purchases in subsequent periods.

The pandemic may also impact our ability to manufacture product needed to timely fill orders if we experience supply chain disruptions or need to close any manufacturing facility due to employee COVID-19 cases or local government regulations.

European Union Threat Detection Standards.

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The deadline for compliance with this mandate was initially set for September 2020.

Given the uncertainty surrounding the COVID-19 situation, the EU revised the regulations, and the date whereby airports using explosive detection systems for hold baggage screening must meet Standard 3 has been changed to March 2024, with certain larger airports required to meet earlier installation dates.

Given the uncertainty surrounding the COVID-19 pandemic, the EU revised the regulations, and the date by which airports using explosive detection systems for hold baggage screening must meet Standard 3 has been changed to March 2024, with certain larger airports required to meet earlier installation dates.

Our Security division’s real time tomography (RTT) product has passed the ECAC explosive detection system Standard 3 threat detection requirement.

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and foreign government policies to manage the COVID-19 pandemic, such as travel restrictions or site closures.

Results of Operations for the Three Months Ended March 31, 2020 (Q3 2020) Compared to the Three Months Ended March 31, 2021 (Q3 2021) (amounts in millions)

Changes in Costs and Supply Chain Disruptions.

Our costs are subject to fluctuations, particularly due to changes in raw material, component, and logistics costs.

Our manufacturing and supply chain operations, including freight and shipping activities, have been and may continue to be impacted by increased vendor costs as well as the current global supply chain bottleneck.

This increased cost environment has been exacerbated by the COVID-19 pandemic.

Although we strive to implement, achieve, and sustain cost containment measures, including supply chain optimization and general overhead and workforce optimization, if we are unable to mitigate the impact of increased costs through pricing or other actions, there could be a negative impact on our business, results of operations, and financial condition.

Results of Operations for the Three Months Ended September 30, 2020 (Q1 Fiscal 2021) Compared to the Three Months Ended September 30, 2021 (Q1 Fiscal 2022) (amounts in millions)

The table below and the discussion that follows are based upon the way in which we analyze our business.

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Total net revenues

Revenues for the Security division during the three months ended March 31, 2021 continued to be impacted by the COVID-19 pandemic most notably in our aviation and cargo businesses, as we experienced delays in the timing of delivery and installation of equipment and related services, as well as the timing of receipt of new orders.

Our cargo business revenues decreased by $17.4 million.

We also experienced a decrease in revenues of $15.8 million associated with the expiration of a contract in Mexico in June 2020.

Revenues for the Healthcare division during the three months ended March 31, 2021 increased year-over-year due to higher sales of $8.3 million attributable to patient monitoring systems and cardiology equipment and related service revenue.

Revenues for the Optoelectronics and Manufacturing division during the three months ended March 31, 2021 increased year-over-year as a result of higher revenue of $14.6 million from our contract manufacturing business and $3.6 million from our optoelectronics business.

Revenues for the Security division during the three months ended September 30, 2021 increased 11% year over year.

Our product revenues increased by approximately $16 million as compared to the prior year comparable period where revenues were more adversely impacted by the COVID-19 pandemic.

In addition, our service revenues decreased by approximately $1 million.

Revenues for the Healthcare division during the three months ended September 30, 2021 were relatively comparable year-over-year.

Cardiology sales increased by approximately $2 million and service, supplies and accessories sales increased by approximately $1 million, while patient monitoring sales decreased by approximately $4 million.

Revenues for the Optoelectronics and Manufacturing division during the three months ended September 30, 2021 increased year-over year as a result of an increase in revenue in our contract manufacturing business of approximately $9 million and an increase in revenue of approximately $2 million in our optoelectronics business.

Gross profit is impacted by sales volume, productivity, and changes in overall manufacturing-related costs, such as raw materials and component costs, warranty expense, provision for inventory, freight, and logistics.

The overall decrease in gross profit resulted from decreased revenues in the Security division, mitigated by higher sales in our Healthcare and Optoelectronics and Manufacturing divisions.

There were no significant changes in overall manufacturing-related costs.

Gross profit as a percentage of net revenues during the three months ended March 31, 2021 decreased on a year-over-year basis due to (i) a reduced gross margin within the Optoelectronics and Manufacturing division due to a less favorable sales mix, and (ii) an increase in Optoelectronics and Manufacturing revenues as a percentage of total net revenues, which inherently carries the lowest gross margin of each of the divisions.

This was somewhat offset by an improved gross margin in our Healthcare division as a result of the benefit of economies of scale associated with increased sales, combined with operating efficiencies.

Our cost of goods sold increased year-over-year primarily as a result of the change in revenues.

Gross profit as a percentage of net revenues during the quarter ended September 30, 2021 decreased on a year-over-year basis due to (i) an increase in revenues in the Optoelectronics and Manufacturing division (which has the lowest gross margin among our divisions) as a percentage of total net revenues, and (ii) a reduction in the Optoelectronics and Manufacturing and Security division gross margins due to a less favorable sales mix and increased component, freight and travel costs.

Our gross margin increased within the Healthcare division due to a more favorable sales mix.

Operating Expenses

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Our significant selling, general and administrative (SG&A) expenses include employee compensation, sales commissions, travel, professional services, marketing expenses, and depreciation and amortization expense.

SG&A expense for the three months ended March 31, 2021 decreased as compared to the same prior-year period due to reduced travel and entertainment and marketing expenses of $2.0 million and $2.1 million, respectively, resulting from the COVID-19 pandemic, lower employee compensation of $1.3 million, decreased third-party sales commissions of $1.5 million, and a reduction in the provision for bad debt of $1.0 million.

SG&A expense for the three months ended September 30, 2021 decreased as compared to the same prior-year period due to a reduced provision for losses on accounts receivable of $4.3 million.

This decrease was offset by an increase in compensation expense of $2.5 million and increased travel expense of $0.9 million.

Research and development .

Research and development (R&D) expenses include research related to new product development and product enhancements.

The decrease in R&D expenses during the three months ended March 31, 2021 from the same prior-year period reflected lower materials and supplies consumed in research activities of $1.0 million and a decrease in travel expenses of $0.3 million resulting from the COVID-19 pandemic.

The increase in R&D expense during the three months ended September 30, 2021 from the same prior-year period reflected an increase in compensation expense and outside services of approximately $3 million to support new product development initiatives primarily in our Security and Healthcare divisions.

Impairment, restructuring and other charges.

Impairment, restructuring and other charges generally consist of charges relating to reductions in our workforce, facilities consolidation, impairment of assets, costs related to acquisition activity, legal charges and other non-recurring charges.

The net benefit in the three months ended March 31, 2021 consisted of ($0.7) million benefit for net reimbursements from our insurance carriers for covered legal charges, a $0.2 million charge for employee terminations from operational efficiency activities, and a $0.2 million charge for facility closure and operational efficiency activities.

The net expense in the three months ended March 31, 2020 included $3.3 million from impairment of assets in our Healthcare division for the exit of a product line, $1.1 million of employee termination and facility closure costs, and $0.1 million of other net costs.

During the three months ended September 30, 2021, impairment, restructuring and other charges consisted of $2.2 million for legal charges, $0.3 million in charges for employee terminations from operational efficiency activities, and an insignificant net benefit for facility closure and operational efficiency activities.

During the three months ended September 30, 2020, we commenced exit activities associated with a turnkey contract in Mexico whereby we incurred non-recurring charges totaling $6.9 million comprised of exit costs of $2.5 million for employee terminations, facility closure and other exit costs of $1.1 million, direct transaction costs of $2.7 million and impairment of a right-of-use asset of $0.6 million.

We also conducted other operational efficiency activit i es which resulted in employee termination and other costs of $1.5 million.

Interest and other expense, net .

For the three months ended March 31, 2021, interest and other expense, net was $4.2 million as compared to $4.7 million in the comparable prior-year period.

This decrease was driven most significantly by lower average levels of borrowing under our revolving credit facility as well as lower average interest rates during the three months ended March 31, 2021 compared to the same period in the prior year.

Interest expense included $2.2 million of non-cash interest expense primarily related to the Notes during each of the three months ended March 31, 2021 and 2020 (see Note 8 to the condensed consolidated financial statements for further discussion).

For the three months ended September 30, 2021, interest and other expense, net was $2.0 million as compared to $4.2 million in the comparable prior-year period.

This decrease was driven most significantly by our adoption of ASU 2020-06 (see Note 1 to the condensed consolidated financial statements for further discussion) and, to a lesser extent, lower average levels of borrowing under our revolving credit facility during the three months ended September 30, 2021 compared to the same period in the prior year.

Interest expense during the three months ended September 30, 2020 included $2.2 million of non-cash interest expense, which was primarily related to the Notes.

Income taxes .

The effective tax rate for a particular period varies depending on a number of factors, including (i) the mix of income earned in various tax jurisdictions, each of which applies a unique range of income tax rates and income tax credits, (ii) changes in previously established valuation allowances for deferred tax assets (changes are based upon our current analysis of the likelihood that these deferred tax assets will be realized), (iii) the level of non-deductible expenses, (iv) certain tax elections (v) tax holidays granted to certain of our international subsidiaries and (vi) discrete tax items.

For the three months ended March 31, 2021, we recognized a provision for income taxes of $9.5 million compared to a benefit for income taxes of $(0.6) million for the comparable prior-year period.

The effective tax rates for the three months ended March 31, 2021 and 2020 were 33.7% and (3.4)%, respectively.

During the three months ended March 31, 2021, we recognized a net discrete tax expense of $2.2 million for return-to-provision true-up adjustments of $2.4 million, offset by a discrete tax benefit of ($0.2) million for equity-based compensation under ASU 2016-09.

During the three months ended March 31, 2020, we recognized a discrete tax benefit of ($5.1) million for a return-to-provision true-up adjustment.

Results of Operations for the Nine Months Ended March 31, 2020 (YTD Q3 2020) Compared to the Nine Months Ended March 31, 2021 (YTD Q3 2021) (amounts in millions)

The table below and the discussion that follows are based upon the way in which we analyze our business.

See Note 12 to the condensed consolidated financial statements for additional information about our business segments.

Optoelectronics and Manufacturing

Total net revenues

Revenues for the Security division during the nine months ended March 31, 2021 decreased on a year-over-year basis due to the continued impact of the COVID-19 pandemic, most notably in our aviation and cargo businesses, as we experienced delays in the timing of delivery and installation of equipment and related services, as well as the timing of receipt of new orders.

Our cargo business revenues decreased by $67 million and advanced security screening business revenues decreased by $34 million.

We also experienced a decrease in revenues of approximately $50 million associated with the expiration of a contract in Mexico in June 2020.

Revenues for the Healthcare division during the nine months ended March 31, 2021 increased year-over-year due to increased sales of patient monitoring systems, cardiology equipment and related supplies and accessories totaling approximately $32 million.

Revenues for the Optoelectronics and Manufacturing division during the nine months ended March 31, 2021 increased year-over year as a result of an increase in revenue in our contract manufacturing business of approximately $32 million coupled with an increase in sales of approximately $8 million in our optoelectronics business, which includes a $7 million increase in revenues from a small business acquired in February 2020.

The overall decrease in gross profit was driven by the decrease in revenues for the Security division which was somewhat mitigated by higher sales in our Healthcare and Optoelectronics and Manufacturing divisions.

There were no significant changes in manufacturing-related costs.

Gross profit as a percentage of net revenues during the nine months ended March 31, 2021 increased on a year-over-year basis due to (i) an improved gross margin in our Healthcare division (which has the highest gross margin among our divisions) as a result of the benefit of economies of scale associated with increased sales, combined with operating efficiencies, (ii) increase in Healthcare revenue as a percentage of total net revenues, and (iii) an increase in service gross margin in our Security division.

Our gross margin decreased within the Optoelectronics and Manufacturing division due to a less favorable sales mix.

Operating Expenses

Selling, general and administrative

Research and development

Impairment, restructuring and other charges (benefit), net

Total operating expenses

Selling, general and administrative .

SG&A expense for the nine months ended March 31, 2021 decreased as compared to the same prior-year period due to reduced travel and entertainment and marketing expenses of $6.8 million and $3.4 million, respectively, due to the COVID-19 pandemic, decreased third-party sales commissions of $6.5 million, and reduced employee compensation expense of $4.8 million resulting from implementation of cost containment measures.

These decreases were offset by an increase in the provision for loss on accounts receivable of $3.5 million.

Research and development .

The decrease in R&D expense during the nine months ended March 31, 2021 from the same prior-year period reflected lower employee compensation expenses of $1.9 million, a decrease in materials and supplies consumed in research activities of $1.8 million, and reduced travel expenses of $1.0 million due to the COVID-19 pandemic.

Impairment, restructuring and other charges (benefit).

During the nine months ended March 31, 2021, we incurred $7.2 million for exit activities associated with an expired turnkey contract in Mexico.

Such exit costs include $2.8 million for employee terminations, $1.1 million for facility closure and other exit costs, direct transaction costs of $2.7 million, and $0.6 million for right-of-use asset impairment for a leased facility.

We also incurred costs of $1.6 million for other employee terminations and facility closure costs for operational efficiency activities and $0.3 million for acquisition-related activities.

This was offset by a net benefit of ($1.2) million for reimbursements from our insurance carriers for covered legal charges.

During the nine months ended March 31, 2020, we incurred impairment, restructuring and other charges, net of $3.3 million related to the exit of a product line in our Healthcare division, $1.6 million of employee termination and facility closure costs, and $0.3 million of acquisition costs, which were offset by a net recovery of $3.7 million for certain legal costs through insurance reimbursements.

Other Income and Expenses

Interest and other expense, net .

For the nine months ended March 31, 2021, interest and other expense, net was $12.6 million as compared to $14.3 million in the comparable prior-year period.

This decrease was driven by lower average levels of borrowing under our revolving credit facility as well as lower average interest rates during the nine months ended March 31, 2021 compared to the same period in the prior year.

Interest expense included $6.7 million and $6.6 million of non-cash interest expense during the nine months ended March 31, 2021 and 2020, respectively, mainly related to the Notes (see Note 8 to the condensed consolidated financial statements for further discussion).

Income taxes .

For the nine months ended March 31, 2021 and 2020, we recognized a provision for income taxes of $20.8 million and $5.9 million, respectively.

The effective tax rate for the nine months ended March 31, 2021 and 2020 was 30.1% and 8.7%, respectively.

During the nine months ended March 31, 2021, we recognized a net discrete tax expense of $2.3 million for return-to-provision true-up adjustments of $2.8 million, offset by a ($0.5) million tax benefit from equity-based compensation under ASU 2016-09.

During the nine months ended March 31, 2020, we recognized a discrete tax benefit of $12.0 million for equity-based compensation under ASU 2016-09 of $6.8 million and a return to provision true-up adjustment of $5.2 million.

For the three months ended September 30, 2021, we recognized a provision for income taxes of $3.6 million compared to $3.2 million for the comparable prior-year period.

The effective tax rates for the three months ended September 30, 2021 and 2020 were 15.9% and 25.3%, respectively.

During the three months ended September 30, 2021, we recognized a net discrete tax benefit of $2.1 million compared to $0.3 million in the prior year for equity-based compensation under ASU 2016-09.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents, cash generated from operations and our credit facilities.

Cash and cash equivalents totaled $92.5 million at March 31, 2021, an increase of $16.4 million, or 21.5%, from $76.1 million at June 30, 2020.

Cash and cash equivalents totaled $54.7 million at September 30, 2021, a decrease of $25.9 million, or 32.1%, from $80.6 million at June 30, 2021.

We currently anticipate that our available funds, credit facilities and cash flow from operations will be sufficient to meet our operational cash needs for the next 12 months and the foreseeable future.

In addition, we anticipate that cash generated from operations, without repatriating earnings from our non-U.S.

subsidiaries, will be sufficient to satisfy our obligations in the U.S.

subsidiaries, and our credit facility will be sufficient to satisfy our obligations in the U.S.

We have a five-year revolving credit facility that allows us to borrow up to $535 million.

As of March 31, 2021, there were no borrowings outstanding under the revolving credit facility and letters of credit outstanding totaled $66.7 million.

Cash Provided by Operating Activities.

As of September 30, 2021, there were $26.0 million of borrowings outstanding under the revolving credit facility and letters of credit outstanding totaled $79.4 million.

Cash Provided by (Used in) Operating Activities.

Cash flows from operating activities can fluctuate significantly from period to period, as net income, adjusted for non-cash items, and working capital fluctuations impact cash flows.

During the nine months ended March 31, 2021, we generated cash from operations of $131.1 million compared to $105.6 million in the same prior-year period.

This increase was driven by favorable changes in net working capital.

During the three months ended September 30, 2021, we used cash in operations of $11.0 million compared to generating $53.8 million in the same prior-year period.

This decrease was driven by increases in inventory, lower collections of accounts receivable and customer advances and other changes in net working capital.

Cash Used in Investing Activities .

Net cash used in investing activities was $26.2 million for the nine months ended March 31, 2021 as compared to $28.3 million in the same prior-year period.

During the nine months ended March 31 2021, we used cash of $3.0 million for the acquisition of a business.

Capital expenditures in the nine month period ended March 31, 2021 were $11.2 million compared to $16.1 million in the same prior-year period.

Expenditures for intangible and other assets in the nine month period ended March 31, 2021 were $9.9 million compared to $8.8 million in the same prior-year period.

Purchases of certificates of deposit in the nine month period ended March 31, 2021 were $4.8 million while there were none in the same prior-year period.

Net cash used in investing activities was $7.8 million for the three months ended September 30, 2021 as compared to $12.3 million in the same prior-year period.

Capital expenditures in the three-month period ended September 30, 2021 were $3.5 million compared to $3.8 million in the same prior-year period.

Expenditures for intangible and other assets in the three-month period ended September 30, 2021 were $4.3 million compared to $4.4 million in the same prior-year period.

In addition, during the three months ended September 30, 2020, we used cash of $3.0 million for the acquisition of a business.

Cash Used in Financing Activities .

Net cash used in financing activities was $91.4 million during the nine months ended March 31, 2021, compared to $68.5 million during the same prior-year period.

The significant changes in cash used in financing activities relate to (i) net repayments of borrowings on bank lines of credit totaling $59.0 million in the nine month period ended March 31, 2021 compared to net borrowings of $7.0 million in the same prior-year period and (ii) $36.6 million used for share repurchases and taxes paid related to the net share settlement of equity awards in the nine month period ended March 31, 2021 compared to $78.5 million for the same prior-year period.

Net cash used in financing activities was $7.2 million during the three months ended September 30, 2021, compared to $41.8 million during the same prior-year period.

The changes in cash used in financing activities primarily relate to (i) net proceeds from borrowings on bank lines of credit totaling $26.0 million in the three month period ended September 30, 2021 compared to net repayments of borrowings of $8.0 million in the same prior-year period and (ii) $34.8 million used for share repurchases and taxes paid related to the net share settlement of equity awards in the three month period ended September 30, 2021 compared to $35.7 million for the same prior-year period.

See Note 7 to the condensed consolidated financial statements for a detailed discussion regarding our revolving credit facility and our Notes.

Cash Held by Foreign Subsidiaries

Our cash and cash equivalents totaled $92.5 million at March 31, 2021.

Our cash and cash equivalents totaled $54.7 million at September 30, 2021.

Of this amount, approximately 83% was held by our foreign subsidiaries and subject to repatriation tax considerations.

These foreign funds were held primarily by our subsidiaries in the United Kingdom, Malaysia, Canada, Singapore and India and to a lesser extent in Puerto Rico and Albania among other countries.

These foreign funds were held primarily by our subsidiaries in the United

Kingdom, India, Malaysia, Singapore, and Canada, and to a lesser extent in Australia, Albania and Germany among others.

We intend to permanently reinvest certain earnings from foreign operations, and we currently do not anticipate that we will need this cash in foreign countries to fund our U.S.

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Issuer Purchases of Equity Securities

The following table contains information about the shares of common stock we purchased during the quarter ended March 31, 2021:

The following table contains information about the shares of common stock we purchased during the quarter ended September 30, 2021:

Maximum number (or

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under the plans or

January 1 to January 31, 2021

February 1 to February 28, 2021

March 1 to March 31, 2021

July 1 to July 31, 2021

August 1 to August 31, 2021

September 1 to September 30, 2021

(1) In April 2020, the Board of Directors authorized a share repurchase program of up to 1,000,000 shares of common stock.

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Contractual Obligations

During the nine months ended March 31, 2021, there were no material changes outside the ordinary course of business to the information regarding specified contractual obligations contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

During the three months ended September 30, 2021, there were no material changes outside the ordinary course of business to the information regarding specified contractual obligations contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.

See Notes 1, 5, 7 and 9 to the condensed consolidated financial statements for additional information regarding our contractual obligations.

Off-Balance Sheet Arrangements

As of March 31, 2021, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4) of Regulation S-K.

As of September 30, 2021, we did not have any significant off-balance sheet arrangements, other than those previously disclosed.

Recent Accounting Pronouncements

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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 2. Management’s Discussion and Analysis