What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-01-28 compared with 2021-10-29 · 99 added, 56 removed, 138 unchanged (53% 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 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.

This management’s discussion and analysis of financial condition as of December 31, 2021 and results of operations for the three and six months ended December 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, 2021 filed with the SEC.

Forward-Looking Statements

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Words such as “project,” “believe,” “anticipate,” “plan,” “expect,” “intend,” “may,” “should,” “will,” “would,” and similar words and expressions are intended to identify forward-looking statements.

Forward-looking statements include, without limitation, information provided regarding impact of the COVID-19 pandemic.

Forward-looking statements are not guarantees of future performance and involve uncertainties, risks, assumptions and contingencies, many of which are outside our control.

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market acceptance of our new and existing technologies, products and services;

our ability to win new business and convert any orders received to sales within the fiscal year;

our ability to win new business and convert any orders received to sales within the same fiscal year;

enforcement actions in respect of any noncompliance with laws and regulations including export control and environmental regulations and the matters that are the subject of some or all of our investigations and compliance reviews, contract and regulatory compliance matters, and actions, which if brought, could result in judgments, settlements, fines, injunctions, debarment or penalties;

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

Revenues from our Security division accounted for 53% of our total consolidated revenues for each of the six months ended December 31, 2020 and 2021.

Healthcare Division .

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

Revenues from our Healthcare division accounted for 20% and 19% of our total consolidated revenues for the six months ended December 31, 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 27% and 28% of our total consolidated revenues for the three months ended September 30, 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 six months ended December 31, 2020 and 2021, respectively.

Trends and Uncertainties

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Coronavirus Pandemic.

The coronavirus disease 2019 (“COVID-19”) pandemic has dramatically impacted the global health and economic environment, with millions of confirmed cases, business slowdowns and shutdowns, and market volatility.

The coronavirus disease 2019 (“COVID-19”) pandemic, including the emergence of new variants, has dramatically impacted the global health and economic environment, with millions of confirmed cases, business slowdowns and shutdowns, and market volatility.

The COVID-19 pandemic has caused, and is likely to continue to cause, significant economic disruptions and has impacted, and is expected to continue to impact, our operations and the operations of our suppliers, logistics providers and customers as a result of quarantines, facility closures and travel and logistics restrictions.

Our ability to continue to operate without significant negative impacts will in part depend on our ability to protect our employees and our supply chain and to keep our manufacturing facilities open and operating effectively.

We have endeavored to implement government and health authority recommendations to protect our employees worldwide.

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.

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

We have endeavored to implement government and health authority recommendations to protect our employees worldwide including with respect to vaccine administration.

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

During the early stages of the pandemic and continuing to a lesser extent throughout the duration 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.

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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.

While we have been able to broadly maintain our operations, we experienced some disruption in our supply chain in certain markets due primarily to materials shortages, longer lead times on deliveries and transportation constraints.

If these business interruptions resulting from COVID-19 were to be prolonged or expanded in scope, our business, financial condition, results of operations and cash flows would be materially and adversely impacted.

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and foreign government policies and foreign exchange fluctuations.

Global economic conditions continue to be highly volatile due to the COVID-19 pandemic, resulting in market size contractions in certain countries due to economic slowdowns and government restrictions on movement.

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.

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

We do not know how long this uncertainty will continue.

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Healthcare Considerations.

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

As described above, our Healthcare division experienced some increased demand for its patient monitoring products as a result of the COVID-19 pandemic during the earlier stages of the pandemic that has continued to a lesser extent throughout the duration of the pandemic.

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

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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.

Specifically, we are impacted by the global shortage of electronic components and other materials needed for production and freight availability.

We expect continued disruptions in obtaining material and freight availability as the world economies react to and recover from supply chain shortages.

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)

Results of Operations for the Three Months Ended December 31, 2020 (Q2 Fiscal 2021) Compared to the Three Months Ended December 31, 2021 (Q2 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 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.

Revenues for the Security division during the three months ended December 31, 2021 were relatively comparable year over year.

Our service revenues increased by approximately $3.1 million whereas our product revenues decreased by approximately $2.4 million as compared to the prior year comparable period.

Revenues for the Healthcare division during the three months ended December 31, 2021 decreased 4.5% year-over-year.

While cardiology sales increased by approximately $1.0 million and service, supplies and accessories sales increased by approximately $0.4 million, patient monitoring sales decreased by approximately $3.9 million.

Revenues for the Optoelectronics and Manufacturing division during the three months ended December 31, 2021 increased year-over year as a result of an increase in revenue in our optoelectronics business of approximately $3.2 million, offset by a reduction in revenue of approximately $0.7 million in our contract manufacturing 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.

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.

Our cost of goods sold increased year-over-year primarily as a result of the mix of revenues and higher raw material and freight costs.

Gross profit as a percentage of net revenues during the quarter ended December 31, 2021 decreased on a year-over-year basis due to (i) a reduction in the Security division gross margins due to a less favorable sales mix and increased component, freight and travel costs and (ii) reduced revenues in our Healthcare division, which carries the highest gross margin of our three divisions.

Our gross margin increased within the Optoelectronics and Manufacturing 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 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.

SG&A expense for the three months ended December 31, 2021 was lower than such expense in the same prior-year period due to a reduced provision for losses on accounts receivable coupled with certain bad debt recoveries totaling $4.9 million and other miscellaneous reductions of $1.5 million.

This decrease was offset by an increase in compensation expense of $5.2 million.

Research and development .

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

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.

The increase in R&D expense during the three months ended December 31, 2021 from the same prior-year period reflected an increase in compensation expense and outside services of approximately $1.8 million to support new product development initiatives primarily in our Security and Healthcare divisions.

This increase was partially offset by other reductions in R&D expense of approximately $0.6 million.

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.

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.

During the three months ended December 31, 2021, impairment, restructuring and other charges primarily consisted of $0.5 million for legal charges and $0.3 million in charges for employee terminations.

During the three months ended December 31, 2020, we recognized a net benefit of $0.5 million for reimbursements from our insurance carriers for covered legal charges, partially offset by additional legal fees related to class action litigation and government investigations.

This was partially offset by charges of $0.1 million for employee terminations from operational efficiency activities and $0.2 million for acquisition-related activities.

Interest and other expense, net .

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.

For the three months ended December 31, 2021, interest and other expense, net was $2.2 million as compared to $4.2 million in the same prior-year period.

This decrease was driven by our adoption of ASU 2020-06 (see Note 1 to the condensed consolidated financial statements for further discussion) and was partially offset by higher average levels of borrowing under our revolving credit facility during the three months ended December 31, 2021 in comparison with the levels of borrowing during the same period in the prior year.

Interest expense during the three months ended December 31, 2021 and 2020 included $0.1 and $2.3 million of non-cash interest expense, respectively, 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 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.

For the three months ended December 31, 2021, we recognized a provision for income taxes of $7.1 million compared to $8.1 million for the comparable prior-year period.

The effective tax rates for the three months ended December 31, 2021 and 2020 were 26.3% and 28.8%, respectively.

During each of the three month periods ended December 31, 2021 and 2020, we recognized a net discrete tax provision of $0.3 million for changes in prior year tax estimates and equity-based compensation under ASU 2016-09.

Results of Operations for the Six Months Ended December 31, 2020 (YTD Q2 Fiscal 2021) Compared to the Six Months Ended December 31, 2021 (YTD Q2 Fiscal 2022) (amounts in millions)

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

See Note 11 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 six months ended December 31, 2021 increased on a year-over-year basis.

Our product revenues increased by approximately $13.1 million, and our service revenues increased by approximately $2.3 million as compared to the prior year comparable period.

Revenues for the Healthcare division during the six months ended December 31, 2021 decreased 3% year-over-year.

While cardiology sales increased by approximately $2.4 million and service, supplies and accessories sales increased by approximately $1.6 million, patient monitoring sales decreased by approximately $7.4 million.

Revenues for the Optoelectronics and Manufacturing division during the six months ended December 31, 2021 increased year-over year as a result of an increase in revenue in our contract manufacturing business of approximately $7.9 million coupled with an increase in sales of approximately $5.1 million in our optoelectronics business.

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

Our cost of goods sold increased year-over-year primarily as a result of the increase in revenues and higher raw material and freight costs.

Gross profit as a percentage of net revenues during the six months ended December 31, 2021 decreased on a year-over-year basis due to (i) strong sales growth within our Optoelectronics and Manufacturing division (which has the lowest gross margin among our divisions), (ii) a reduction in revenues in our Healthcare division (which has the highest gross margin among our divisions), and (iii) a reduction in the Security division gross margins due to a less favorable sales mix, reduced service gross margin, and increased component, freight and travel costs.

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 six months ended December 31, 2021 was lower than such expense in the same prior-year period due to reduced provision for losses on accounts receivable coupled with certain bad debt recoveries totaling $9.2 million as well as a net benefit of $2.9 million for the change in contingent consideration.

These decreases were partially offset by an increase in employee compensation expense of $7.7 million and increased travel, entertainment, and marketing expense of $1.9 million.

Research and development .

The increase in R&D expense during the six months ended December 31, 2021 from the same prior-year period reflected higher employee compensation expenses of $4.2 million and $1.3 million in supplies and research expenses to support new product development initiatives primarily in our Security and Healthcare divisions.

This increase was partially offset by other reductions in R&D expense of approximately $1.6 million.

Impairment, restructuring and other charges (benefit).

During the six months ended December 31, 2021, impairment, restructuring and other charges of $3.3 million consisted of $2.7 million for legal charges and $0.7 million in charges for employee terminations.

During the six months ended December 31, 2020, we incurred $7.2 million for exit activities associated with an expired turnkey contract in Mexico.

Such exit costs commenced in the first quarter of the 2021 fiscal year and 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.

We also incurred costs of $1.2 million for employee terminations and facility closure costs for operational efficiency activities and $0.3 million for acquisition-related activities, partially offset by a net benefit of $0.5 million for reimbursements from our insurance carriers for covered legal charges.

Interest and other expense, net .

For the six months ended December 31, 2021, interest and other expense, net was $4.2 million as compared to $8.4 million in the comparable prior-year period.

This decrease was driven by our adoption of ASU 2020-06 (see Note 1 to the condensed consolidated financial statements for further discussion) and was partially offset by higher average levels of borrowing under our revolving credit facility during the six months ended December 31, 2021 compared to the same period in the prior year.

Interest expense during the six months ended December 31, 2021 and 2020 included $0.1 million and $4.5 million of non-cash interest expense, which was primarily related to the Notes.

Income taxes .

For the six months ended December, 2021 and 2020, we recognized a provision for income taxes of $10.7 million and $11.2 million, respectively.

The effective tax rate for the six months ended December 31, 2021 and 2020 was 21.6% and 27.7%, respectively.

During the six months ended December 31, 2021, we recognized a net discrete tax benefit of $1.8 million, which was comprised of $2.0 million related to equity-based compensation under ASU 2016-09 partially offset by a discrete tax expense for prior year tax estimates of $0.2 million.

During the six months ended December 31, 2020, we recognized a net discrete tax expense of $0.1 million related to change in prior year tax estimates of $0.4 million offset by a tax benefit of $0.3 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 $54.7 million at September 30, 2021, a decrease of $25.9 million, or 32.1%, from $80.6 million at June 30, 2021.

Cash and cash equivalents totaled $86.3 million at December 31, 2021, a increase of $5.7 million, or 7.1%, 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, 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 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.

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

We have a $750 million credit facility that is comprised of a $600 million revolving credit facility, which includes a $300 million subfacility for letters of credit, and a $150 million delayed draw term loan.

The term loan, which was undrawn as of December 31, 2021, is available to us to draw through September 1, 2022.

As of December 31, 2021, there were $81.6 million of borrowings outstanding under our revolving credit facility,and $84.2 million of outstanding letters of credit.

Cash Provided by 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 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.

During the six months ended December 31, 2021, we generated cash from operations of $3.4 million compared to $89.5 million in the same prior-year period.

This decrease was driven by increases in inventory, a decrease in the amount of advance deposits received from customers and other changes in net working capital.

Cash Used in Investing Activities .

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 $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.

Net cash used in investing activities was $15.4 million for the six months ended December 31, 2021 as compared to $20.5 million in the same prior-year period.

Capital expenditures in the six-month period ended December 31, 2021 were $7.1 million compared to $8.5 million in the same prior-year period.

Expenditures for intangible and other assets in the six-month period ended December 31, 2021 were $8.1 million compared to $7.0 million in the same prior-year period.

In addition, during the six months ended December 31, 2020, we used cash of $3.0 million for the acquisition of a business.

Cash Provided by (Used in) Financing Activities .

Net cash provided by financing activities was $17.6 million during the six months ended December 31, 2021, compared to $75.4 million used in financing activities during the same prior-year period.

The changes in cash provided by (used in) financing activities primarily relate to (i) net proceeds from borrowings on bank lines of credit totaling $81.6 million in the six month period ended December 31, 2021 compared to net repayments of borrowings of $41.0 million in the same prior-year period and (ii) $64.4 million used for share repurchases and taxes paid related to the net share settlement of equity awards in the six month period ended December 31, 2021 compared to $36.1 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 $54.7 million at September 30, 2021.

Our cash and cash equivalents totaled $86.3 million at December 31, 2021.

Of this amount, approximately 72% 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, India, Malaysia, Singapore, and Canada, and to a lesser extent in Australia, Albania and Germany among others.

These foreign funds were held primarily by our subsidiaries in the United Kingdom, Singapore, India, Malaysia and Canada and, to a lesser extent, in Australia, Albania, Indonesia and Mexico 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 September 30, 2021:

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

Maximum number (or

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under the plans or

July 1 to July 31, 2021

August 1 to August 31, 2021

September 1 to September 30, 2021

October 1 to October 31, 2021

November 1 to November 30, 2021

December 1 to December 31, 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 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.

During the six months ended December 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, 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 September 30, 2021, we did not have any significant off-balance sheet arrangements, other than those previously disclosed.

As of December 31, 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