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Item 2. Management’s Discussion and Analysis

2022-04-29 compared with 2022-01-28 · 75 added, 65 removed, 172 unchanged (45% 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 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.

This management’s discussion and analysis of financial condition as of March 31, 2022 and results of operations for the three and nine months ended March 31, 2022 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 include, without limitation, information provided regarding impact of the COVID-19 pandemic and the Russia-Ukraine conflict.

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

the impact of the Russia-Ukraine conflict, including the potential for broader economic disruption;

global economic uncertainty;

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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% of our total consolidated revenues for each of the six months ended December 31, 2020 and 2021.

Revenues from our Security division accounted for 53% and 54% of our total consolidated revenues for the nine months ended March 31, 2021 and 2022, respectively.

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 19% of our total consolidated revenues for the six months ended December 31, 2020 and 2021, respectively.

Revenues from our Healthcare division accounted for 20% and 18% of our total consolidated revenues for the nine months ended March 31, 2021 and 2022, 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 six months ended December 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 nine months ended March 31, 2021 and 2022, respectively.

Trends and Uncertainties

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

Also, the invasion of Ukraine by Russia and the sanctions imposed in response to this conflict have increased global economic and political uncertainty.

While the impact of these factors remains uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition or results of operations.

We do not know how long this uncertainty will continue.

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

Further, in February 2022, Russian forces invaded Ukraine, and in response, the member countries of NATO initiated a variety of sanctions and export controls targeting Russia and associated entities, which has also disrupted our ability to obtain material and freight availability.

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 December 31, 2020 (Q2 Fiscal 2021) Compared to the Three Months Ended December 31, 2021 (Q2 Fiscal 2022) (amounts in millions)

Russia's Invasion of Ukraine.

The invasion of Ukraine by Russia and the sanctions imposed in response to this conflict have increased global economic and political uncertainty.

We have certain research and development activities within Ukraine for our Healthcare division which have been somewhat impacted.

Results of Operations for the Three Months Ended March 31, 2021 (Q3 Fiscal 2021) Compared to the Three Months Ended March 31, 2022 (Q3 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 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.

Revenues for the Security division during the three months ended March 31, 2022 increased year-over-year due to an increase in product and service revenues of approximately $5.4 million and $1.8 million, respectively.

Revenues for the Healthcare division during the three months ended March 31, 2022 decreased 3.3% year-over-year.

While cardiology sales increased by approximately $2.8 million and service, supplies and accessories sales increased by approximately $0.9 million, patient monitoring sales decreased by approximately $5.5 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.

Revenues for the Optoelectronics and Manufacturing division during the three months ended March 31, 2022 increased year-over year as a result of an increase in revenue in our optoelectronics business of approximately $2.3 million, offset by a reduction in revenue of approximately $1.0 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 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.

Gross profit as a percentage of net revenues during the quarter ended March 31, 2022 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.

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 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.

SG&A expense for the three months ended March 31, 2022 was comparable to such expense in the same prior-year period and included increased marketing expenses of $2.3 million offset by decreases in compensation expense of $1.0 million and other miscellaneous expenses of $1.4 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 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.

The increase in R&D expense during the three months ended March 31, 2022 compared to the same prior-year period was primarily due to increases in compensation expense of approximately $1.0 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.

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.

During the three months ended March 31, 2022, impairment, restructuring and other charges primarily consisted of $0.8 million for legal charges, $0.4 million in charges for employee terminations, and $0.3 million in acquisition related costs.

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.

Other income.

For the three months ended March 31, 2022, other income was $27.4 million, driven by the gain on sale of property and equipment primarily from the sale of corporate owned real estate in a sale leaseback transaction of the Hawthorne Property in March 2022.

Interest and other expense, net .

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

For the three months ended March 31, 2022, interest and other expense, net was $2.3 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 interest rates and average levels of borrowing under our revolving credit facility during the three months ended March 31, 2022 in comparison with the levels of borrowing during the same period in the prior year.

Interest expense during the three months ended March 31, 2022 and 2021 included $0.2 and $2.2 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 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)

For the three months ended March 31, 2022, we recognized a provision for income taxes of $10.8 million compared to $9.5 million for the comparable prior-year period.

The effective tax rates for the three months ended March 31, 2022 and 2021 were 20.1% and 33.7%, respectively.

During the three month periods ended March 31, 2022, we recognized a net discrete tax benefit of $0.2 million related to equity-based compensation under ASU 2016-09 and changes in prior year tax estimates.

During the three months ended March 31, 2021, we recognized a net discrete tax expense of $2.2 million for changes in prior year tax estimates of $2.4 million, offset by a discrete tax benefit of ($0.2) million for equity-based compensation under ASU 2016-09.

Results of Operations for the Nine Months Ended March 31, 2021 (YTD Q3 Fiscal 2021) Compared to the Nine Months Ended March 31, 2022 (YTD Q3 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 six months ended December 31, 2021 increased on a year-over-year basis.

Revenues for the Security division during the nine months ended March 31, 2022 increased on a year-over-year basis.

Our product revenues increased by approximately $18.7 million, and our service revenues increased by approximately $4.0 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.

Revenues for the Healthcare division during the nine months ended March 31, 2022 decreased 3% year-over-year.

While cardiology sales increased by approximately $5.2 million and service, supplies and accessories sales increased by approximately $2.5 million, patient monitoring sales decreased by approximately $12.9 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.

Revenues for the Optoelectronics and Manufacturing division during the nine months ended March 31, 2022 increased year-over year as a result of an increase in revenue in our contract manufacturing business of approximately $6.8 million coupled with an increase in sales of approximately $7.4 million in our optoelectronics business.

Gross profit was comparable with the prior year on a 3.9% increase in sales as result of a reduced gross margin driven by the mix of sales and increased costs.

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.

Gross profit as a percentage of net revenues during the nine months ended March 31, 2022 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 increased component and freight costs, a less favorable sales mix and a reduced service gross margin.

Operating Expenses

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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.

SG&A expense for the nine months ended March 31, 2022 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 $10.0 million as well as a net benefit of $3.0 million for the change in contingent consideration and other miscellaneous reductions of approximately $1.2 million.

These decreases were partially offset by an increase in employee compensation expense of $6.7 million, increased travel and entertainment of $2.5 million and increased marketing expenses of $2.8 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.

The increase in R&D expense during the nine months ended March 31, 2022 from the same prior-year period was primarily due to higher employee compensation and outside services expenses of $5.2 million and $0.8 million, respectively, to support new product development initiatives primarily in our Security and Healthcare divisions.

This increase was partially offset by reductions in supplies and other expenses of approximately $0.9 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.

During the nine months ended March 31, 2022, impairment, restructuring and other charges of $4.8 million consisted of $3.5 million for legal charges, $1.0 million in charges for employee terminations, $0.3 million in acquisition related costs.

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 included $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.

Other income.

For the nine months ended March 31, 2022, other income was $27.4 million, driven by the gain on sale of property and equipment primarily from the sale of corporate owned real estate in a sale leaseback transaction of the Hawthorne Property in March 2022.

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.

For the nine months ended March 31, 2022, interest and other expense, net was $6.5 million as compared to $12.6 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 nine months ended March 31, 2022 compared to the same period in the prior year.

Interest expense during the nine months ended March 31, 2022 and 2021 included $0.3 million and $6.7 million, respectively, 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.

For the nine months ended March 31, 2022 and 2021, we recognized a provision for income taxes of $21.4 million and $20.8 million, respectively.

The effective tax rate for the nine months ended March 31, 2022 and 2021 was 20.8% and 30.1%, respectively.

During the nine months ended March 31, 2022, we recognized a net discrete tax benefit of $2.0 million related to equity-based compensation under ASU 2016-09.

During the nine months ended March 31, 2021, we recognized a net discrete tax expense of $2.3 million for changes in prior year tax estimates of $2.8 million, offset by a ($0.5) million tax benefit from 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 $86.3 million at December 31, 2021, a increase of $5.7 million, or 7.1%, from $80.6 million at June 30, 2021.

Cash and cash equivalents totaled $83.3 million at March 31, 2022, an increase of $2.7 million, or 3.3%, 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.

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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.

The term loan is available to us to draw through September 1, 2022.

As of March 31, 2022, there was $73.0 million outstanding under our revolving credit facility, $85.2 million of outstanding letters of credit, and $50 million outstanding under the term loan.

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 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.

During the nine months ended March 31, 2022, we generated cash from operations of $41.8 million compared to $131.1 million in the same prior-year period.

This decrease was driven by increases in inventory, decreases in accounts payable and 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 $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.

Net cash used in investing activities was $6.6 million for the nine months ended March 31, 2022 as compared to $26.2 million in the same prior-year period.

The decrease in cash used in investing activities was driven primarily by $32 million of proceeds for the sale of corporate owned real estate in a sale leaseback transaction of the Hawthorne Property.

Cash used to acquire businesses was $14.1 million during the nine-month period ended March 31, 2022 compared to $3.0 million in the prior year.

Capital expenditures in the nine-month period ended March 31, 2022 were $10.3 million compared to $11.2 million in the same prior-year period.

Expenditures for intangible and other assets in the nine-month period ended March 31, 2022 were $12.3 million compared to $9.9 million in the same prior-year period.

In addition, purchases of certificates of deposit in the nine-month period ended March 31, 2022 were $2.2 million compared to $4.8 million in the same prior-year period.

Cash Used in Financing Activities .

Net cash used in financing activities was $30.9 million during the nine months ended March 31, 2022, compared to $91.4 million during the same prior-year period.

The changes in cash used in financing activities primarily relate to (i) net proceeds from borrowings on term loan of $50.0 million and bank lines of credit totaling $73.0 million in the nine month period ended March 31, 2022 compared to net repayments of borrowings of $59.0 million in the same prior-year period and (ii) $116.2 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, 2022 compared to $36.6 million for the same prior-year period.

See Note 8 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 $86.3 million at December 31, 2021.

Our cash and cash equivalents totaled $83.3 million at March 31, 2022.

Of this amount, approximately 79% was held by our foreign subsidiaries and subject to repatriation tax considerations.

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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 December 31, 2021:

The following table contains information about the shares of common stock we purchased during the quarter ended March 31, 2022:

Maximum number (or

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under the plans or

October 1 to October 31, 2021

November 1 to November 30, 2021

December 1 to December 31, 2021

January 1 to January 31, 2022

February 1 to February 28, 2022

March 1 to March 31, 2022

(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 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.

During the nine months ended March 31, 2022, 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, 6, 8 and 10 to the condensed consolidated financial statements for additional information regarding our contractual obligations.

Off-Balance Sheet Arrangements

As of December 31, 2021, we did not have any significant off-balance sheet arrangements, other than those previously disclosed.

As of March 31, 2022, 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