What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-04-30 compared with 2024-01-26 · 62 added, 72 removed, 162 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, 2023 and results of operations for the three and six months ended December 31, 2023 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, 2023 filed with the SEC.

This management’s discussion and analysis of financial condition as of March 31, 2024 and results of operations for the three and nine months ended March 31, 2024 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, 2023 filed with the SEC.

Forward-Looking Statements

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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 broad economic disruption;

the impact of the Russia-Ukraine conflict or conflicts in the Middle East, including the potential for broad economic disruption;

global economic uncertainty;

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

(b) Healthcare, providing patient monitoring, cardiology and remote monitoring, 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.

(b) 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;

and (c) Healthcare, providing patient monitoring, cardiology and remote monitoring, and connected care systems and associated accessories.

Security Division .

Through our Security division, we provide security screening products and services globally, as well as turnkey security screening solutions.

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 55% and 64% of our total consolidated revenues for the six months ended December 31, 2022 and 2023, respectively.

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 57% and 66% of our total consolidated revenues for the nine months ended March 31, 2023 and 2024, respectively.

Optoelectronics and Manufacturing Division .

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We also 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 29% and 24% of our total consolidated revenues for the six months ended December 31, 2022 and 2023, respectively.

Revenues from external customers in our Optoelectronics and Manufacturing division accounted for 28% and 22% of our total consolidated revenues for the nine months ended March 31, 2023 and 2024, 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 16% and 12% of our total consolidated revenues for the six months ended December 31, 2022 and 2023, respectively.

Revenues from our Healthcare division accounted for 15% and 12% of our total consolidated revenues for the nine months ended March 31, 2023 and 2024, respectively.

Trends and Uncertainties

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and globally characterized by the supply chain environment, inflationary pressure, rising interest rates, and labor shortages.

Increasing diplomatic and trade friction between the U.S.

and China has also created significant uncertainty in the global economy.

These global macroeconomic factors, coupled with the volatile U.S.

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

In October 2023, the war between Israel and Hamas in Gaza has created political and potential economic uncertainty in the Middle East.

Conflicts in Gaza and nearby regions have created political and economic uncertainty in the Middle East.

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

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or foreign government legislative, regulatory or enforcement policies.

Budget Environment.

government spending levels and timely funding thereof can affect our financial performance.

The House and Senate continue the legislative process on the FY 2024 budget.

The President signed a continuing resolution to fund the U.S government at FY 2023 levels through the earlier of March 8, 2024 or until FY 2024 appropriations bills are enacted.

During periods covered by continuing resolutions, we may experience delays in new awards of our products and services, and those delays may adversely affect our results of operations.

If Congress fails to enact FY 2024 appropriations bills or extend the continuing resolution on

a timely basis, the U.S.

government will undergo a complete or partial shutdown.

The impact of any government shutdown is uncertain.

If a government shutdown were to occur and were to continue for an extended period, we could be at risk of program cancellations, schedule delays, and other disruptions and nonpayment regarding products and services, which could adversely affect our results of operations.

Changes in Costs and Supply Chain Disruptions.

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Currency Exchange Rates.

On a year-over-year basis, currency exchange rates positively impacted reported sales by approximately 2.6% for the six months ended December 31, 2023 compared to the six months ended December 31, 2022, primarily due to the weakening of the U.S.

On a year-over-year basis, currency exchange rates positively impacted reported sales by approximately 2.2% for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023, primarily due to the weakening of the U.S.

dollar against other foreign currencies in 2024.

Any strengthening of the U.S.

dollar against foreign currencies would adversely impact our sales for the remainder of the year, and any further weakening of the U.S.

dollar against foreign currencies would positively impact our sales for the remainder of the year.

dollar against foreign currencies would adversely impact our sales for the remainder of the fiscal year, and any further weakening of the U.S.

dollar against foreign currencies would positively impact our sales for the remainder of the fiscal year.

Coronavirus Pandemic.

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Significant International Security Contracts.

During fiscal year 2023, our Security division was awarded two significant international contracts valued in aggregate greater than $700 million with expected revenues to be recognized over multiple years.

Results of Operations for the Three Months Ended December 31, 2022 (Q2 Fiscal 2023) Compared to the Three Months Ended December 31, 2023 (Q2 Fiscal 2024) (amounts in millions)

During fiscal years 2023 and 2024, our Security division was awarded three significant international contracts valued in aggregate greater than $800 million with expected revenues to be recognized over multiple years.

Results of Operations for the Three Months Ended March 31, 2023 (Q3 Fiscal 2023) Compared to the Three Months Ended March 31, 2024 (Q3 Fiscal 2024) (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 Q2 fiscal 2024 increased year-over-year due to increases in product and service revenues of approximately $79.8 million and $2.7 million, respectively.

The increase in product revenue was primarily driven by growth in cargo and vehicle inspection systems sales.

The increase in service revenue was due primarily to the increase in the installed base of products.

Revenues for the Security division during Q3 fiscal 2024 increased year-over-year due to an increase in product revenues.

The increase in product revenue was primarily driven by growth in cargo and vehicle inspection systems sales associated with the two large international contracts received in fiscal 2023 and with growth in aviation and checkpoint system sales.

Service revenue in Q3 fiscal 2024 was comparable with the same prior year period.

Revenues for the Optoelectronics and Manufacturing division during Q3 fiscal 2024 decreased year-over year as a result of a decrease in revenue in our optoelectronics business and contract manufacturing business of approximately $2.8 million and $0.5 million, respectively.

Revenues for the Healthcare division during Q2 fiscal 2024 decreased year-over-year due primarily to a reduction in patient monitoring sales of $4.8 million, partially offset by an increase in service revenue of $1.5 million, cardiology sales of $1.1 million, and supplies and accessories revenue of $0.5 million.

Revenues for the Healthcare division during Q3 fiscal 2024 decreased year-over-year due primarily to a reduction in patient monitoring sales of $1.9 million, cardiology sales of $0.7 million, and service revenue of $1.3 million.

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 increase in net revenues described above which was driven by our Security division.

Gross profit as a percentage of net revenues during the quarter ended December 31, 2023 increased on a year-over-year basis due to an increase in the Security division gross margins due to a more favorable sales mix and economies of scale associated with the increase in net revenues, partially offset by a reduction in the sales in the Healthcare division, which carries the highest gross margin of our three divisions.

Gross profit as a percentage of net revenues (“gross margin”) during the quarter ended March 31, 2024 decreased on a year-over-year basis due to a decrease in the Optoelectronics and Manufacturing division gross margins due to a decrease in net revenues and less favorable sales mix, partially offset by an increase in gross margin in the Security division due to a more favorable sales mix and higher sales volume.

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, foreign currency translation, changes in fair value of contingent earnout liabilities and depreciation and amortization expense.

SG&A expense for Q2 fiscal 2024 increased on a year-over-year basis primarily due to increases in employee compensation, professional services and provision for losses on accounts receivable partially offset by favorable foreign currency exchange rates in Q2 fiscal 2024 compared to the same prior-year period.

SG&A expense for Q3 fiscal 2024 increased on a year-over-year basis primarily due to increases in employee compensation, professional services, unfavorable impact of recovery of losses on accounts receivable, changes in fair value of certain contingent earnout liabilities, and an unfavorable impact of foreign currency exchange rates in Q3 fiscal 2024 compared to the same prior-year period.

Research and development.

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

R&D expense during Q2 fiscal 2024 was $1.8 million higher than the same prior-year period with investments to support new product development initiatives primarily in our Security and Healthcare divisions driven primarily by compensation costs.

R&D expense during Q3 fiscal 2024 was $2.3 million higher than the same prior-year period with investments to support new product development initiatives primarily in our Security division driven primarily by compensation costs.

Restructuring and other charges.

Restructuring and other charges generally consist of charges relating to reductions in our workforce, facilities consolidation, costs related to acquisition activity, and other non-recurring charges.

During Q2 fiscal 2024, restructuring and other charges consisted of $0.2 million in acquisition related costs, $0.3 million in legal charges, $0.3 million for facility closure costs for operational efficiency activities, and $0.2 million for employee terminations.

During Q2 fiscal 2023, restructuring and other charges primarily consisted of $1.9 million for legal charges and $0.2 million in charges for employee terminations.

During Q3 fiscal 2024, restructuring and other charges primarily consisted of $0.5 million for facility closure costs for operational efficiency activities, and $0.5 million for employee terminations.

During Q3 fiscal 2023 restructuring and other charges primarily consisted of $0.5 million for employee terminations, $0.3 million in legal charges primarily related to government investigations and $0.1 million in acquisition-related costs and facility closure costs.

Interest and Other Expense, Net

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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 Q2 fiscal 2024 and 2023, we recognized a provision for income taxes of $9.2 million and $4.0 million, respectively.

For Q3 fiscal 2024 and 2023, the provision for income taxes was $9.9 million and $6.8 million, respectively.

The effective tax rates for Q3 fiscal 2024 and 2023 were 22.6% and 23.8%, respectively.

During Q2 fiscal 2024, we recognized a net discrete tax benefit of $0.2 million related to equity-based compensation under ASU 2016-09 and a benefit of $2.3 million from changes in prior year estimates.

During Q2 fiscal 2023, we recognized a net discrete tax benefit of $0.4 million related to equity-based compensation under ASU 2016-09 and a benefit of $0.4 million from changes in prior year estimates.

Results of Operations for the Six Months Ended December 31, 2022 (YTD Q2 Fiscal 2023) Compared to the Six Months Ended December 31, 2023 (YTD Q2 Fiscal 2024) (amounts in millions)

During Q3 fiscal 2024, 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 estimates.

During Q3 fiscal 2023, we recognized a net discrete tax expense of $0.2 million related to equity-based compensation under ASU 2016-09.

Results of Operations for the Nine Months Ended March 31, 2023 (YTD Q3 Fiscal 2023) Compared to the Nine Months Ended March 31, 2024 (YTD Q3 Fiscal 2024) (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 YTD Q2 fiscal 2024 increased year-over-year due to an increase in product and service revenues of approximately $92.1 million and $10.1 million, respectively.

Revenues for the Security division during the nine months ended March 31, 2024 increased year-over-year due to an increase in product and service revenues of approximately $200.6 million and $8.8 million, respectively.

The increase in product revenue was primarily driven by growth in cargo and vehicle inspection systems sales.

The increase in service revenue was due primarily to the increase in the installed base of products.

Revenues for the Optoelectronics and Manufacturing division during YTD Q2 fiscal 2024 decreased year-over year as a result of a decrease in revenue in our optoelectronics business of approximately $7.0 million, partially offset by an increase in revenue of approximately $1.1 million in our contract manufacturing business.

Revenues for the Healthcare division during YTD Q2 fiscal 2024 decreased year-over-year due to a reduction in patient monitoring sales of $11.9 million, partially offset by an increase in service revenue of $2.6 million.

cardiology sales of $1.5 million and supplies and accessories revenue of $0.3 million.

Revenues for the Optoelectronics and Manufacturing division during the nine months ended March 31, 2024 decreased year-over year as a result of a decrease in revenue in our optoelectronics business of approximately $9.8 million, partially offset by an increase in revenue of approximately $1.6 million in our contract manufacturing business.

Revenues for the Healthcare division during the nine months ended March 31, 2024 decreased year-over-year due primarily to a reduction in patient monitoring sales of $13.8 million, partially offset by increases in service revenue of $1.3 million, cardiology sales of $0.7 million and supplies and accessories revenue of $0.5 million.

Our cost of goods sold increased year-over-year primarily as a result of the increase in net revenues described above which was driven by our Security division.

Gross profit as a percentage of net revenues YTD Q2 fiscal 2024 increased on a year-over-year basis due to an increase in the Security division gross margins due to a more favorable sales mix and economies of scale associated with the increase in net revenues, partially offset by a reduction in the sales in the Healthcare division, which carries the highest gross margin of our three divisions.

Gross margin during the nine months ended March 31, 2024 increased on a year-over-year basis due to an increase in the Security division gross margins due to a more favorable sales mix and economies of scale associated with the increase in net revenues, partially offset by a reduction in the sales in the Optoelectronics and Manufacturing and Healthcare divisions.

Operating Expenses

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SG&A expense YTD fiscal 2024 was $24.0 million higher than in the same prior-year period, primarily due to increases employee compensation, professional services, provision for losses on accounts receivable, changes in fair value of certain contingent earnout liabilities, and unfavorable impact of foreign currency exchange rates in YTD fiscal 2024 compared to the same prior-year period.

SG&A expense for the first nine months of fiscal 2024 was $36.9 million higher than in the same prior-year period, primarily due to increases in employee compensation, professional services, provision for losses on accounts receivable, changes in fair value of certain contingent earnout liabilities, and an unfavorable impact of foreign currency exchange rates the first nine months of fiscal 2024 compared to the same prior-year period.

Research and development.

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

R&D expense YTD Q2 fiscal 2024 was $3.3 million higher than the same prior-year period driven primarily by compensation costs related to investments to support new product development initiatives mainly in our Security and Healthcare divisions.

R&D expense during the nine months ended March 31, 2024 was $5.5 million higher than the same prior-year period driven primarily by compensation costs related to investments to support new product development initiatives, mainly in our Security division.

Restructuring and other charges.

Restructuring and other charges generally consist of charges relating to reductions in our workforce, facilities consolidation, costs related to acquisition activity, and other non-recurring charges.

For YTD Q2 fiscal 2024, restructuring and other charges consisted of $0.4 million in acquisition related costs, $0.4 million in legal charges, $0.3 million for facility closure costs for operational efficiency activities, and $0.3 million for employee terminations.

For YTD Q2 fiscal 2023, restructuring and other charges primarily consisted of $2.9 million for legal charges and $0.5 million in charges for employee terminations.

During the nine months ended March 31, 2024, restructuring and other charges consisted of $0.4 million in acquisition related costs, $0.4 million in legal charges, $0.8 million for facility closure costs for operational efficiency activities and $0.8 million for employee terminations.

During the nine months ended March 31, 2023, restructuring and other charges primarily consisted of $3.2 million in legal charges primarily related to class action litigation and government investigations, $1.0 million for employee terminations and $0.2 million in acquisition-related costs and facility closure costs.

Interest and Other Expense, Net

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Interest and other expense, net .

For YTD Q2 fiscal 2024, interest and other expense, net was $12.3 million as compared to $8.6 million in the same prior-year period.

This increase was driven by higher average interest rates and higher average levels of borrowing under our credit facility during YTD Q2 fiscal 2024 in comparison with the same period in the prior year.

During the nine months ended March 31, 2024, interest and other expense, net was $19.7 million as compared to $14.3 million in the same prior-year period.

This increase was driven by higher average interest rates and higher average levels of borrowing under our credit facility during the nine months ended March 31, 2024 in comparison with the same period in the prior year.

The 1.25% convertible notes were retired on September 1, 2022 using borrowings from our credit facility.

Interest expense for YTD Q2 fiscal 2024 and 2023 included a benefit of $1.8 million and nil, respectively, from the interest rate swap.

Interest expense during the nine months ended March 31, 2024 and 2023 included a benefit of $2.7 million and $0.6 million, respectively, from the interest rate swap.

Income taxes.

For YTD Q2 fiscal 2024 and 2023, we recognized a provision for income taxes of $13.2 million and $7.6 million, respectively.

The effective tax rates for YTD Q2 fiscal 2024 and 2023 were 21.0% and 21.6%, respectively.

For YTD Q2 fiscal 2024, we recognized a discrete tax benefit of $0.6 million related to equity-based compensation under ASU 2016-09 and a benefit of $2.3 million from changes in prior year estimates.

For YTD Q2 fiscal 2023, we recognized a discrete tax benefit of $0.5 million related to equity-based compensation under ASU 2016-09 and a benefit of $0.4 million from changes in prior year tax estimates.

For the nine months ended March 31, 2024 and 2023, the provision for income taxes was $23.1 million and $14.4 million, respectively.

The effective tax rates for the nine months ended March 31, 2024 and 2023 were 21.7% and 22.6%, respectively.

For the nine months ended March 31, 2024, we recognized a discrete tax benefit of $0.8

million related to equity-based compensation under ASU 2016-09 and a benefit of $2.3 million from changes in prior year estimates.

For the nine months ended March 31, 2023, we recognized a discrete tax benefit of $0.6 million related to equity-based compensation under ASU 2016-09 and changes in prior year estimates.

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 $127.3 million at December 31, 2023, an increase of $50.5 million, or 65.8%, from $76.8 million at June 30, 2023.

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 thereafter for the foreseeable future.

Cash and cash equivalents totaled $101.4 million at March 31, 2024, an increase of $24.6 million, or 32%, from $76.8 million at June 30, 2023.

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 thereafter for the foreseeable future.

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

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Our senior secured credit facility comprises a term loan and a $600 million revolving credit facility which includes a $300 million sub-facility for letters of credit.

As of December 31, 2023, there was $316.0 million outstanding under our revolving credit facility, $54.0 million of outstanding letters of credit and $139.4 million outstanding under the term loan.

As of March 31, 2024, there was $349.0 million outstanding under our revolving credit facility, $74.7 million of outstanding letters of credit and $137.5 million outstanding under the term loan.

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.

For YTD Q2 fiscal 2024, cash used in operations was $6.4 million compared to cash provided by operations of $8.2 million in the prior period.

The net change in cash flows from operating activities was due primarily to a net increase in inventories associated with our recent international contracts in the Security division, partially offset by other changes in net working capital and the increase in net income in YTD Q2 fiscal 2024 compared with the same period last year.

For the nine months ended March 31, 2024, cash used in operations was $58.5 million compared to cash provided by operations of $72.7 million in the prior period.

The net change in cash flows from operating activities was due primarily to a net increase in accounts receivable and inventories associated with certain international contracts in the Security division, partially offset by other changes in net working capital and the increase in net income for the nine months ended March 31, 2024 compared with the same period last year.

Cash Used in Investing Activities .

Net cash used in investing activities was $21.8 million for YTD Q2 fiscal 2024 as compared to $18.9 million in the same prior-year period.

Cash used to acquire businesses was $9.0 million for YTD Q2 fiscal 2024 compared to $3.5 million in the prior year.

Capital expenditures for YTD Q2 fiscal 2024 were $8.7 million compared to $7.0 million in the same prior-year period.

Expenditures for intangible and other assets for YTD Q2 fiscal 2024 were $8.4 million compared to $8.0 million in the same prior-year period.

Net cash used in investing activities was $24.9 million for the nine months ended March 31, 2024 as compared to $30.4 million in the same prior-year period.

Cash used to acquire businesses was $9.0 million for the nine months ended March 31, 2024 compared to $4.6 million in the prior year.

Capital expenditures for the nine months ended March 31, 2024 were $13.6 million compared to $12.7 million in the same prior-year period.

Expenditures for intangible and other assets for the nine months ended March 31, 2024 were $12.9 million compared to $12.3 million in the same prior-year period.

Cash Provided by (Used in) Financing Activities .

Net cash provided by financing activities was $77.1 million for YTD Q2 fiscal 2024, compared to net cash used in financing activities of $3.7 million during the same prior-year period.

The net change from the prior-year period was primarily due to (1) higher net borrowings for YTD Q2 fiscal 2024 to fund purchases of inventory as discussed above and (2) no repurchases of common stock during YTD Q2 fiscal 2024 compared to $21.8 million in the same prior-year period, which were partially offset by higher taxes paid related to settlement of equity awards of $23.0 million during YTD Q2 fiscal 2024 compared to $11.6 million in the same prior-year period.

Net cash provided by financing activities was $110.7 million for the nine months ended March 31, 2024, compared to net cash used in financing activities of $37.1 million during the same prior-year period.

The net change from the prior-year period was primarily due to (1) higher net borrowings for the nine months ended March 31, 2024 to fund working capital associated with international contracts in the Security division as discussed above and (2) no repurchases of common stock during the nine months ended March 31, 2024 compared to repurchases of common stock of $34.7 million in the same prior-year period, which were partially offset by higher taxes paid related to settlement of equity awards of $23.2 million during the nine months ended March 31, 2024 compared to $11.8 million in the same prior-year period.

See Note 8 to the condensed consolidated financial statements for a detailed discussion regarding our revolving credit facility and other borrowings.

Cash Held by Foreign Subsidiaries

Our cash and cash equivalents totaled $127.3 million at December 31, 2023.

Our cash and cash equivalents totaled $101.4 million at March 31, 2024.

Of this amount, approximately 78% was held by our foreign subsidiaries and subject to repatriation tax considerations.

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

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

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

We did not repurchase any shares of Common Stock during the first and second quarters of fiscal year 2024.

We did not repurchase any shares of common stock during the third quarter of fiscal year 2024.

Contractual Obligations

During the six months ended December 31, 2023, 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, 2023.

During the nine months ended March 31, 2024, 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, 2023.

See Notes 1, 6, 8 and 10 to the condensed consolidated financial statements for additional information regarding our contractual obligations.

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From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted as of the specified effective dates.

Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on our Consolidated Financial Statements upon adoption.

There were no new pronouncements adopted during the second quarter of fiscal year 2024.

Unless otherwise discussed in the notes to condensed consolidated financial statements, management believes that the impact of recently issued standards, which are not yet effective for the Company, will not have a material impact on our Consolidated Financial Statements upon adoption.

There were no new pronouncements adopted during the third quarter of fiscal year 2024.

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