What changed in this filing

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Item 1. Financial Statements

2022-05-06 compared with 2022-02-04 · 151 added, 104 removed, 521 unchanged (33% of the section changed)

3 unchanged sentences

(In thousands, except share data)

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Current assets:

1 unchanged sentence

Investments — short-term 2,251 1,320

Accounts receivable, net of allowance for doubtful accounts of $ 55 and $ 47 at December 31, 2021 and June 30, 2021, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 47 and $ 47 at March 31, 2022, and June 30, 2021, respectively

87,481 172,289

28 unchanged sentences

500,000,000 shares authorized:

62,037,616 and 62,582,858 outstanding as of December 31, 2021 and June 30, 2021, respectively

60,781,979 and 62,582,858 outstanding as of March 31, 2022 and June 30, 2021, respectively

Additional paid–in capital — —

Accumulated other comprehensive income 7 1

Accumulated other comprehensive (loss) income ( 432 ) 1

Retained earnings equity (deficit) ( 334,626 ) 2,635

5 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

25 unchanged sentences

(In thousands, except per share amounts)

Three and Six Months Ended December 31, 2021

Three and Nine Months Ended March 31, 2022

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (Deficit)

19 unchanged sentences

Balances at December 31, 2021 62,037,616 $ 62 $ 87 $ ( 4,343 ) $ 7 $ ( 4,187 )

Net Income — — — 50,354 — 50,354

Other comprehensive income (loss) — — — — ( 439 ) ( 439 )

Stock options exercised 2,112 — 23 — — 23

Restricted stock units issued, net of tax withholdings 7,225 — ( 52 ) — — ( 52 )

Repurchases of Common Stock ( 1,264,974 ) ( 1 ) ( 932 ) ( 343,777 ) — ( 344,710 )

Stock-based compensation expense — 874 — — 874

Dividends paid on Common Stock ($ 0.60 per share)

— — ( 36,860 ) — ( 36,860 )

Balances at March 31, 2022 60,781,979 $ 61 $ — $ ( 334,626 ) $ ( 432 ) $ ( 334,997 )

See notes to consolidated financial statements.

Three and Six Months Ended December 31, 2020

Three and Nine Months Ended March 31, 2021

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (Deficit)

19 unchanged sentences

Balances at December 31, 2020 62,798,242 $ 63 $ 55 $ ( 181,922 ) $ 4 $ ( 181,800 )

Net Income — — — 146,075 — 146,075

Other comprehensive income (loss) — — — — ( 1 ) ( 1 )

Stock options exercised 4,372 — 48 — — 48

Restricted stock units issued, net of tax withholdings 11,512 — ( 182 ) — — ( 182 )

Repurchases of Common Stock — — — — — —

Stock-based compensation expense — — 775 — 775

Dividends paid on Common Stock ($ 0.30 per share)

— — — ( 25,124 ) — ( 25,124 )

Balances at March 31, 2021 62,814,126 $ 63 $ 696 $ ( 60,971 ) $ 3 $ ( 60,209 )

See notes to consolidated financial statements.

2 unchanged sentences

(In thousands) (Unaudited)

Six Months Ended December 31,

Nine Months Ended March 31,

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation and amortization 10,110 8,313

Recovery of impaired investment ( 902 ) —

Amortization of debt issuance costs 990 1,462

1 unchanged sentence

Premium amortization and (discount accretion), net 35 5

Write off unamortized debt issuance costs — 267

Provision for inventory obsolescence 1,437 569

Provision for sales returns 83 —

Provision for loss on vendor deposits and purchase commitments 8,430 7,502

Stock-based compensation 2,503 2,265

Provisions for doubtful accounts 7 —

Deferred taxes 109 595

Recovery of impaired investment ( 902 ) —

Change in unrealized loss on available-for-sale securities ( 407 ) —

17 unchanged sentences

Cash Flows from Financing Activities:

Proceeds from borrowing under the credit facility - Term — 37,500

Proceeds from borrowing under the credit facility- Revolver 250,000 75,000

1 unchanged sentence

Repayment against credit facility- Term ( 18,750 ) ( 12,500 )

Debt issuance costs — ( 3,257 )

Repurchases of common stock ( 513,005 ) ( 152,646 )

2 unchanged sentences

Tax withholdings related to net share settlements of equity awards — ( 998 )

Net settlement of restricted stock units ( 1,185 ) —

Net cash (used in) financing activities $ ( 394,668 ) $ ( 312,519 )

7 unchanged sentences

Right-of-use asset recognized $ 27,524 $ 20,773

Unpaid stock repurchases $ 10,000 $ —

Unpaid property and equipment and other long-term assets $ 264 $ 49

Net unsettled investment purchases $ — $ 1,234

See notes to consolidated financial statements.

11 unchanged sentences

These consolidated financial statements reflect all adjustments, which are, in the opinion of the Company, of a normal and recurring nature and those necessary to state fairly the statements of financial position, results of operations and cash flows for the dates and periods presented.

The June 30, 2021 balance sheet was derived from the audited financial statements as of that date.

The June 30, 2021 consolidated balance sheet was derived from the audited consolidated financial statements as of that date.

All significant intercompany transactions and balances have been eliminated.

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2021, included in its Annual Report on Form 10-K, as filed with the SEC on August 27, 2021 (the “Annual Report”).

The results of operations for the three and six months ended December 31, 2021 are not necessarily indicative of the results to be expected for any future periods.

The results of operations for the three and nine months ended March 31, 2022 are not necessarily indicative of the results to be expected for any future periods.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

27 unchanged sentences

We classify customer deposits as a current liability, and deferred revenue as a current or non-current liability based on the timing of when we expect to fulfill these remaining performance obligations.

The current portion of deferred revenue is included in other current liabilities and the non-current portion is included in other long-term liabilities in our Consolidated Balance Sheets.

As of December 31, 2021 and June 30, 2021, the Company’s customer deposits were $ 1.3 million and $ 2.7 million, respectively.

As of December 31, 2021, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 21.9 million and $ 6.9 million, respectively.

The current portion of deferred revenue is included in other current liabilities and the non-current portion is

included in other long-term liabilities in our Consolidated Balance Sheets.

As of March 31, 2022 and June 30, 2021, the Company’s customer deposits were $ 1.6 million and $ 2.7 million, respectively.

As of March 31, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 21.5 million and $ 6.0 million, respectively.

As of June 30, 2021, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 21.6 million and $ 8.6 million, respectively.

12 unchanged sentences

The valuation techniques used to measure the fair value of the Company’s marketable securities incorporate bond terms and conditions, current performance data, proprietary pricing models, real time quotes from contributing dealers, trade prices and other market data.

The Company held no Level 3 financial instruments as of December 31, 2021 and June 30, 2021.

The following tables summarize the Company’s financial instruments’ cost, gross unrealized gains and losses, and fair value by significant investment category as of December 31, 2021 and June 30, 2021 (in thousands):

December 31, 2021

The Company held no Level 3 financial instruments as of March 31, 2022 and June 30, 2021.

The following tables summarize the Company’s financial instruments’ cost, gross unrealized gains and losses, and fair value by significant investment category as of March 31, 2022 and June 30, 2021 (in thousands):

March 31, 2022

Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents (1) Short-Term Investments Long-Term Investments

4 unchanged sentences

U.S agency securities 20 — — 20 — — 20

US Government Bonds 30 — 30 — — 30

Subtotal $ 2,382 $ — $ ( 25 ) $ 2,357 $ — $ 1,757 $ 600

11 unchanged sentences

The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

During the three and six months ended December 31, 2021 and December 31, 2020, interest income on the Company's investment securities was immaterial.

The following table represents the Company's marketable securities that had been in continuous unrealized loss position for less than 12 months and for 12 months or greater as of December 31, 2021 (in thousands):

During the three and nine months ended March 31, 2022 and March 31, 2021, interest income on the Company's investment securities was immaterial.

Continuous Unrealized Loss

3 unchanged sentences

The Company had no continuous unrealized loss position from marketable securities as of June 30, 2021.

The following table represents the costs and fair value of cash equivalents and investments by contractual maturity as of December 31, 2021 (in thousands):

The following table represents the costs and fair value of cash equivalents and investments by contractual maturity as of March 31, 2022 (in thousands):

Available-For-Sale

5 unchanged sentences

For certain of the Company’s financial instruments, other than those presented in the disclosures above, including cash, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate fair value due to their short maturities.

As of December 31, 2021 and June 30, 2021, the Company had outstanding loans associated with its credit facilities, which are carried at historical cost.

As of March 31, 2022 and June 30, 2021, the Company had outstanding loans associated with its credit facilities, which are carried at historical cost.

The fair value of the Company’s debt disclosed below was estimated based on the current rates offered to the Company for debt with similar terms and remaining maturities and was a Level 2 measurement.

As of December 31, 2021 and June 30, 2021, the fair value of the Company’s debt, which is carried at historical cost was $ 511.3 million and $ 493.8 million, respectively.

As of March 31, 2022 and June 30, 2021, the fair value of the Company’s debt, which is carried at historical cost was $ 725.0 million and $ 493.8 million, respectively.

NOTE 5— EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

11 unchanged sentences

Inventories consisted of the following (in thousands):

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Finished goods $ 234,242 $ 228,514

3 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Testing equipment $ 16,499 $ 15,279

10 unchanged sentences

Other long-term assets consisted of the following (in thousands):

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Hong Kong Tax deposit (1)

4 unchanged sentences

The Company expects the $ 57.1 million of deposits made with the IRD to be refunded upon completion of the audit.

The deposit is a Hong Kong dollar denominated deposit.

See Note 14 to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $ 3.5 million and 2.8 million as of December 31, 2021 and June 30, 2021, respectively.

(2) Accumulated amortization was $ 3.9 million and 2.8 million as of March 31, 2022 and June 30, 2021, respectively.

Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Deferred revenue — short-term $ 21,472 21,617

5 unchanged sentences

Reserve for sales returns 2,317 2,242

Unpaid Stock Repurchases 10,000 —

Inventory received not billed 9,286 55,548

3 unchanged sentences

Other long-term liabilities consisted of the following (in thousands):

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Deferred Revenue — long-term $ 5,988 $ 8,564

8 unchanged sentences

Warranty obligations, included in other current liabilities, were as follows (in thousands):

Six Months Ended December 31,

Nine Months Ended March 31,

Beginning balance $ 4,812 $ 4,538

7 unchanged sentences

The Facilities replace the Company's Prior Facilities under the Prior Credit Agreement, which has been terminated in connection with the Third Amended and Restated Credit Agreement.

At the closing of the Third Amended and Restated Credit Agreement, the Term facility was fully drawn, of which $ 456.3 million and $ 0.7 million was used to repay the Prior Term Facility under the Prior Credit Agreement for principal and interest, respectively.

At the closing of the Third Amended and Restated Credit Agreement, the Term facility was fully drawn, of which $ 456.3 million and

$ 0.7 million was used to repay the Prior Term Facility under the Prior Credit Agreement for principal and interest, respectively.

Additionally, at closing of the Third Amended and Restated Credit Agreement, $ 75.0 million and $ 0.4 million of the Prior Revolving Facility under the Prior Credit Agreement was repaid for principal and interest, respectively.

2 unchanged sentences

The Company’s debt consisted of the following (in thousands):

December 31, 2021 June 30, 2021

March 31, 2022 June 30, 2021

Term Facility - short term $ 25,000 $ 25,000

22 unchanged sentences

The Facilities

As of December 31, 2021, $ 481.3 million was outstanding on the Term Facility and the Company borrowed $ 30.0 million balance on the Revolving Facility, leaving $ 670.0 million available on the Revolving Facility.

As of March 31, 2022, $ 475.0 million was outstanding on the Term Facility and the Company borrowed $ 250.0 million balance on the Revolving Facility, leaving $ 450.0 million available on the Revolving Facility.

Term Facility:

During the six months ended December 31, 2021, the Company made aggregate payments of $ 16.5 million under the Term Facility, of which $ 12.5 million was repayment of principal and $ 4.0 million was payment of interest.

As of December 31, 2021, the interest rate on the term loan was 1.59 %.

As of January 31, 2022, the most currently available reset date, the Term Facility has an interest rate of 1.61 %.

During the nine months ended March 31, 2022, the Company made aggregate payments of $ 24.7 million under the Term Facility, of which $ 18.8 million was repayment of principal and $ 5.9 million was payment of interest.

As of March 31, 2022, the interest rate on the term loan was 1.96 %.

As of April 29, 2022, the most currently available reset date, the Term Facility has an interest rate of 2.26 %.

Revolving Facility:

Under the Third Amended and Restated Credit Agreement, during the three months ended December 31, 2021, the Company did not make any aggregate payments under the Revolving Facility.

Debt Payment Obligations Interest Rate as of December 31, 2021 Rate Reset Date Reset Rate

$30 Million Revolver 1.61 % January 14, 2022 1.61 %

The following table summarizes the Company’s estimated debt and interest payment obligations as of December 31, 2021, for the remainder of fiscal 2022 and future fiscal years (in thousands):

Under the Third Amended and Restated Credit Agreement, during the three months ended March 31, 2022, the Company did not make any aggregate payments under the Revolving Facility.

Debt Payment Obligations Interest Rate as of March 31, 2022 Rate Reset Date Reset Rate

$ 25 Million Revolver

1.81 % April 8, 2022 1.95 %

$ 75 Million Revolver

1.82 % April 11, 2022 1.99 %

$ 50 Million Revolver

1.82 % April 11, 2022 1.99 %

$ 60 Million Revolver

1.89 % April 14, 2022 2.05 %

$ 40 Million Revolver

1.95 % April 25, 2022 2.17 %

The following table summarizes the Company’s estimated debt and interest payment obligations as of March 31, 2022, for the remainder of fiscal 2022 and future fiscal years (in thousands):

2022 (remainder) 2023 2024 2025 2026 Thereafter Total

3 unchanged sentences

Total $ 10,065 $ 39,992 $ 39,535 $ 38,999 $ 653,896 $ — $ 782,487

(1) - Interest payments are calculated based on the applicable rates and payment dates as of December 31, 2021.

(1) - Interest payments are calculated based on the applicable rates and payment dates as of March 31, 2022.

Although the Company’s interest rates on our debt obligations may vary, the Company has assumed the most recent available interest rates for all periods presented.

2 unchanged sentences

Some of the Company’s leases include options to extend the term of such leases for a period from 12 months to 60 months, and/or have options to early terminate the lease.

As of December 31, 2021, the Company included such options in determining the lease terms for certain of the Company’s leases because the Company was reasonably certain that it would exercise the extension options.

As of March 31, 2022, the Company included such options in determining the lease terms for certain of the Company’s leases because the Company was reasonably certain that it would exercise the extension options.

Most of the Company’s leases require it to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

The following table summarizes the Company’s lease costs for the three and six months ended December 31, 2021 and 2020 (in thousands):

Financial Statement Classification Three Months Ended December 31, Six Months Ended December 31,

The following table summarizes the Company’s lease costs for the three and nine months ended March 31, 2022 and 2021 (in thousands):

Financial Statement Classification Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

6 unchanged sentences

The operating lease costs in the table above include costs for long-term and short-term leases.

Total short-term costs for six months ended December 31, 2021 and 2020 were immaterial.

Total short-term costs for nine months ended March 31, 2022 and 2021 were $ 0.4 million and immaterial, respectively.

Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments and are excluded from the calculation of operating lease liabilities and ROU assets.

For the three and six months ended December 31, 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 3.5 million and $ 6.5 million, respectively.

For the three and nine months ended March 31, 2022, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 3.8 million and $ 10.2 million, respectively.

For the three and nine months ended March 31, 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 2.8 million and $ 8.2 million, respectively.

Cash paid for amounts associated with the Company’s operating lease liabilities were classified as operating activities in the consolidated statement of cash flows.

The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of December 31, 2021:

The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating

leases and a reconciliation to the operating lease liabilities as of March 31, 2022:

Remainder of Fiscal 2022 $ 3,397

11 unchanged sentences

Operating Leases

See Note 9- Leases for future minimum lease payments under non-cancelable operating leases as of December 31, 2021.

See Note 9- Leases for future minimum lease payments under non-cancelable operating leases as of March 31, 2022.

Purchase Obligations

2 unchanged sentences

If the Company cancels all or part of the orders, the Company may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture the Company's products.

The Company periodically reviews the potential liability, and as of December 31, 2021, the Company recorded a purchase obligation liability of $ 7.8 million related to component purchase commitments.

There have been no other significant liabilities for cancellations recorded as of December 31, 2021.

The Company periodically reviews the potential liability, and as of March 31, 2022, the Company recorded a purchase obligation liability of $ 7.8 million related to component purchase commitments.

There have been no other significant liabilities for cancellations recorded as of March 31, 2022.

The Company’s consolidated financial position and results of operations could be negatively impacted if it were required to compensate the contract manufacturers for any unrecorded liabilities incurred.

The Company may be subject to additional purchase obligations for supply agreements and components ordered by its contract manufacturers based on manufacturing forecasts it provides them each month.

The Company estimates the amount of these additional purchase obligations to range from $ 183.7 million to $ 854.6 million as of December 31, 2021, depending upon the timing of orders placed for these components by its contract manufacturers.

The Company estimates the amount of these additional purchase obligations to range from $ 185.6 million to $ 1,294.2 million as of March 31, 2022, depending upon the timing of orders placed for these components by its contract manufacturers.

Other Obligations

As of December 31, 2021, the Company has other obligations of $ 2.5 million which consisted primarily of commitments related to raw materials and research and development projects.

As of March 31, 2022, the Company has other obligations of $ 3.1 million which consisted primarily of commitments related to raw materials and research and development projects.

Indemnification Obligations

8 unchanged sentences

Taking all of the above factors into account, the Company records an amount where it is probable that the Company will incur a loss and where that loss can be reasonably estimated.

However, the Company’s estimates may be incorrect and the Company could ultimately incur more

or less than the amounts initially recorded.

The Company may also incur significant legal fees, which are expensed as incurred, in defending against these claims.

However, the Company’s estimates may be incorrect and the Company could ultimately incur more or less than the amounts initially recorded.

The Company may also incur significant legal fees, which are expensed as incurred, in

defending against these claims.

The Company is not currently aware of any pending or threatened litigation that would have a material adverse effect on the Company’s financial statements.

16 unchanged sentences

All claims asserted against the Company in the Original Action have now been dismissed.

A claim construction hearing took place on January 18, 2022 before a court-appointed Special Master and, on January 27, 2022, the Special Master issued his Report and Recommendation.

On February 17, 2022, the Company and the remaining defendants filed Objections to the Special Master’s Report and Recommendation and a motion for judgement on the pleadings regarding the ‘728 patent.

Defendants’ Objection to the Special Master’s Report and Recommendation and the Motion for Judgement on the Pleadings are both pending before the Court

Trial in the New Action is currently scheduled for October 11, 2022.

14 unchanged sentences

On January 5, 2022, lead plaintiff voluntarily dismissed the Securities Action.

Ubiquiti Inc.

On October 21, 2021, a purported stockholder of the Company filed an action captioned Flannery v.

Ubiquiti Inc.

2021-0913-PAF (the “Books and Records Action”) in the Court of Chancery of the State of Delaware seeking to inspect certain books

and records of the Company pursuant to 8 Delaware Code Section 220.

The Books and Records Action complaint sought to inspect, without limitation, books and records concerning the data breach experienced by the Company in January 2021, as well as related statements, disclosures, policies, procedures, and practices.

On December 20, 2021, Flannery voluntarily dismissed the Books and Records Action.

NOTE 11— COMMON STOCK AND TREASURY STOCK

3 unchanged sentences

The 2020 May Program expires on March 31, 2022.

During the three months ended December 31, 2021, under the 2020 May Program, the Company repurchased and retired 434,271 shares of common stock at an average price per share of $ 297.15 for an aggregate amount of $ 129.0 million.

As of December 31, 2021, the Company had $ 149.8 million available for share repurchases under the 2020 May Program.

The following table provides information with respect to the Company’s 2020 May Program and the activity under the available share repurchase program during the six months ended December 31, 2021 (in millions, except share and per share amounts):

During the three months ended March 31, 2022, under the 2020 May Program, the Company repurchased and retired 509,555 shares of common stock at an average price per share of $ 294.05 for an aggregate amount of $ 149.8 million.

As of March 31, 2022, the Company had $ 0.0 million available for share repurchases under the 2020 May Program.

On February 1, 2022, the Company's Board of Directors approved a $ 300 million stock repurchase program (the “2022 February Program”).

Under the 2022 February Program, the Company may repurchase up to $ 300 million of its common stock.

The 2022 February Program expires on June 30, 2023.

During the three months ended March 31, 2022, under the 2022 February Program, the Company repurchased and retired 755,419 shares of common stock at an average price per share of $ 257.97 for an aggregate amount of $ 194.9 million.

As of March 31, 2022, the Company had $ 105.1 million available for share repurchases under the 2022 February Program.

The following table provides information with respect to the Company’s 2020 May Program and 2022 February Program and the activity under the available share repurchase programs during the nine months ended March 31, 2022 (in millions, except share and per share amounts):

Date of Publicly Announced Program Amount of Publicly Announced Program Total Number of Shares Purchased Average Price Paid per Share Total Aggregate Amount Paid Period of Purchases Estimated Remaining Balance Available for Share Repurchases under the Program Expiration date of Program

May 8, 2020 $ 500 million 565,265 $ 297.73 $ 168.3 July 7, 2021 - December 21, 2021 $ 149.8 3/31/2022

May 8, 2020 $ 500 million 1,074,820 $ 295.98 $ 318.1 July 7, 2021 - February 3, 2022 $ — 03/31/2022

February 1, 2022 $ 300 million 755,419 $ 257.97 $ 194.9 February 4, 2022 - March 31, 2022 $ 105.1 6/30/2023

NOTE 12— ACCUMULATED OTHER COMPREHENSIVE INCOME

1 unchanged sentence

Other comprehensive income refers to unrealized gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income pursuant to GAAP.

For the three and six months ended December 31, 2021 and 2020, the Company’s accumulated other comprehensive income includes net unrealized gains and losses from the Company’s available-for-sale securities, respectively.

For the three and nine months ended March 31, 2022 and 2021, the Company’s accumulated other comprehensive income includes net unrealized gains and losses from the Company’s available-for-sale securities, respectively.

NOTE 13— STOCK BASED COMPENSATION

1 unchanged sentence

The Company’s 2020, 2010 and 2005 Equity Incentive Plan are described in the Company’s Annual Report.

As of December 31, 2021, the Company had 4,986,146 authorized shares available for future issuance under all of its stock incentive plans.

As of March 31, 2022, the Company had 4,986,708 authorized shares available for future issuance under all of its stock incentive plans.

Stock-Based Compensation

The following table shows total stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income for the three and six months ended December 31, 2021 and 2020 (in thousands):

Three Months Ended December 31, Six Months Ended December 31,

The following table shows total stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

4 unchanged sentences

Stock Options

The following is a summary of option activity for the Company’s stock incentive plans for the six months ended December 31, 2021:

The following is a summary of option activity for the Company’s stock incentive plans for the nine months ended March 31, 2022:

Common Stock Options Outstanding

6 unchanged sentences

Forfeitures and cancellations — $ —

Balance, December 31, 2021 6,336 $ 10.77 0.87 $ 1,875

Vested as of December 31, 2021 6,336 $ 10.77 0.87 $ 1,875

Vested and exercisable as of December 31, 2021 6,336 $ 10.77 0.87 $ 1,875

During the three months ended December 31, 2021 and 2020, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.7 million and $ 0.6 million, respectively, as determined as of the date of option exercise.

During the six months ended December 31, 2021 and 2020, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 1.3 million and $ 0.9 million, respectively, as determined as of the date of option exercise.

As of December 31, 2021, the Company had no unrecognized compensation costs related to stock options.

The Company did no t grant any employee stock options during the three and six months ended December 31, 2021 and 2020.

Balance, March 31, 2022 4,224 $ 10.77 0.62 $ 1,200

Vested as of March 31, 2022 4,224 $ 10.77 0.62 $ 1,200

Vested and exercisable as of March 31, 2022 4,224 $ 10.77 0.62 $ 1,200

During the three months ended March 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.5 million and $ 1.4 million, respectively, as determined as of the date of option exercise.

During the nine months ended March 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 1.8 million and $ 2.4 million, respectively, as determined as of the date of option exercise.

As of March 31, 2022, the Company had no unrecognized compensation costs related to stock options.

The Company did no t grant any employee stock options during the three and nine months ended March 31, 2022 and 2021.

Restricted Stock Units (“RSUs”)

5 unchanged sentences

RSUs canceled ( 2,825 ) $ 154.69

Non-vested RSUs, December 31, 2021 44,619 $ 179.71

The intrinsic value of RSUs vested in the three months ended December 31, 2021 and 2020 was $ 3.0 million and $ 2.4 million, respectively.

The intrinsic value of RSUs vested in the six months ended December 31, 2021 and 2020 was $ 6.0 million and $ 4.5 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 13.7 million as of December 31, 2021.

As of December 31, 2021, there were unrecognized compensation costs related to RSUs of $ 5.3 million which the Company expects to recognize over a weighted average period of 3.1 years.

Non-vested RSUs, March 31, 2022 53,422 $ 222.29

The intrinsic value of RSUs vested in the three months ended March 31, 2022 and 2021 was $ 2.2 million and $ 3.2 million, respectively.

The intrinsic value of RSUs vested in the nine months ended March 31, 2022 and 2021 was $ 8.2 million and $ 7.7 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 15.8 million as of March 31, 2022.

As of March 31, 2022, there were unrecognized compensation costs related to RSUs of $ 9.1 million which the Company expects to recognize over a weighted average period of 3.5 years.

NOTE 14— INCOME TAXES

The Company recorded tax provisions of $ 19.0 million and $ 44.8 million for the three and six months ended December 31, 2021 as compared to $ 27.5 million and $ 57.1 million for the three and six months ended December 31, 2020.

The decrease is primarily related to decrease in profit before tax for the six months ended December 31, 2021 as compared to the six months ended December 31, 2020.

The Company recorded tax provisions of $ 9.0 million and $ 53.8 million for the three and nine months ended March 31, 2022 as compared to $ 28.0 million and $ 85.1 million for the three and nine months ended March 31, 2021.

The decrease is primarily related to the reduction in profit before tax and changes in the mix of profit before tax for the nine months ended March 31, 2022 as compared to the nine months ended March 31, 2021.

The Company’s estimated fiscal year 2022 effective tax rate, before discrete items, differs from the U.S.

statutory rate primarily due to profits earned in jurisdictions where the tax rate is lower than the U.S.

tax rate, partially offset by additional US tax related to our non-US operations under Global Intangible Low-Taxes Income (GILTI) provision.

As of December 31, 2021, the Company had approximately $ 34.6 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended December 31, 2021, the Company recorded an increase of its unrecognized tax benefits of $ 1.2 million.

tax rate, partially offset by additional U.S.

tax related to our non-U.S.

operations under the Global Intangible Low-Taxes Income (GILTI) rules.

As of March 31, 2022, the Company had approximately $ 35.4 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended March 31, 2022, the Company recorded an increase of its unrecognized tax benefits of $ 0.9 million.

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Income.

Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheet.

As of December 31, 2021, the Company had $ 4.0 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S.

As of March 31, 2022, the Company had $ 4.2 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state,

local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S.

Internal Revenue Service and the Hong Kong IRD.

7 unchanged sentences

The Company is fully cooperating with the examination including submitting documentation in support of its position.

The Company continues to believe that its tax positions filed with IRD are more likely than not to be sustained based on their technical merits and therefore no reserve has been provided for this tax uncertainty and we expect the $ 57.5 million of deposits made with IRD to be refunded upon completion of the audit.

However, there can be no assurance that this matter will be resolved in the Company’s favor and therefore it's possible that an adverse outcome of the matter could have a material effect on the Company’s results of operations and financial condition.

In July 2018, the Company received a draft Notice of Proposed Adjustment (“Draft NOPA”) from the Internal Revenue Service (“IRS”) proposing an adjustment to income for the fiscal 2015 and fiscal 2016 tax years based on its interpretation of certain obligations of the non-US entities under the credit facility.

The Company continues to believe that its tax positions filed with IRD are more likely than not to be sustained based on their technical merits and therefore no reserve has been provided for this tax uncertainty and we expect the $ 57.1 million (net of foreign currency impact) of deposits made with IRD to be refunded upon completion of the audit.

However, there can be no assurance that this matter will be resolved in the Company’s favor and therefore it is possible that an adverse outcome of the matter could have a material effect on the Company’s results of operations and financial condition.

entities under the credit facility.

This Draft NOPA was superseded by an Acknowledgement of Facts (“AOF”) issued to the Company by the IRS on January 17, 2020.

2 unchanged sentences

The Company has formally protested the adjustment and the case has been moved from the Examination Division to the IRS Appeals Division where a formal review of the facts and the applicable law will take place.

There is a scheduled IRS Appeal conference for February 10, 2022.

There is a scheduled IRS Appeal conference for May 10, 2022.

The Company strongly believes the position of the IRS with regard to this matter is without merit.

10 unchanged sentences

Revenues by product type are as follows (in thousands, except percentages):

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

3 unchanged sentences

Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages):

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

5 unchanged sentences

Total revenues $ 358,068 100 % $ 467,237 100 % $ 1,248,547 100 % $ 1,420,206 100 %

(1) Revenue for the United States was $ 172.3 million and $ 179.1 million for the three months ended December 31, 2021 and 2020, respectively.

For the periods presented, there were no c ustomers with an accounts receivable balance of 10% or greater of total accounts receivable or customers with net revenues of 10% or greater of total revenues .

(1) Revenue for the United States was $ 173.9 million and $ 193.2 million for the three months ended March 31, 2022 and 2021, respectively.

Revenue for the United States was $ 536.8 million and $ 582.1 million for the nine months ended March 31, 2022 and 2021, respectively,

For the periods presented, there were no customers with an accounts receivable balance of 10% or greater of total accounts receivable or customers with net revenues of 10% or greater of total revenues .

NOTE 16— SUBSEQUENT EVENTS

Stock Repurchases

Between January 1, 2022 and February 3, 2022, the Company repurchased 509,555 shares of common stock at an average price of $ 294.05 for an aggregate amount of $149.8 million.

On February 1, 2022, the Company’s Board of Directors approved a new $ 300 million stock repurchase program (the “2022 February Program”).

Under the 2022 February Program, the Company is authorized to repurchase up to $ 300 million of common stock.

The 2022 February Program expires on June 30, 2023.

On February 3, 2022, the Company's Board of Directors approved a quarterly cash dividend of $ 0.60 per share payable on February 22, 2022 to shareholders of record at the close of business on February 14, 2022.

Between April 1, 2022 and May 5, 2022, the Company repurchased 363,614 shares of common stock at an average price of $ 289.11 for an aggregate amount of $ 105.1 million.

On May 3, 2022, the Company’s Board of Directors approved a new $ 200 million stock repurchase program (the “2022 May Program”).

Under the 2022 May Program, the Company is authorized to repurchase up to $ 200 million of common stock.

The 2022 May Program expires on September 30, 2023.

On May 3, 2022, the Company's Board of Directors approved a quarterly cash dividend of $ 0.60 per share payable on May 23, 2022 to shareholders of record at the close of business on May 16, 2022.

Any future dividends will be subject to the approval of the Company’s Board of Directors.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements