What changed in this filing

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Item 1. Financial Statements

2023-05-05 compared with 2023-02-03 · 124 added, 87 removed, 450 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands, except share data)

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Current assets:

1 unchanged sentence

Investments — short-term 121 427

Accounts receivable, net of allowance for doubtful accounts of $ 55 and $ 52 at December 31, 2022 and June 30, 2022, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 66 and $ 52 at March 31, 2023 and June 30, 2022, respectively

146,359 119,627

26 unchanged sentences

500,000,000 shares authorized:

60,430,958 and 60,420,525 outstanding as of December 31, 2022 and June 30, 2022, respectively

60,441,733 and 60,420,525 issued and outstanding as of March 31, 2023 and June 30, 2022, respectively

Additional paid–in capital 3,391 650

3 unchanged sentences

Total liabilities and stockholders’ deficit $ 1,375,197 $ 844,712

See notes to consolidated financial statements.

See notes to consolidated financial statements (unaudited).

UBIQUITI INC.

1 unchanged sentence

(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,

2023 2022 2023 2022

21 unchanged sentences

Comprehensive income $ 98,577 $ 49,915 $ 303,964 $ 285,720

See notes to consolidated financial statements.

See notes to consolidated financial statements (unaudited).

UBIQUITI INC.

1 unchanged sentence

(In thousands, except per share amounts)

Three and Six Months Ended December 31, 2022

Three and Nine Months Ended March 31, 2023

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

19 unchanged sentences

60,430,958 $ 60 $ 2,228 $ ( 250,238 ) $ — $ ( 247,950 )

Three and Six Months Ended December 31, 2021

Net Income — — — 98,577 — 98,577

Restricted stock units issued, net of tax withholdings 10,775 — ( 83 ) — — ( 83 )

Stock-based compensation expense — — 1,246 — — 1,246

Dividends Paid on Common Stock ($ 0.60 per share)

— — — ( 36,265 ) — ( 36,265 )

Balances at March 31, 2023

60,441,733 $ 60 $ 3,391 $ ( 187,926 ) $ — $ ( 184,475 )

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)

22 unchanged sentences

62,037,616 $ 62 $ 87 $ ( 4,343 ) $ 7 $ ( 4,187 )

See notes to consolidated financial statements.

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 (unaudited).

UBIQUITI INC.

1 unchanged sentence

(In thousands) (Unaudited)

Six Months Ended December 31,

Nine Months Ended March 31,

Cash Flows from Operating Activities:

Net income $ 303,964 $ 286,153

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash (used in)/provided by operating activities:

Depreciation and amortization 12,164 10,110

9 unchanged sentences

Change in unrealized loss on available-for-sale securities 780 ( 407 )

Provision for sales returns 62 83

Other, net 325 —

8 unchanged sentences

Accrued and other liabilities ( 1,312 ) ( 19,742 )

Net cash provided by operating activities 2,333 196,125

Net cash (used in) provided by operating activities ( 159,872 ) 300,280

Cash Flows from Investing Activities:

20 unchanged sentences

Right-of-use asset recognized $ 5,814 $ 27,524

Unpaid stock repurchases $ — $ 10,000

Unpaid property and equipment and other long-term assets $ 1,097 $ 264

See notes to consolidated financial statements.

See notes to consolidated financial statements (unaudited).

UBIQUITI INC.

12 unchanged sentences

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2022, included in its Annual Report on Form 10-K, as filed with the SEC on August 26, 2022 (the “Annual Report”).

The results of operations for the three and six months ended December 31, 2022 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, 2023 are not necessarily indicative of the results to be expected for any future periods.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

27 unchanged sentences

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, 2022 and June 30, 2022, the Company’s customer deposits were $ 0.9 million and $ 1.1 million, respectively.

As of December 31, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 19.1 million and $ 6.2 million, respectively.

As of March 31, 2023 and June 30, 2022, the Company’s customer deposits were $ 0.8 million and $ 1.1 million, respectively.

As of March 31, 2023, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 17.2 million and $ 7.1 million, respectively.

As of June 30, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 20.8 million and $ 5.8 million, respectively.

1 unchanged sentence

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,

2023 2022 2023 2022

11 unchanged sentences

Inventories consisted of the following (in thousands):

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Finished goods $ 645,520 $ 253,260

3 unchanged sentences

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

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Testing equipment $ 19,800 $ 16,999

10 unchanged sentences

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

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Hong Kong Tax deposit (1)

5 unchanged sentences

See Note 12, "Income Taxes" to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $ 5.1 million and $ 4.3 million as of December 31, 2022, and June 30, 2022, respectively.

(2) Accumulated amortization was $ 5.5 million and $ 4.3 million as of March 31, 2023, and June 30, 2022, respectively.

Other Current Liabilities

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

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Deferred revenue — short-term $ 17,161 20,766

10 unchanged sentences

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

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Deferred Revenue — long-term $ 7,112 $ 5,822

7 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 $ 6,394 $ 4,812

3 unchanged sentences

Ending balance $ 7,943 $ 6,097

On March 30, 2021, the Company, as borrower and certain domestic subsidiaries entered into an amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), the other financial institutions named as lenders therein, and Wells Fargo as administrative agent and collateral agent for the lenders, that extended the $ 700 million senior secured revolving credit facility (the “Revolving Facility”) and provided a new $ 500 million senior secured term loan facility (the “Term Facility”, together with the Revolving Facility, the “Facilities”), and extended the maturity of the Facilities to March 30, 2026.

On March 30, 2021, the Company, as borrower and certain domestic subsidiaries entered into an amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), the other financial institutions named as lenders therein, and Wells Fargo as administrative agent and collateral agent for the lenders, that extended the $ 700 million senior secured revolving credit facility (the “Revolving Facility”) and provided a $ 500 million senior secured term loan facility (the “Term Facility”, together with the Revolving Facility, the “Facilities”), and extended the maturity of the Facilities to March 30, 2026.

In addition, the Facilities include an option to request increases in the amounts of such credit facilities by up to an additional $ 500 million in the aggregate.

1 unchanged sentence

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

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

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

10 unchanged sentences

The Facilities may be prepaid at any time without penalty.

Revolving and Term facilities bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.50 % and 1.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable LIBOR rate (or replacement rate) for a specified period, plus a margin of between 1.50 % and 2.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended

fiscal quarter.

The Revolving and Term Facilities bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.50 % and 1.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable LIBOR rate (or the Secured Overnight Financing Rate ("SOFR") rate for any new or existing loans that reset after April 2, 2023) for a specified period, plus a margin of between 1.50 % and

2.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter.

Swingline loans bear interest at a floating rate per annum equal to the base rate plus a margin of between 0.50 % and 1.25 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter.

Base rate is defined as the greatest of (A) Wells Fargo’s prime rate, (B) the federal funds rate plus 0.50 % or (C) the applicable LIBOR rate (or replacement rate) for a period of one month plus 1.00 %.

Base rate is defined as the greatest of (A) Wells Fargo’s prime rate, (B) the federal funds rate plus 0.50 % or (C) the applicable LIBOR rate (or SOFR rate for any new or existing loans that reset after April 2, 2023) for a period of one month plus 1.00 %.

A default interest rate shall apply on all obligations during certain events of default under the Third Amended and Restated Credit Agreement at a rate per annum equal to 2.00 % above the applicable interest rate.

7 unchanged sentences

The Facilities

As of December 31, 2022, $ 456.3 million was outstanding on the Term Facility and $ 440 million outstanding on the Revolving Facility, leaving $ 260 million available on the Revolving Facility.

As of March 31, 2023, $ 450.0 million was outstanding on the Term Facility and $ 640 million was outstanding on the Revolving Facility, leaving $ 60 million available on the Revolving Facility.

Term Facility

During the six months ended December 31, 2022, the Company made aggregate payments of $ 23.3 million under the Term Facility, of which $ 12.5 million was repayment of principal and $ 10.8 million was payment of interest.

As of December 31, 2022, the interest rate on the Term Facility was 6.13 %.

This interest rate reset on January 30, 2023.

During the nine months ended March 31, 2023, the Company made aggregate payments of $ 36.8 million under the Term Facility, of which $ 18.8 million was repayment of principal and $ 18.0 million was payment of interest.

As of March 31, 2023, the interest rate on the Term Facility was 6.59 %.

This interest rate reset on April 28, 2023.

Revolving Facility

Under the Third Amended and Restated Credit Agreement, during the six months ended December 31, 2022, the Company made aggregate payments of $ 67.7 million under the Revolving Facility, of which $ 60 million was repayment of principal and $ 7.7 million was payment of interest.

As of December 31, 2022, the interest rates on the Revolving Facility were 6.04 % - 6.10 %.

The following table summarizes the Company’s estimated debt and interest payment obligations as of December 31, 2022, for the remainder of fiscal 2023 and future fiscal years (in thousands):

Under the Third Amended and Restated Credit Agreement, during the nine months ended March 31, 2023, the Company made aggregate payments of $ 76.3 million under the Revolving Facility, of which $ 60 million was repayment of principal and $ 16.3 million was payment of interest.

As of March 31, 2023, the interest rates on the Revolving Facility were 6.46 % - 6.53 %.

The following table summarizes the Company’s estimated debt and interest payment obligations as of March 31, 2023, for the remainder of fiscal 2023 and future fiscal years (in thousands):

2023 (remainder)

4 unchanged sentences

Total $ 24,446 $ 97,139 $ 95,272 $ 1,085,218 $ — $ — $ 1,302,075

(1) Interest payments are calculated based on the applicable rates and payment dates as of December 31, 2022 and assumes the outstanding revolver balance remains at $ 440 million.

(1) Interest payments are calculated based on the applicable rates and payment dates as of March 31, 2023 and assumes the outstanding revolver balance remains at $ 640 million.

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

The Facilities were amended on April 3, 2023.

For additional information regarding the Facilities, refer to Note 14 - Subsequent Events.

NOTE 8— LEASES

1 unchanged sentence

Some of our 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, 2022, we included such options in determining the lease terms for certain of our leases because we were reasonably certain that we would

exercise the extension options.

As of March 31, 2023, we included such options in determining the lease terms for certain of our leases because we were reasonably certain that we would exercise the extension options.

Most of our leases require us to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

The following table summarizes our lease costs for the three and six months ended December 31, 2022 and 2021 (in thousands):

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

The following table summarizes our lease costs for the three and nine months ended March 31, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

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 the three and six months ended December 31, 2022 and 2021 were immaterial .

Total short-term costs for the three and nine months ended March 31, 2023, were $ 0.2 million and $ 0.4 million, respectively.

Total short-term costs for the three and nine months ended March 31, 2022, were $ 0.2 million and $ 0.4 million, 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 months ended December 31, 2022 and 2021, cash paid for amounts associated with the Company's operating lease liabilities were approximately $ 4.0 million and $ 3.5 million, respectively.

For the six months ended December 31, 2022 and 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 7.6 million and $ 6.5 million, respectively.

For the three months ended March 31, 2023 and 2022, cash paid for amounts associated with the Company's operating lease liabilities were approximately $ 3.8 million and $ 3.8 million, respectively.

For the nine months ended March 31, 2023 and 2022, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 11.4 million and $ 10.2 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, 2022:

Remainder of Fiscal 2023

7 unchanged sentences

Operating Leases

See Note 8, "Leases" for future minimum lease payments under non-cancelable operating leases as of December 31, 2022.

See Note 8, "Leases" for future minimum lease payments under non-cancelable operating leases as of March 31, 2023.

Purchase Obligations

We subcontract with third parties to manufacture our products and have purchase commitments with key component suppliers.

During the normal course of business, the Company’s contract manufacturers procure components and manufacture products based upon orders placed by us.

the normal course of business, the Company’s contract manufacturers procure components and manufacture products based upon orders placed by us.

If we cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products.

We periodically review the potential liability.

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

Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any unrecorded liabilities

There have been no significant liabilities for cancellations recorded as of March 31, 2023.

Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any unrecorded liabilities incurred.

We may be subject to additional purchase obligations for supply agreements and components ordered by our contract manufacturers based on manufacturing forecasts we provide them each month.

We estimate the amount of these additional purchase obligations to range from $ 440.6 million to $ 916.5 million as of December 31, 2022, depending upon the timing of orders placed for these components by our contract manufacturers.

We estimate the amount of these additional purchase obligations to range from $ 1,279.2 million to $ 1,390.5 million as of March 31, 2023, depending upon the timing of orders placed for these components by our contract manufacturers.

Other Obligations

As of December 31, 2022, the Company has other obligations of $ 5.4 million which consisted primarily of commitments related to research and development projects.

As of March 31, 2023, the Company has other obligations of $ 5.8 million which consisted primarily of commitments related to research and development projects.

Indemnification Obligations

34 unchanged sentences

The 2022 May Program expires on September 30, 2023.

The Company did not make any repurchases under the 2022 May Program during the three and six months ended December 31, 2022.

As of December 31, 2022, the Company had $ 200 million available for share purchase under the 2022 May Program.

The Company did not make any repurchases under the 2022 May Program during the three and nine months ended March 31, 2023.

As of March 31, 2023, the Company had $ 200 million available for share purchase under the 2022 May Program.

NOTE 11— STOCK BASED COMPENSATION

Stock-Based Compensation Plans

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

As of December 31, 2022, the Company had 4,960,216 authorized shares available for future issuance under all of its stock incentive plans.

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

As of March 31, 2023, the Company had 4,939,274 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, 2022 and 2021 (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, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

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, 2022:

The following is a summary of option activity for the Company’s stock incentive plans for the nine months ended March 31, 2023:

Common Stock Options Outstanding

7 unchanged sentences

Forfeitures and cancellations

Balance, December 31, 2022

Vested as of December 31, 2022

Vested and exercisable as of December 31, 2022

During the three months ended December 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.0 million and $ 0.7 million, respectively, as determined as of the date of option exercise.

During the six months ended December 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.6 million and $ 1.3 million, respectively, as determined as of the date of option exercise.

As of December 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 six months ended December 31, 2022, and 2021.

Balance, March 31, 2023

Vested as of March 31, 2023

Vested and exercisable as of March 31, 2023

During the three months ended March 31, 2023 and 2022, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.0 million and $ 0.5 million, respectively, as determined as of the date of option exercise.

During the nine months ended March 31, 2023 and 2022, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.6 million and $ 1.8 million, respectively, as determined as of the date of option exercise.

As of March 31, 2023, 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, 2023, and 2022.

Restricted Stock Units (“RSUs”)

6 unchanged sentences

RSUs canceled ( 801 ) $ 276.53

Non-vested RSUs, December 31, 2022

Non-vested RSUs, March 31, 2023

61,349 $ 260.18

The intrinsic value of RSUs vested in the three months ended December 31, 2022 and 2021 was $ 0.6 million and $ 3.0 million, respectively.

The intrinsic value of RSUs vested in the six months ended December 31, 2022 and 2021 was $ 2.7 million and $ 6.0 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 15.2 million as of December 31, 2022.

As of December 31, 2022, there were unrecognized compensation costs related to RSUs of $ 8.4 million which the Company expects to recognize over a weighted average period of 3.1 years.

The intrinsic value of RSUs vested in the three months ended March 31, 2023 and 2022 was $ 3.1 million and $ 2.2 million, respectively.

The intrinsic value of RSUs vested in the nine months ended March 31, 2023 and 2022 was $ 5.8 million and $ 8.2 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 16.7 million as of March 31, 2023.

As of March 31, 2023, there were unrecognized compensation costs related to RSUs of $ 12.3 million which the Company expects to recognize over a weighted average period of 3.5 years.

NOTE 12— INCOME TAXES

The Company recorded tax provisions of $ 21.7 million and $ 39.9 million for the three and six months ended December 31, 2022 as compared to $ 19.0 million and $ 44.8 million for the three and six months ended December 31, 2021.

The increased provision for the three months ended December 31, 2022 is attributable to an increase in taxable income in higher tax jurisdictions as compared to the prior year.

The overall reduction to the tax provision for the six months ended December 31, 2022 is primarily related to the overall decrease in income before income taxes for the period.

The Company recorded tax provisions of $ 18.5 million and $ 58.3 million for the three and nine months ended March 31, 2023 as compared to $ 9.0 million and $ 53.8 million for the three and nine months ended March 31, 2022.

The increased provision for the three months ended March 31, 2023 is primarily related to the overall increase in income before income taxes for the period as compared to the three months ended March 31, 2022.

The increase to the tax provision for the nine months ended March 31, 2023 is attributable to the overall increase in income before income taxes for the period as well as an increase in taxable income in higher tax jurisdictions as compared to the prior year.

The Company’s estimated fiscal year 2023 effective tax rate, before discrete items, differs from the U.S.

3 unchanged sentences

operations under Global Intangible Low-Taxed Income ("GILTI") rules.

As of December 31, 2022, the Company had approximately $ 33.5 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended December 31, 2022, the Company recorded an increase of its unrecognized tax benefits of $ 1.5 million and a release of $ 1.3 million of its unrecognized tax benefits due to the lapse of the application statute of limitations for the quarter ended December 31, 2022.

As of March 31, 2023, the Company had approximately $ 34.9 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended March 31, 2023, the Company recorded an increase of its unrecognized tax benefits of $ 1.3 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 sheets.

As of December 31, 2022, the Company had $ 3.3 million accrued interest related to uncertain tax matters.

As of March 31, 2023, the Company had $ 3.5 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, file 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.

3 unchanged sentences

During fiscal years 2022, 2021, 2020, 2019, and 2018, the Company made a total of $ 3.0 million, $ 21.9 million, $ 15.5 million, $ 13.4 million, and $ 6.6 million of deposits with the Hong Kong IRD in connection with extending the statute of limitation for income tax examinations currently under audit for 2010-2016 tax years.

On March 2, 2022, the Company received notification that the Hong

Kong IRD is seeking an additional $ 23.5 million deposit covering the 2016 tax year.

The Company filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of $ 3.0 million which was remitted on May 23, 2022.

On March 30, 2023, the Company received notification that the Hong Kong IRD is seeking an additional $ 0.3 million deposit covering the 2017 tax year.

The Company has filed a formal protest in response to this notice and is awaiting a response from the Assessor's office.

The Company does not expect the deposit, with respect to the 2017 tax year, to be material in nature.

The refundable deposits are included within other long-term assets on our consolidated balance sheets.

9 unchanged sentences

The Appeals Officer issued a Notice of Deficiency on August 3, 2022, which upheld the position of the Examination Division.

The Company filed a petition with the United States Tax Court seeking to have the Notice of Deficiency reversed on October 24, 2022, and the IRS filed its answer on December 27, 2022.

The Company filed a petition with the United States Tax Court seeking to have the Notice of Deficiency reversed.

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,

2023 2022 2023 2022

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,

2023 2022 2023 2022

5 unchanged sentences

Total revenues $ 457,773 100 % $ 358,068 100 % $ 1,449,427 100 % $ 1,248,547 100 %

(1) Revenue for the United States was $ 209.4 million and $ 172.3 million for the three months ended December 31, 2022 and 2021, respectively.

Revenue for the United States was $ 419.7 million and $ 362.8 million for the six months ended December 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.

(1) Revenue for the United States was $ 214.3 million and $ 173.9 million for the three months ended March 31, 2023 and 2022, respectively.

Revenue for the United States was $ 634.0 million and $ 536.8 million for the nine months ended March 31, 2023 and 2022 , respectively.

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

Customers with an accounts receivable balance of 10% or greater of total accounts receivable are presented below for the periods indicated:

Percentage of Accounts Receivable

March 31, June 30,

Customer A 12 % *

* denotes less than 10%

NOTE 14— SUBSEQUENT EVENTS

On January 31, 2023, the Company's Board of Directors had approved a quarterly cash dividend of $ 0.60 per share payable on February 21, 2023 to shareholders of record at the close of business on February 13, 2023.

First Amendment to Third Amended & Restated Credit Agreement

On April 3, 2023, the Company as borrower and certain domestic subsidiaries, as guarantors (the “Domestic Guarantors”) entered into a first amendment (the “First Amendment”) to the Third Amended and Restated Credit Agreement (as amended, the “Amended Credit Agreement”) with the financial institutions named as lenders therein and Wells Fargo.

The First Amendment added a new term loan facility in an aggregate principal amount of $ 250.0 million (the “First Amendment Term Loan”) which is payable in quarterly installments equal to $ 3.125 million, commencing with the quarter ended June 30, 2023, and has a maturity date of March 30, 2026.

The First Amendment Term Loan bears interest, at the Company’s option, at either (i) a floating rate per annum equal to Base Rate plus a margin of between 1.00 % and 1.75 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable Adjusted Term SOFR rate for a specified period, plus a margin of between 2.00 % and 2.75 %, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter.

The obligations of the Company and certain domestic subsidiaries under the First Amendment Term Loan are required to be guaranteed by the Domestic Guarantors and are collateralized by substantially all assets (excluding intellectual property) of the Company and the Domestic Guarantors.

The First Amendment also (a) provided that all loans bearing interest at a LIBOR rate under the Amended Credit Agreement (each, a “LIBOR Rate Loan”) and the applicable interest periods in respect of such LIBOR Rate Loans under the Amended Credit Agreement will not be renewed or extended and, upon the expiration or earlier termination of such interest periods, such LIBOR Rate Loans will be (i) repaid or (ii) converted to loans accruing at Base Rate (as defined in the Amended Credit Agreement) or Adjusted Term SOFR (as defined below), at the Company’s option;

(b) implemented “Adjusted Term SOFR” as a reference rate for borrowings under the Amended Credit Agreement, and (c) modified the definition of “Base Rate” to replace the LIBOR rate component with Adjusted Term SOFR.

Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50 % and (c) Adjusted Term SOFR for a one-month tenor in effect on such day plus 1 %;

each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or Adjusted Term SOFR, as applicable ( provided that clause (c) shall not be applicable during any period in which Adjusted Term SOFR is unavailable or unascertainable).

The Base Rate shall not be less than 1.00 %.

Adjusted Term SOFR is Term SOFR (as defined in the Amended Credit Agreement) plus 0.10 % per annum;

provided that Adjusted Term SOFR shall in no event be less than 0.00 %.

On May 5, 2023, the Company's Board of Directors had approved a quarterly cash dividend of $ 0.60 per share payable on May 22, 2023 to shareholders of record at the close of business on May 15, 2023.

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