OSI SYSTEMS, INC. In this report, "OSI", the "Company", "we", "us", "our" and similar terms refer
to
This management's discussion and analysis of financial condition as ofDecember 31, 2021 and results of operations for the three and six months endedDecember 31, 2021 should be read in conjunction with management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year endedJune 30, 2021 filed with theSEC . Forward-Looking Statements
This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to our current expectations, beliefs, and projections concerning matters that are not historical facts. Words such as "project," "believe," "anticipate," "plan," "expect," "intend," "may," "should," "will," "would," and similar words and expressions are intended to identify forward-looking statements. Forward-looking statements include, without limitation, information provided regarding impact of the COVID-19 pandemic. Forward-looking statements are not guarantees of future performance and involve uncertainties, risks, assumptions and contingencies, many of which are outside our control. Assumptions upon which our forward-looking statements are based could prove to be inaccurate, and actual results may differ materially from those expressed in or implied by such forward-looking statements. Important factors that could cause our actual results to differ materially from those expectations are disclosed in this report, our Annual Report on Form 10-K for the fiscal year endedJune 30, 2021 (including Part I, Item 1, "Business," Part I, Item 1A, "Risk Factors" and Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations") and other documents filed by us from time to time with theSEC . Such factors, of course, do not include all factors that might affect our business and financial condition. We could be exposed to a variety of negative consequences as a result of delays related to the award of domestic and international contracts; failure to secure the renewal of key customer contracts; delays in customer programs; delays in revenue recognition related to the timing of customer acceptance; changes in domestic and foreign government spending, budgetary, procurement and trade policies adverse to our businesses; global economic uncertainty; impacts on our business related to or resulting from the COVID-19 pandemic such as material delays and cancellations of orders or deliveries thereon, supply chain disruptions, plant closures, or other adverse impacts on our ability to execute business plans; unfavorable currency exchange rate fluctuations; effect of changes in tax legislation; market acceptance of our new and existing technologies, products and services; our ability to win new business and convert any orders received to sales within the same fiscal year; enforcement actions in respect of any noncompliance with laws and regulations including export control and environmental regulations and the matters that are the subject of some or all of our investigations and compliance reviews, contract and regulatory compliance matters, and actions, which if brought, could result in judgments, settlements, fines, injunctions, debarment or penalties; and other risks and uncertainties, including but not limited to those detailed herein and from time to time in our otherSEC filings, which could have a material and adverse impact on our business, financial condition and results of operation. Many of the referenced risks could be amplified by the magnitude and duration of the COVID-19 pandemic. All forward-looking statements contained in this report are qualified in their entirety by this statement. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation other than as may be required under securities laws to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Executive Summary We are a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. We sell our products and provide related services in diversified markets, including homeland security, healthcare, defense and aerospace. We have three operating divisions: (a) Security, providing security and inspection systems and turnkey security screening solutions; (b) Healthcare, providing patient monitoring, diagnostic cardiology 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. 24 Table of Contents 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 53% of our total consolidated revenues for each of the six months endedDecember 31, 2020 and 2021. Healthcare Division. Through our Healthcare division, we design, manufacture, market and service patient monitoring, diagnostic cardiology and connected care systems globally for sale primarily to hospitals and medical centers. Our products monitor patients in critical, emergency and perioperative care areas of the hospital and provide information, through wired and wireless networks, to physicians and nurses who may be at the patient's bedside, in another area of the hospital or even outside the hospital. Revenues from our Healthcare division accounted for 20% and 19% of our total consolidated revenues for the six months endedDecember 31, 2020 and 2021, respectively. Optoelectronics and Manufacturing Division. Through our Optoelectronics and Manufacturing division, we design, manufacture and market optoelectronic devices and flex circuits and provide electronics manufacturing services globally for use in a broad range of applications, including aerospace and defense electronics, security and inspection systems, medical imaging and diagnostics, telecommunications, office automation, computer peripherals, industrial automation and consumer products. We provide our optoelectronic devices and electronics manufacturing services to OEM customers and to our own Security and Healthcare divisions. Revenues from external customers in our Optoelectronics and Manufacturing division accounted for 27% and 28% of our total consolidated revenues for the six months endedDecember 31, 2020 and 2021, respectively.
Trends and Uncertainties
The following is a discussion of certain trends and uncertainties that we believe have influenced, and may continue to influence, our results of operations.
Coronavirus Pandemic. The coronavirus disease 2019 ("COVID-19") pandemic,
including the emergence of new variants, has dramatically impacted the global
health and economic environment, with millions of confirmed cases, business
slowdowns and shutdowns, and market volatility. The COVID-19 pandemic has
caused, and is likely to continue to cause, significant economic disruptions and
has impacted, and is expected to continue to impact, our operations and the
operations of our suppliers, logistics providers and customers as a result of
quarantines, facility closures and travel and logistics restrictions. Our
ability to continue to operate without significant negative impacts will in part
depend on our ability to protect our employees and our supply chain and to keep
our manufacturing facilities open and operating effectively. We have endeavored
to implement government and health authority recommendations to protect our
employees worldwide including with respect to vaccine administration. While we
do not expect these pandemic-related impacts to be long-term, there is
substantial uncertainty regarding the duration, scope, and ultimate impact of
the COVID-19 pandemic. During the early stages of the pandemic and continuing to
a lesser extent throughout the duration of the pandemic, our Healthcare division
experienced increased demand for certain products as a result of COVID-19. In
our Security division, throughout the pandemic, receipt of certain orders has
been delayed, most notably with respect to our aviation and cargo products, and
our revenues have been adversely impacted as a result of the pandemic. As many
customers of our Security division continue to be impacted by the pandemic, we
have received and could receive further requests to delay deliveries of
equipment and modify service arrangements or the scheduling of factory or site
acceptance tests, which has impacted, and could further impact, timing of
revenue recognition. In addition, as a result of COVID-19 related government
regulations, certain of our global manufacturing facilities have had to limit
operations and might have to limit operations in the future. While we have been
able to broadly maintain our operations, we experienced some disruption in our
supply chain in certain markets due primarily to materials shortages, longer
lead times on deliveries and transportation constraints. If these business
interruptions resulting from COVID-19 were to be prolonged or expanded in scope,
our business, financial condition, results of operations and cash flows would be
materially and adversely impacted. We intend to continue to actively monitor the
situation and may take further actions that alter our business operations as may
be required by federal, state or local authorities or that we determine are in
our best interests and the best interests of our employees, suppliers and
customers.
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Table of Contents
Global Economic Considerations. Our products and services are sold in numerous
countries worldwide, with a large percentage of our sales generated outside the
United States . Therefore, we are exposed to and impacted by global macroeconomic
factors, U.S. and foreign government policies and foreign exchange fluctuations.
Global economic conditions continue to be highly volatile due to the COVID-19
pandemic, resulting in market size contractions in certain countries due to
economic slowdowns and government restrictions on movement. In addition to the
COVID-19 pandemic, these other global macroeconomic factors, coupled with the
U.S. political climate and political unrest internationally, have created
uncertainty and impacted demand for certain of our products and services. We do
not know how long this uncertainty will continue. These factors could have a
material negative effect on our business, results of operations and financial
condition.
Global Trade. In addition to the COVID-19 pandemic, the current domestic and
international political environment, including in relation to recent and further
potential changes by the U.S. and other countries in policies on global trade
and tariffs, have resulted in uncertainty surrounding the future state of the
global economy and global trade. This uncertainty is exacerbated by sanctions
imposed by the U.S. government against certain businesses and individuals in
select countries. Continued or increased uncertainty regarding global trade due
to these or other factors may require us to modify our current business
practices and could have a material adverse effect on our business, results of
operations and financial condition.
Healthcare Considerations. As described above, our Healthcare division
experienced some increased demand for its patient monitoring products as a
result of the COVID-19 pandemic during the earlier stages of the pandemic that
has continued to a lesser extent throughout the duration of the pandemic.
Increased healthcare capital purchases made in prior periods may result in fewer
capital purchases in subsequent periods. The pandemic may also impact our
ability to manufacture product needed to timely fill orders if we experience
supply chain disruptions or need to close any manufacturing facility due to
employee COVID-19 cases or local government regulations.
European Union Threat Detection Standards. The EU has implemented regulations
for all airports within the EU that use explosive detection systems to have hold
baggage screening systems that are compliant with the European Civil Aviation
Conference (ECAC) Standard 3. The deadline for compliance with this mandate was
initially set for September 2020 . Given the uncertainty surrounding the COVID-19
pandemic, the EU revised the regulations, and the date by which airports using
explosive detection systems for hold baggage screening must meet Standard 3 has
been changed to March 2024 , with certain larger airports required to meet
earlier installation dates. Our Security division's real time tomography (RTT)
product has passed the ECAC explosive detection system Standard 3 threat
detection requirement.
Government Policies. Our results of operations and cash flows could be
materially affected by changes in
Changes in Costs and Supply Chain Disruptions. Our costs are subject to fluctuations, particularly due to changes in raw material, component, and logistics costs. Our manufacturing and supply chain operations, including freight and shipping activities, have been and may continue to be impacted by increased vendor costs as well as the current global supply chain bottleneck. Specifically, we are impacted by the global shortage of electronic components and other materials needed for production and freight availability. We expect continued disruptions in obtaining material and freight availability as the world economies react to and recover from supply chain shortages. This increased cost environment has been exacerbated by the COVID-19 pandemic. Although we strive to implement, achieve, and sustain cost containment measures, including supply chain optimization and general overhead and workforce optimization, if we are unable to mitigate the impact of increased costs through pricing or other actions, there could be a negative impact on our business, results of operations, and financial condition.
Results of Operations for the Three Months Ended
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Net Revenues
The table below and the discussion that follows are based upon the way in which
we analyze our business. See Note 11 to the condensed consolidated financial
statements for additional information about our business segments.
Q2 % of Q2 % of
Fiscal 2021 Net Revenues Fiscal 2022 Net Revenues $ Change % Change
Security $ 145.2 53 % $ 145.9 53 % $ 0.7 0.5 %
Healthcare 54.9 20 52.4 19 (2.5) (4.5)Optoelectronics and Manufacturing 75.9 27
78.4 28 2.5 3.3 Total net revenues$ 276.0 100 %$ 276.7 100 %$ 0.7 0.3 % Revenues for the Security division during the three months endedDecember 31, 2021 were relatively comparable year over year. Our service revenues increased by approximately$3.1 million whereas our product revenues decreased by approximately$2.4 million as compared to the prior year comparable period. Revenues for the Healthcare division during the three months endedDecember 31, 2021 decreased 4.5% year-over-year. While cardiology sales increased by approximately$1.0 million and service, supplies and accessories sales increased by approximately$0.4 million , patient monitoring sales decreased by approximately$3.9 million . Revenues for the Optoelectronics and Manufacturing division during the three months endedDecember 31, 2021 increased year-over year as a result of an increase in revenue in our optoelectronics business of approximately$3.2 million , offset by a reduction in revenue of approximately$0.7 million in our contract manufacturing business. Gross Profit Q2 % of Q2 % of Fiscal 2021 Net Revenues Fiscal 2022 Net Revenues Gross profit$ 102.1 37.0 %$ 99.8 36.1 % Gross profit is impacted by sales volume, productivity, and changes in overall manufacturing-related costs, such as raw materials and component costs, warranty expense, provision for inventory, freight, and logistics. Our cost of goods sold increased year-over-year primarily as a result of the mix of revenues and higher raw material and freight costs. Gross profit as a percentage of net revenues during the quarter endedDecember 31, 2021 decreased on a year-over-year basis due to (i) a reduction in the Security division gross margins due to a less favorable sales mix and increased component, freight and travel costs and (ii) reduced revenues in our Healthcare division, which carries the highest gross margin of our three divisions. Our gross margin increased within the Optoelectronics and Manufacturing division due to a more favorable sales mix. Operating Expenses Q2 % of Q2 % of Fiscal 2021 Net Revenues Fiscal 2022 Net Revenues $ Change % Change
Selling, general and 56.1 20.3 54.9 19.8 (1.2) (2.1) administrative $ % $ % $ % Research and development 13.8 5.0 15.0 5.4 1.2 8.7 Impairment, restructuring and (0.2) - 0.8 0.3 1.0 500.0 other charges (benefit), net Total operating expenses$ 69.7 25.3 %$ 70.7 25.5 %$ 1.0 1.4 % Selling, general and administrative. Our significant selling, general and administrative (SG&A) expenses include employee compensation, sales commissions, travel, professional services, marketing expenses, and depreciation and amortization expense. SG&A expense for the three months endedDecember 31, 2021 was lower than such expense in the same prior-year period due to a reduced provision for losses on accounts receivable coupled with certain bad debt recoveries totaling$4.9 million and other miscellaneous reductions of$1.5 million . This decrease was offset by an increase in compensation expense of
$5.2 million . 27 Table of Contents Research and development. Research and development (R&D) expenses include research related to new product development and product enhancements. The increase in R&D expense during the three months endedDecember 31, 2021 from the same prior-year period reflected an increase in compensation expense and outside services of approximately$1.8 million to support new product development initiatives primarily in our Security and Healthcare divisions. This increase was partially offset by other reductions in R&D expense of approximately$0.6 million .
Impairment, restructuring and other charges. Impairment, restructuring and other charges generally consist of charges relating to reductions in our workforce, facilities consolidation, impairment of assets, costs related to acquisition activity, legal charges and other non-recurring charges. During the three months endedDecember 31, 2021 , impairment, restructuring and other charges primarily consisted of$0.5 million for legal charges and$0.3 million in charges for employee terminations. During the three months endedDecember 31, 2020 , we recognized a net benefit of$0.5 million for reimbursements from our insurance carriers for covered legal charges, partially offset by additional legal fees related to class action litigation and government investigations. This was partially offset by charges of$0.1 million for employee terminations from operational efficiency activities and$0.2 million for acquisition-related activities. Interest and other expense, net. For the three months endedDecember 31, 2021 , interest and other expense, net was$2.2 million as compared to$4.2 million in the same prior-year period. This decrease was driven by our adoption of ASU 2020-06 (see Note 1 to the condensed consolidated financial statements for further discussion) and was partially offset by higher average levels of borrowing under our revolving credit facility during the three months endedDecember 31, 2021 in comparison with the levels of borrowing during the same period in the prior year. Interest expense during the three months endedDecember 31, 2021 and 2020 included$0.1 and$2.3 million of non-cash interest expense, respectively, primarily related to the Notes Income taxes. The effective tax rate for a particular period varies depending on a number of factors, including (i) the mix of income earned in various tax jurisdictions, each of which applies a unique range of income tax rates and income tax credits, (ii) changes in previously established valuation allowances for deferred tax assets (changes are based upon our current analysis of the likelihood that these deferred tax assets will be realized), (iii) the level of non-deductible expenses, (iv) certain tax elections (v) tax holidays granted to certain of our international subsidiaries and (vi) discrete tax items. For the three months endedDecember 31, 2021 , we recognized a provision for income taxes of$7.1 million compared to$8.1 million for the comparable prior-year period. The effective tax rates for the three months endedDecember 31, 2021 and 2020 were 26.3% and 28.8%, respectively. During each of the three month periods endedDecember 31, 2021 and 2020, we recognized a net discrete tax provision of$0.3 million for changes in prior year tax estimates and equity-based compensation under ASU 2016-09. Results of Operations for the Six Months EndedDecember 31, 2020 (YTD Q2 Fiscal 2021) Compared to the Six Months EndedDecember 31, 2021 (YTD Q2 Fiscal 2022) (amounts in millions) Net Revenues The table below and the discussion that follows are based upon the way in which we analyze our business. See Note 11 to the condensed consolidated financial statements for additional information about our business segments. YTD Q2 % of YTD Q2 % of Fiscal 2021 Net Revenues Fiscal 2022 Net Revenues $Change % Change Security$ 280.0 53 %$ 295.4 53 %$ 15.4 6 % Healthcare 106.4 20 103.0 19 (3.4) (3) Optoelectronics and Manufacturing 144.5 27
157.5 28 13.0 9
Total net revenues $ 530.9 100 % $ 555.9 100 % $ 25.0 5 %
Revenues for the Security division during the six months endedDecember 31, 2021 increased on a year-over-year basis. Our product revenues increased by approximately$13.1 million , and our service revenues increased by approximately$2.3 million as compared to the prior year comparable period. Revenues for the Healthcare division during the six months endedDecember 31, 2021 decreased 3% year-over-year. While cardiology sales increased by approximately$2.4 million and service, supplies and accessories sales increased by approximately$1.6 million , patient monitoring sales decreased by approximately$7.4 million . 28 Table of Contents
Revenues for the Optoelectronics and Manufacturing division during the six months endedDecember 31, 2021 increased year-over year as a result of an increase in revenue in our contract manufacturing business of approximately$7.9 million coupled with an increase in sales of approximately$5.1 million in our optoelectronics business. Gross Profit YTD Q2 % of YTD Q2 % of Fiscal 2021 Net Revenues Fiscal 2022 Net Revenues Gross profit$ 197.8 37.3 %$ 199.1 35.8 %
The overall increase in gross profit was driven by the increase in revenues for the Security and Optoelectronics and Manufacturing divisions which was somewhat mitigated by lower sales in our Healthcare division. Our cost of goods sold increased year-over-year primarily as a result of the increase in revenues and higher raw material and freight costs. Gross profit as a percentage of net revenues during the six months endedDecember 31, 2021 decreased on a year-over-year basis due to (i) strong sales growth within our Optoelectronics and Manufacturing division (which has the lowest gross margin among our divisions), (ii) a reduction in revenues in our Healthcare division (which has the highest gross margin among our divisions), and (iii) a reduction in the Security division gross margins due to a less favorable sales mix, reduced service gross margin, and increased component, freight and travel costs. Operating Expenses YTD Q2 % of YTD Q2 % of Fiscal 2021 Net Revenues
Fiscal 2022 Net Revenues $Change % Change
Selling, general and administrative
21.6 % $ 112.2 20.2 % $ (2.5) (2.2) %
Research and development 25.9 4.9 29.8 5.4 3.9 15.1
Impairment, restructuring and other
charges (benefit), net 8.2 1.5 3.3 0.6 (4.9) (59.8)
Total operating expenses $ 148.8 28.0 % $ 145.3 26.2 %$ (3.5) (2.4) %
Selling, general and administrative. SG&A expense for the six months endedDecember 31, 2021 was lower than such expense in the same prior-year period due to reduced provision for losses on accounts receivable coupled with certain bad debt recoveries totaling$9.2 million as well as a net benefit of$2.9 million for the change in contingent consideration. These decreases were partially offset by an increase in employee compensation expense of$7.7 million and increased travel, entertainment, and marketing expense of$1.9 million . Research and development. The increase in R&D expense during the six months endedDecember 31, 2021 from the same prior-year period reflected higher employee compensation expenses of$4.2 million and$1.3 million in supplies and research expenses to support new product development initiatives primarily in our Security and Healthcare divisions. This increase was partially offset by other reductions in R&D expense of approximately$1.6 million . Impairment, restructuring and other charges (benefit). During the six months endedDecember 31, 2021 , impairment, restructuring and other charges of$3.3 million consisted of$2.7 million for legal charges and$0.7 million in charges for employee terminations.
During the six months endedDecember 31, 2020 , we incurred$7.2 million for exit activities associated with an expired turnkey contract inMexico . Such exit costs commenced in the first quarter of the 2021 fiscal year and include$2.8 million for employee terminations,$1.1 million for facility closure and other exit costs, direct transaction costs of$2.7 million , and$0.6 million for right-of-use asset impairment. We also incurred costs of$1.2 million for employee terminations and facility closure costs for operational efficiency activities and$0.3 million for acquisition-related activities, partially offset by a net benefit of$0.5 million for reimbursements from our insurance carriers for covered legal charges. Interest and other expense, net. For the six months endedDecember 31, 2021 , interest and other expense, net was$4.2 million as compared to$8.4 million in the comparable prior-year period. This decrease was driven by our adoption of ASU 2020-06 (see Note 1 to the condensed consolidated financial statements for further discussion) and was partially offset by higher average levels of borrowing under our revolving credit facility during the six months endedDecember 31, 2021 compared to the same period in the prior year. Interest expense during the six months endedDecember 31, 2021 and 2020 included$0.1 million and$4.5 million of non-cash interest expense, which was primarily
related to the Notes.
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Income taxes. For the six months ended December, 2021 and 2020, we recognized a
provision for income taxes of $10.7 million and $11.2 million , respectively. The
effective tax rate for the six months ended December 31, 2021 and 2020 was 21.6%
and 27.7%, respectively. During the six months ended December 31, 2021 , we
recognized a net discrete tax benefit of $1.8 million , which was comprised of
$2.0 million related to equity-based compensation under ASU 2016-09 partially
offset by a discrete tax expense for prior year tax estimates of $0.2 million .
During the six months ended December 31, 2020 , we recognized a net discrete tax
expense of $0.1 million related to change in prior year tax estimates of $0.4
million offset by a tax benefit of $0.3 for equity-based compensation underASU 2016-09.
Liquidity and Capital Resources
Our principal sources of liquidity are our cash and cash equivalents, cash generated from operations and our credit facilities. Cash and cash equivalents totaled$86.3 million atDecember 31, 2021 , a increase of$5.7 million , or 7.1%, from$80.6 million atJune 30, 2021 . We currently anticipate that our available funds, credit facilities and cash flow from operations will be sufficient to meet our operational cash needs for the next 12 months and the foreseeable future. In addition, we anticipate that cash generated from operations, without repatriating earnings from our non-U.S. subsidiaries, and our credit facilities will be sufficient to satisfy our obligations in theU.S. We have a$750 million credit facility that is comprised of a$600 million revolving credit facility, which includes a$300 million subfacility for letters of credit, and a$150 million delayed draw term loan. The term loan, which was undrawn as ofDecember 31, 2021 , is available to us to draw throughSeptember 1, 2022 . As ofDecember 31, 2021 , there were$81.6 million of borrowings outstanding under our revolving credit facility,and$84.2 million of outstanding letters of credit.
Cash Provided by Operating Activities. Cash flows from operating activities can fluctuate significantly from period to period, as net income, adjusted for non-cash items, and working capital fluctuations impact cash flows. During the six months endedDecember 31, 2021 , we generated cash from operations of$3.4 million compared to$89.5 million in the same prior-year period. This decrease was driven by increases in inventory, a decrease in the amount of advance deposits received from customers and other changes in net working capital. Cash Used in Investing Activities. Net cash used in investing activities was$15.4 million for the six months endedDecember 31, 2021 as compared to$20.5 million in the same prior-year period. Capital expenditures in the six-month period endedDecember 31, 2021 were$7.1 million compared to$8.5 million in the same prior-year period. Expenditures for intangible and other assets in the six-month period endedDecember 31, 2021 were$8.1 million compared to$7.0 million in the same prior-year period. In addition, during the six months endedDecember 31, 2020 , we used cash of$3.0 million for the acquisition of a business. Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities was$17.6 million during the six months endedDecember 31, 2021 , compared to$75.4 million used in financing activities during the same prior-year period. The changes in cash provided by (used in) financing activities primarily relate to (i) net proceeds from borrowings on bank lines of credit totaling$81.6 million in the six month period endedDecember 31, 2021 compared to net repayments of borrowings of$41.0 million in the same prior-year period and (ii)$64.4 million used for share repurchases and taxes paid related to the net share settlement of equity awards in the six month period endedDecember 31, 2021 compared to$36.1 million for the same prior-year period.
Borrowings
See Note 7 to the condensed consolidated financial statements for a detailed discussion regarding our revolving credit facility and our Notes.
Cash Held by Foreign Subsidiaries
Our cash and cash equivalents totaled$86.3 million atDecember 31, 2021 . Of this amount, approximately 72% was held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were held primarily by our subsidiaries in theUnited Kingdom ,Singapore ,India ,Malaysia andCanada and, to a lesser extent, inAustralia ,Albania ,Indonesia andMexico among others. We intend to permanently reinvest certain earnings from foreign operations, and we currently do not anticipate that we will need this cash in foreign countries to fund ourU.S. operations. In the event we repatriate cash from certain foreign operations and if taxes have not previously been withheld on the related earnings, we would provide for withholding taxes at the time we change our intention with regard to the reinvestment of those earnings. 30 Table of Contents
Issuer Purchases of
The following table contains information about the shares of common stock we
purchased during the quarter ended
Maximum number (or
approximate dollar
value) of
Total number of shares (or
shares (or units) units)
purchased as that may
Total number of Average price part of publicly yet be purchased
shares (or units) paid per share (or announced plans or under the plans or
purchased unit) programs programs (1)
October 1 to October 31, 2021 - $ - - 2,379,489
November 1 to November 30, 2021 174,770 93.84 174,770 2,204,719
December 1 to December 31, 2021 138,020 91.64 138,020 2,066,699
312,790 312,790
In
of up to 1,000,000 shares of common stock. In
Directors increased the maximum number of shares to 3,000,000 shares (1) authorized under the stock repurchase program. Upon repurchase, the shares
are restored to the status of authorized but unissued shares, and we record
them as a reduction in the number of shares of common stock issued and
outstanding in our consolidated financial statements.
Contractual Obligations
During the six months ended December 31, 2021 , there were no material changes
outside the ordinary course of business to the information regarding specified
contractual obligations contained in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2021 . See Notes 1, 5, 7 and 9 to the condensed
consolidated financial statements for additional information regarding our
contractual obligations.
Off-Balance Sheet Arrangements
As of
Recent Accounting Pronouncements
For information with respect to recent accounting pronouncements and the potential impact of those pronouncements on our condensed consolidated financial statements, see Note 1 to the condensed consolidated financial statements.
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