| Supplemental Financial Information | Note 3. Supplemental Financial Information Balance Sheet Components Financing receivables A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset on the Company’s balance sheets. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year are included in other assets on the unaudited condensed consolidated balance sheets. The Company evaluates the credit quality of a customer at contract inception and monitors credit quality over the term of the underlying transactions. The Company performs a credit analysis for all new orders and reviews payment history, current order backlog, financial performance of the customers and other variables that augment or mitigate the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the contract term and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of non‑payment. The Company performs an assessment each quarter of the allowance for credit losses related to its financing receivables. A summary of the Company’s financing receivables is presented as follows (in thousands):
September 30, June 30,
Financing receivables $ 4,870 $ 5,854
Allowance for credit losses ( 798 ) ( 798 )
Total, net $ 4,072 $ 5,056
Reported as:
Current $ 1,713 $ 2,016
Non-current 2,359 3,040
Total, net $ 4,072 $ 5,056 Inventories Inventories consisted of the following (in thousands):
September 30, June 30,
Raw materials $ 64,889 $ 62,945
Work-in-process 11,028 17,469
Finished goods 74,060 64,736
Inventories $ 149,977 $ 145,150 The Company's inventories on the unaudited condensed consolidated balance sheets are net of reserves. Prepaid and Other Current Assets Prepaid and other current assets consisted of the following (in thousands):
September 30, June 30,
Value added tax receivables $ 10,445 $ 11,718
Prepaid commissions 5,791 5,866
Capitalized contract costs 1,793 1,782
Other prepaid assets 7,929 5,763
Other current assets 2,840 2,483
Total prepaid and other current assets $ 28,798 $ 27,612 Property and equipment, net Property and equipment, net, consisted of the following (in thousands):
September 30, June 30,
Furniture and fixtures $ 1,636 $ 1,581
Computer and office equipment 7,790 7,798
Software 12,887 5,191
Leasehold improvements 33,774 26,641
Machinery and equipment 44,479 44,779
Construction in progress 3,821 13,499
104,387 99,489
Less: Accumulated depreciation ( 79,424 ) ( 78,563 )
Property and equipment, net $ 24,963 $ 20,926 At September 30, 2023, software includes $ 7.7 million in capitalized costs for the completed transition of the Company's new enterprise resource planning system in August 2023. The Company will depreciate the enterprise resource planning system over five years. Depreciation expense related to property and equipment was $ 1.2 million and $ 1.1 million during the three months ended September 30, 2023 and 2022, respectively. Other Assets Other assets consisted of the following (in thousands):
September 30, June 30,
Capitalized contract costs $ 9,642 $ 9,244
Long-term accounts receivable 5,052 4,734
Capitalized software costs to be sold 3,185 2,853
Other long-term assets 3,274 3,276
Total other assets $ 21,153 $ 20,107 Other Accrued Liabilities Other accrued liabilities consisted of the following (in thousands):
September 30, June 30,
Value added tax liabilities $ 12,515 $ 12,368
Commissions due to third parties 6,685 10,499
Refunds due to customers 4,534 3,364
Accrued consulting 1,104 2,599
Accrued royalties 2,884 2,398
Income tax payable 1,431 900
Other liabilities 7,481 6,143
Total other accrued liabilities $ 36,634 $ 38,271 Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) are excluded from earnings and reported as a component of stockholders’ equity. The foreign currency translation adjustment results from those subsidiaries not using the U.S. Dollar as their functional currency since the majority of their economic activities are primarily denominated in their applicable local currency. Accordingly, all assets and liabilities related to these operations are translated to the U.S. Dollar at the current exchange rates at the end of each period. Revenues and expenses are translated at average exchange rates in effect during the period. The components of accumulated other comprehensive income (loss) in the stockholders' equity section of the Company’s unaudited condensed consolidated balance sheets are as follows (in thousands):
September 30, June 30,
Cumulative foreign currency translation adjustment $ ( 4,470 ) $ ( 2,332 )
Defined benefit pension obligation 2,754 2,754
Accumulated other comprehensive income (loss) $ ( 1,716 ) $ 422 Statements of Operations Other expense, net, consisted of the following (in thousands):
Three Months Ended
2023 2022
Interest expense $ ( 2,922 ) $ ( 2,262 )
Foreign currency exchange loss ( 956 ) ( 251 )
Other, net 197 ( 45 )
Total other expense, net $ ( 3,681 ) $ ( 2,558 ) |
