|
||||||||||||||||||||||||||
| SEC Info℠ | | | Home | | | Search | | | My Interests | | | Help | | | Sign In | | | Please Sign In | |||||||
|
||||||||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size 8/10/22 CSP Inc./MA 10-Q 6/30/22 74:10M |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 2.66M
2: EX-31.1 Certification -- §302 - SOA'02 HTML 23K
3: EX-31.2 Certification -- §302 - SOA'02 HTML 23K
4: EX-32.1 Certification -- §906 - SOA'02 HTML 23K
10: R1 Document And Entity Information HTML 74K
11: R2 Condensed Consolidated Balance Sheets HTML 135K
12: R3 Condensed Consolidated Balance Sheets HTML 30K
(Parenthetical)
13: R4 Condensed Consolidated Statements of Operations HTML 119K
14: R5 Condensed Consolidated Statements of Comprehensive HTML 40K
Income (Loss)
15: R6 Condensed Consolidated Statement of Shareholders' HTML 87K
Equity
16: R7 Condensed Consolidated Statements of Cash Flows HTML 145K
17: R8 Basis of Presentation HTML 23K
18: R9 Use of Estimates HTML 22K
19: R10 Recent Accounting Pronouncements HTML 33K
20: R11 Revenue HTML 210K
21: R12 Earnings Per Share of Common Stock HTML 74K
22: R13 Accounts and Long-Term Receivable HTML 36K
23: R14 Inventories HTML 35K
24: R15 Leases HTML 91K
25: R16 Accounts payable and other noncurrent liabilities HTML 39K
26: R17 Notes Payable and Line of Credit HTML 45K
27: R18 Pension and Retirement Plans HTML 197K
28: R19 Income Taxes HTML 25K
29: R20 Accumulated Other Comprehensive Loss HTML 33K
30: R21 Fair Value of Financial Assets and Liabilities HTML 71K
31: R22 Segment Information HTML 255K
32: R23 Repurchase of Common Stock HTML 22K
33: R24 Subsequent Events HTML 22K
34: R25 Revenue (Tables) HTML 192K
35: R26 Earnings Per Share of Common Stock (Tables) HTML 71K
36: R27 Accounts and Long-Term Receivable (Tables) HTML 30K
37: R28 Inventories (Tables) HTML 35K
38: R29 Leases (Tables) HTML 92K
39: R30 Accounts payable and other noncurrent liabilities HTML 35K
(Tables)
40: R31 Notes Payable and Line of Credit (Tables) HTML 35K
41: R32 Pension and Retirement Plans (Tables) HTML 193K
42: R33 Accumulated Other Comprehensive Loss (Tables) HTML 33K
43: R34 Fair Value of Financial Assets and Liabilities HTML 63K
(Tables)
44: R35 Segment Information (Tables) HTML 253K
45: R36 Basis of Presentation - Narrative (Details) HTML 22K
46: R37 Revenue - Schedule of Disaggregation of Revenue HTML 73K
(Details)
47: R38 Revenue - Revenue Recognition (Details) HTML 62K
48: R39 Revenue - Performance Obligations (Details) HTML 32K
49: R40 Earnings Per Share of Common Stock - Basic and HTML 62K
diluted earnings per share computations (Details)
50: R41 Earnings Per Share of Common Stock - Anti-dilutive HTML 27K
(Details)
51: R42 Accounts and Long-Term Receivable (Details) HTML 82K
52: R43 Inventories (Details) HTML 28K
53: R44 Leases - Components of lease costs (Details) HTML 40K
54: R45 Leases - Supplemental cash flow information HTML 33K
(Details)
55: R46 Accounts payable and other noncurrent liabilities HTML 31K
- Narrative (Details)
56: R47 Accounts payable and other noncurrent liabilities HTML 34K
- Agreements with Vendors (Details)
57: R48 Notes Payable and Line of Credit - Notes Payable HTML 41K
Narrative (Details)
58: R49 Notes Payable and Line of Credit - Current and HTML 36K
Noncurrent Portion (Details)
59: R50 Notes Payable and Line of Credit - Line of Credit HTML 48K
(Details)
60: R51 Pension and Retirement Plans - Narrative (Details) HTML 27K
61: R52 Pension and Retirement Plans - Components of net HTML 60K
periodic benefit costs (Details)
62: R53 Pension and Retirement Plans - Fair value of the HTML 41K
assets (Details)
63: R54 Income Taxes (Details) HTML 23K
64: R55 Accumulated Other Comprehensive Loss (Details) HTML 30K
65: R56 Fair Value of Financial Assets and Liabilities HTML 55K
(Details)
66: R57 Segment Information - Operating Segments (Details) HTML 80K
67: R58 Segment Information - Major customers (Details) HTML 43K
68: R59 Repurchase of Common Stock (Details) HTML 26K
69: R60 Subsequent Events (Details) HTML 25K
72: XML IDEA XML File -- Filing Summary XML 131K
70: XML XBRL Instance -- cspi-20220630x10q_htm XML 3.04M
71: EXCEL IDEA Workbook of Financial Reports XLSX 119K
6: EX-101.CAL XBRL Calculations -- cspi-20220630_cal XML 192K
7: EX-101.DEF XBRL Definitions -- cspi-20220630_def XML 482K
8: EX-101.LAB XBRL Labels -- cspi-20220630_lab XML 1.07M
9: EX-101.PRE XBRL Presentations -- cspi-20220630_pre XML 753K
5: EX-101.SCH XBRL Schema -- cspi-20220630 XSD 140K
73: JSON XBRL Instance as JSON Data -- MetaLinks 372± 543K
74: ZIP XBRL Zipped Folder -- 0000356037-22-000028-xbrl Zip 342K
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM i 10-Q
i ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended i June 30, 2022
or
i ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number i 0-10843
i CSP Inc.
(Exact name of Registrant as specified in its charter)
| |
i Massachusetts | i 04-2441294 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| |
i 01854 | |
(Address of principle executive offices) | (Zip Code) |
( i 978)- i 954-5038
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes x No ◻.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes x No ◻.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | |
| | | |
Large accelerated filer | ◻ | Accelerated filer | ◻ |
| | | |
i Non-accelerated filer | ⌧ | Smaller reporting company | i ⌧ |
| | | |
Emerging growth company | i ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ◻ No i ⌧
Securities registered pursuant to Section 12(b) of the Act:
| | | | |
Title of Each Class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
i Common Stock, par value $0.01 per share | | i CSPI | | i Nasdaq Global Market |
As of August 8, 2022, the registrant had i 4,555,816 shares of common stock issued and outstanding.
INDEX
| | Page |
| | |
| ||
| | |
| ||
| | |
| Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and September 30, 2021 | 3 |
| | |
| 4 | |
| | |
| 5 | |
| | |
| 6 | |
| | |
| 8 | |
| | |
| Notes to Condensed Consolidated Financial Statements (unaudited) | 9 |
| | |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | |
| | |
35 | ||
| | |
| ||
| | |
35 | ||
| 36 | |
| | |
36 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value)
| | | | | | |
| | June 30, | | |||
|
| 2022 |
| 2021 | ||
| | Unaudited | | | Audited | |
ASSETS |
| |
|
| |
|
Current assets: |
| |
|
| |
|
Cash and cash equivalents | | $ | i 21,415 | | $ | i 20,007 |
Accounts receivable, net of allowances of $ i 115 and $ i 142 | |
| i 18,648 | |
| i 18,698 |
Investment in lease, net-current portion | |
| i 25 | |
| i 68 |
Inventories | |
| i 5,607 | |
| i 3,989 |
Refundable income taxes | |
| i 1,126 | |
| i 1,656 |
Other current assets | |
| i 5,473 | |
| i 4,616 |
Total current assets | |
| i 52,294 | |
| i 49,034 |
| | | | | | |
| | | | | | |
Property, equipment and improvements, net | |
| i 722 | |
| i 764 |
Operating lease right-of-use assets | | | i 944 | | | i 1,358 |
Intangibles, net | |
| i 12 | |
| i 19 |
Investment in lease, net-less current portion | |
| i 6 | |
| i 15 |
Long-term receivable | | | i 5,345 | |
| i 7,522 |
Cash surrender value of life insurance | |
| i 5,131 | |
| i 4,194 |
Other assets | |
| i 62 | |
| i 68 |
Total assets | | $ | i 64,516 | | $ | i 62,974 |
| | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |
|
| |
|
|
Current liabilities: | |
|
| |
|
|
Accounts payable and accrued expenses | | $ | i 13,402 | | $ | i 13,928 |
Line of credit | | | i 2,999 | | | i 941 |
Notes payable - current portion | | | i 511 | | | i 757 |
Deferred revenue | |
| i 4,669 | |
| i 1,893 |
Pension and retirement plans | |
| i 404 | |
| i 308 |
Total current liabilities | |
| i 21,985 | |
| i 17,827 |
Pension and retirement plans | |
| i 3,559 | |
| i 4,097 |
Notes payable - noncurrent portion | | | i 443 | | | i 876 |
Operating lease liabilities - noncurrent portion | | | i 479 | | | i 821 |
Income taxes payable | |
| i 524 | |
| i 524 |
Other noncurrent liabilities | |
| i 3,050 | |
| i 4,783 |
Total liabilities | |
| i 30,040 | |
| i 28,928 |
| | | | | | |
Shareholders’ equity: | |
|
| |
|
|
Common stock, $ i i .01 / par value per share; authorized, i i 7,500 / shares; issued and outstanding i 4,536 and i 4,394 shares, respectively | |
| i 46 | |
| i 45 |
Additional paid-in capital | |
| i 19,074 | |
| i 18,258 |
Retained earnings | |
| i 25,514 | |
| i 25,191 |
Accumulated other comprehensive loss | |
| ( i 10,158) | |
| ( i 9,448) |
Total shareholders’ equity | |
| i 34,476 | |
| i 34,046 |
Total liabilities and shareholders’ equity | | $ | i 64,516 | | $ | i 62,974 |
See accompanying notes to unaudited condensed consolidated financial statements.
3
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except for per share data)
(Unaudited)
| | | | | | | | | | | | | |
| | Three months ended | | Nine months ended | | ||||||||
| | June 30, | | June 30, | | June 30, | | | |||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 | | ||||
Sales: |
| |
|
| |
| | |
|
| |
|
|
Product | | $ | i 8,438 | | $ | i 10,142 | | $ | i 25,375 | | $ | i 29,526 | |
Services | |
| i 4,888 | |
| i 3,579 | |
| i 12,301 | |
| i 9,671 | |
Total sales | |
| i 13,326 | |
| i 13,721 | |
| i 37,676 | |
| i 39,197 | |
| | | | | | | | | | | | | |
Cost of sales: | |
|
| |
|
| |
|
| |
|
| |
Product | |
| i 6,548 | |
| i 8,176 | |
| i 20,090 | |
| i 23,678 | |
Services | |
| i 1,804 | |
| i 1,316 | |
| i 4,798 | |
| i 3,544 | |
Total cost of sales | |
| i 8,352 | |
| i 9,492 | |
| i 24,888 | |
| i 27,222 | |
| | | | | | | | | | | | | |
Gross profit | |
| i 4,974 | |
| i 4,229 | |
| i 12,788 | |
| i 11,975 | |
| | | | | | | | | | | | | |
Operating expenses: | |
|
| |
|
| |
|
| |
|
| |
Engineering and development | |
| i 884 | |
| i 700 | |
| i 2,228 | |
| i 2,191 | |
Selling, general and administrative | |
| i 4,071 | |
| i 3,886 | |
| i 10,961 | |
| i 10,799 | |
Total operating expenses | |
| i 4,955 | |
| i 4,586 | |
| i 13,189 | |
| i 12,990 | |
Operating income (loss) | |
| i 19 | |
| ( i 357) | |
| ( i 401) | |
| ( i 1,015) | |
| | | | | | | | | | | | | |
Other income (expense): | |
|
| |
|
| |
|
| |
|
| |
Foreign exchange gain (loss) | |
| i 618 | |
| ( i 110) | |
| i 777 | |
| ( i 731) | |
Interest expense | |
| ( i 80) | |
| ( i 131) | |
| ( i 286) | |
| ( i 244) | |
Interest income | |
| i 158 | |
| i 175 | |
| i 429 | |
| i 406 | |
Gain on forgiveness of debt | | | i — | | | i — | | | i — | | | i 2,196 | |
Other income (expense), net | |
| ( i 20) | |
| i 35 | |
| ( i 17) | |
| i 137 | |
Total other income (expense), net | |
| i 676 | |
| ( i 31) | |
| i 903 | |
| i 1,764 | |
Income (loss) before income taxes | | | i 695 | |
| ( i 388) | | | i 502 | |
| i 749 | |
Income tax expense | | | i 11 | |
| i 35 | | | i 28 | |
| i 868 | |
Net income (loss) | | $ | i 684 | | $ | ( i 423) | | $ | i 474 | | $ | ( i 119) | |
Net income (loss) attributable to common shareholders | | $ | i 646 | | $ | ( i 423) | | $ | i 450 | | $ | ( i 119) | |
| | | | | | | | | | | | | |
Net income (loss) per common share - basic | | $ | i 0.15 | | $ | ( i 0.10) | | $ | i 0.11 | | $ | ( i 0.03) | |
Weighted average common shares outstanding – basic | |
| i 4,280 | |
| i 4,179 | |
| i 4,251 | |
| i 4,137 | |
| | | | | | | | | | | | | |
Net income (loss) per common share - diluted | | $ | i 0.15 | | $ | ( i 0.10) | | $ | i 0.11 | | $ | ( i 0.03) | |
Weighted average common shares outstanding – diluted | |
| i 4,283 | |
| i 4,179 | |
| i 4,265 | |
| i 4,137 | |
See accompanying notes to unaudited condensed consolidated financial statements.
4
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)
(Unaudited)
| | | | | | | | | | | | | |
| | Three months ended | | Nine months ended | | ||||||||
| | June 30, | | June 30, | | June 30, | | | |||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 | | ||||
Net income (loss) | | $ | i 684 |
| $ | ( i 423) | | $ | i 474 |
| $ | ( i 119) | |
Foreign currency translation (loss) gain adjustments, net | |
| ( i 558) |
| | i 32 | |
| ( i 710) |
| | i 383 | |
Total comprehensive income (loss) | | $ | i 126 |
| $ | ( i 391) | | $ | ( i 236) |
| $ | i 264 | |
See accompanying notes to unaudited condensed consolidated financial statements.
5
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
For the three months ended June 30, 2022 and 2021:
(Amounts in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Additional | | | | | other | | Total | |||
| | | | | | | Paid-in | | Retained | | comprehensive | | Shareholders’ | ||||
Three Months Ended June 30, 2022: |
| Shares |
| Amount |
| Capital |
| Earnings |
| loss |
| Equity | |||||
Balance as of March 31, 2022 |
| i 4,533 | | $ | i 46 | | $ | i 18,820 | | $ | i 24,881 | | $ | ( i 9,600) | | $ | i 34,147 |
Net income |
| — | |
| — | |
| — | |
| i 684 | |
| — | |
| i 684 |
Other comprehensive loss |
| — | |
| — | |
| — | |
| — | |
| ( i 558) | |
| ( i 558) |
Stock-based compensation |
| — | |
| — | |
| i 254 | |
| — | |
| — | |
| i 254 |
Restricted stock cancellation | | ( i 1) | | | — | | | — | | | — | | | — | | | — |
Restricted stock issuance |
| i 10 | |
| — | |
| — | |
| — | |
| — | |
| — |
Purchase of common stock |
| ( i 6) | |
| — | |
| — | |
| ( i 51) | |
| — | |
| ( i 51) |
Balance as of June 30, 2022 |
| i 4,536 | | $ | i 46 | | $ | i 19,074 | | $ | i 25,514 | | $ | ( i 10,158) | | $ | i 34,476 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Additional | | | | | other | | Total | |||
| | | | | | | Paid-in | | Retained | | comprehensive | | Shareholders’ | ||||
Three Months Ended June 30, 2021: |
| Shares |
| Amount |
| Capital |
| Earnings |
| loss |
| Equity | |||||
Balance as of March 31, 2021 |
| i 4,394 | | $ | i 44 | | $ | i 17,605 | | $ | i 24,796 | | $ | ( i 11,644) | | $ | i 30,801 |
Net loss |
| — | |
| — | |
| — | |
| ( i 423) | |
| — | |
| ( i 423) |
Other comprehensive income |
| — | |
| — | |
| — | |
| — | |
| i 32 | |
| i 32 |
Stock-based compensation |
| — | |
| — | |
| i 243 | |
| — | |
| — | |
| i 243 |
Restricted stock cancellation |
| ( i 17) | |
| — | |
| — | |
| — | |
| — | |
| — |
Balance as of June 30, 2021 |
| i 4,377 | | $ | i 44 | | $ | i 17,848 | | $ | i 24,373 | | $ | ( i 11,612) | | $ | i 30,653 |
See accompanying notes to unaudited condensed consolidated financial statements.
6
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
For the nine months ended June 30, 2022 and 2021:
(Amounts in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Additional | | | | | other | | Total | |||
| | | | | | | Paid-in | | Retained | | comprehensive | | Shareholders’ | ||||
Nine months ended June 30, 2022: |
| Shares |
| Amount |
| Capital |
| Earnings |
| loss |
| Equity | |||||
Balance as of September 30, 2021 |
| i 4,394 | | $ | i 45 | | $ | i 18,258 | | $ | i 25,191 | | $ | ( i 9,448) | | $ | i 34,046 |
Net income |
| — | |
| — | |
| — | |
| i 474 | |
| — | |
| i 474 |
Other comprehensive loss |
| — | | | — | | | — | | | — | |
| ( i 710) | |
| ( i 710) |
Stock-based compensation |
| — | | | — | | | i 726 | | | — | |
| — | |
| i 726 |
Restricted stock cancellation | | ( i 1) | | | ( i 1) | | | — | | | — | | | — | | | ( i 1) |
Restricted stock issuance |
| i 151 | | | i 2 | | | — | | | — | |
| — | |
| i 2 |
Issuance of shares under employee stock purchase plan |
| i 11 | | | — | | | i 90 | | | — | |
| — | |
| i 90 |
Purchase of common stock | | ( i 19) | | | — | | | — | | | ( i 151) | | | — | | | ( i 151) |
Balance as of June 30, 2022 |
| i 4,536 | | $ | i 46 | | $ | i 19,074 | | $ | i 25,514 | | $ | ( i 10,158) | | $ | i 34,476 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Additional | | | | | other | | Total | |||
| | | | | | | Paid-in | | Retained | | comprehensive | | Shareholders’ | ||||
Nine months ended June 30, 2021: |
| Shares |
| Amount |
| Capital |
| Earnings |
| loss |
| Equity | |||||
Balance as of September 30, 2020 |
| i 4,276 | | $ | i 43 | | $ | i 16,994 | | $ | i 24,492 | | $ | ( i 11,995) | | $ | i 29,534 |
Net loss |
| — | |
| — | |
| — | |
| ( i 119) | |
| — | |
| ( i 119) |
Other comprehensive income |
| — | | | — | | | — | | | — | | | i 383 | |
| i 383 |
Stock-based compensation |
| — | | | — | | | i 748 | | | — | | | — | |
| i 748 |
Restricted stock cancellation | | ( i 17) | | | | | | — | | | — | | | — | | | — |
Restricted stock issuance |
| i 103 | | | i 1 | | | — | | | — | | | — | |
| i 1 |
Issuance of shares under employee stock purchase plan |
| i 15 | | | — | | | i 106 | | | — | | | — | |
| i 106 |
Balance as of June 30, 2021 |
| i 4,377 | | $ | i 44 | | $ | i 17,848 | | $ | i 24,373 | | $ | ( i 11,612) | | $ | i 30,653 |
See accompanying notes to unaudited condensed consolidated financial statements.
7
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
| | | | | | |
| | Nine months ended | ||||
| | June 30, | | |||
|
| 2022 |
| 2021 | ||
Operating activities |
| |
|
| |
|
Net income (loss) | | $ | i 474 | | $ | ( i 119) |
| | | | | | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |
|
| |
|
|
Depreciation | |
| i 250 | |
| i 286 |
Amortization of intangibles | |
| i 9 | |
| i 7 |
Loss on sale of fixed assets, net | | | i 15 | | | i 1 |
Foreign exchange (gain) loss | |
| ( i 777) | |
| i 731 |
Provision for losses on accounts receivable | |
| ( i 27) | |
| i 51 |
Provision for obsolete inventory | |
| i 17 | |
| i 29 |
Amortization of lease right-of-use assets | | | i 478 | | | i 483 |
Stock-based compensation expense on stock options and restricted stock awards | |
| i 726 | |
| i 748 |
Deferred income taxes | |
| i — | |
| i 1,149 |
Increase in cash surrender value of life insurance | |
| ( i 1,189) | |
| ( i 143) |
| | | | | | |
Adjustment for financing activities recognized in net income - Gain on forgiveness of debt | | | i — | | | ( i 2,196) |
| | | | | | |
Changes in operating assets and liabilities: | |
|
| |
|
|
(Decrease) increase in accounts receivable | |
| i 50 | |
| ( i 2,974) |
(Increase) decrease in inventories | |
| ( i 1,643) | |
| i 82 |
Decrease (increase) in refundable income taxes | |
| i 530 | |
| ( i 338) |
(Increase) decrease in operating lease right-of-use assets | | | ( i 63) | | | i 9 |
Increase in other assets | | | ( i 860) | | | ( i 825) |
Decrease in investment in lease | |
| i 50 | |
| i 318 |
Decrease (increase) in long-term receivable | | | i 2,178 | | | ( i 4,475) |
(Decrease) increase in accounts payable and accrued expenses | |
| ( i 322) | |
| i 3,843 |
(Decrease) increase in interest payable | | | ( i 71) | | | i 82 |
Decrease in operating lease liabilities | | | ( i 420) | | | ( i 352) |
Increase in deferred revenue | |
| i 2,775 | |
| i 499 |
Decrease in pension and retirement plans liabilities | |
| ( i 226) | |
| ( i 402) |
Decrease in income taxes payable | |
| i — | |
| ( i 62) |
(Decrease) increase in other long-term liabilities | |
| ( i 1,734) | |
| i 4,445 |
Net cash provided by operating activities | |
| i 220 | |
| i 877 |
| | | | | | |
Investing activities | |
|
| |
|
|
Life insurance premiums paid | |
| ( i 70) | |
| ( i 70) |
Proceeds from corporate life insurance owned policy | | | i 322 | | | |
Proceeds from sales of property, equipment, and improvements | | | i 2 | | | i 1 |
Purchases of property, equipment and improvements | |
| ( i 223) | |
| ( i 84) |
Net cash provided by (used in) investing activities | |
| i 31 | |
| ( i 153) |
| | | | | | |
Financing activities | |
|
| |
|
|
Net payments under line-of-credit agreement | | | i 2,058 | | | i 82 |
Repayments on debt | | | ( i 647) | | | ( i 248) |
Principal payments on finance leases | |
| ( i 35) | |
| ( i 262) |
Purchase of common stock | | | ( i 151) | | | i — |
Proceeds from issuance of shares under equity compensation plans | |
| i 90 | |
| i 106 |
Net cash provided by (used in) financing activities | |
| i 1,315 | |
| ( i 322) |
Effects of exchange rate on cash | |
| ( i 158) | |
| ( i 13) |
Net increase in cash and cash equivalents | |
| i 1,408 | |
| i 389 |
Cash and cash equivalents beginning of period | | | i 20,007 | |
| i 19,264 |
Cash and cash equivalents end of period | | $ | i 21,415 | | $ | i 19,653 |
| | | | | | |
Supplementary cash flow information: | |
|
| |
|
|
Cash (received) paid for income taxes | | $ | ( i 233) | | $ | i 114 |
Cash paid for interest | | $ | i 184 | | $ | i 189 |
| | | | | | |
Supplementary non-cash financing activities: | | | | | | |
Gain on forgiveness of debt | | $ | i — | | $ | i 2,196 |
Obtaining a right-of-use asset in exchange for a lease liability | | $ | i 23 | | $ | i — |
Customer financing for inventory sold (see Note 6 Accounts and Long-Term Receivable for details) | | $ | i 1,232 | | $ | i 14,200 |
See accompanying notes to unaudited condensed consolidated financial statements.
8
CSP INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2022
iOrganization and Business
CSP Inc. ("CSPi" or "CSPI" or "the Company" or "we" or "our") was incorporated in 1968 and is based in Lowell, Massachusetts. CSPi and its subsidiaries develop and market IT integration solutions, advanced security products, managed IT services, purpose built network adapters, and high-performance cluster computer systems to meet the diverse requirements of its commercial and defense customers worldwide. The Company operates in i two segments, its Technology Solutions (“TS”) segment and High Performance Products (“HPP”) segment.
1. Basis of Presentation
The accompanying interim condensed consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in the annual consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States, have been omitted.
Accordingly, the Company believes that although the disclosures are adequate to make the information presented not misleading, the unaudited condensed consolidated financial statements should be read in conjunction with the notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
/
i2. Use of Estimates
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates and assumptions are related to reserves for bad debt, reserves for inventory obsolescence, the impairment assessment of intangible assets, right-of-use assets and lease liabilities, and the calculation of standalone selling price for revenue recognition, the calculation of liabilities related to deferred compensation and retirement plans and the calculation of income tax liabilities. Actual results may differ from those estimates under different assumptions or conditions.
i3. Recent Accounting Pronouncements
New accounting standards not adopted as of June 30, 2022
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), an amendment of the FASB Accounting Standards Codification. This ASU will change how entities account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. Additionally, there will be a significant increase in the amount of disclosures by year of origination for certain financing receivables. For public entities classified as a smaller reporting company, the new standard is effective for annual periods beginning after December 15, 2022 (ASU 2019-10 Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates), including interim periods within that annual period. The Company is evaluating the effect that ASU 2016-13 will have on its consolidated financial statements and related disclosures.
i4. Revenue
We derive revenue from the sale of integrated hardware and software, third-party service contracts, professional services, managed services, financing of hardware and software, and other services.
We recognize revenue from hardware upon transfer of control, which is at a point in time typically upon shipment when title transfers. Revenue from software is recognized at a point in time when the license is granted.
9
Professional services generally include implementation, installation, and training services. Professional services are considered a series of distinct services that form one performance obligation and revenue is recognized over time as services are performed.
Revenue generated from managed services is recognized over the term of the contract. Certain managed services contracts include financing of hardware and software. Revenues from arrangements which include financing are allocated considering relative standalone selling prices of lease and non-lease components within the agreement. The lease component includes hardware, which is subject to ASC 842, Leases. The non-lease components are subject to ASC 606, Revenue from Contracts with Customers.
Other services generally include revenue generated through our royalty, extended warranty, multicomputer repair, and maintenance contracts. Royalty revenue is sales-based and recognized on date of subsequent sale of the product, which occurs on the date of customer shipment. Revenue from extended warranty contracts is recognized ratably over the warranty period. Multicomputer repair services revenue is recognized upon control transfer when the customer takes possession of the computer at time of shipping. Revenue generated from maintenance services is recognized evenly over the term of the contract.
The right of return risk lies with the original manufacturer of the product. Managed service contracts contain the right to refund if canceled within i 30 days of inception. Any products with a standard warranty are treated as a warranty obligation under ASC 460, Guarantees.
The following policies are applicable to our major categories of segment revenue transactions:
TS Segment Revenue
TS Segment revenue is derived from the sale of hardware, software, professional services, third-party service contracts, maintenance contracts, managed services, and financing of hardware and software. Financing revenue pertaining to the portion of an arrangement containing a lease is recognized in accordance with ASC 842. Financing revenue related to the lease is recorded in revenue as equipment leasing is part of our operations.
Third-party service contracts are evaluated to determine whether such service revenue should be recorded as gross or net sales and whether over time or at point in time.
HPP Segment Revenue
HPP segment revenue is derived from the sale of integrated hardware and software, maintenance, and other services through the Multicomputer, Myricom, and ARIA product lines.
Myricom revenue is derived from the sale of products, which are comprised of both hardware and embedded software which is essential to the products’ functionality, and post contract maintenance and support. Post contract maintenance and support is considered immaterial in the context of the contract and therefore is not a separate performance obligation. Multicomputer revenue is derived from the sale of hardware, software, extended warranties, royalties, and repair services.
10
See disaggregated revenues below by products/services and geography.
| | | | | | | | | | | | | | | |
| | | | Technology Solutions Segment | | | |||||||||
| | High | | | | | | | | | | | | | |
| | Performance | | | | | | | | | | | | | |
| | Products | | United | | | | | | | | Consolidated | |||
Three months ended June 30, |
| Segment |
| Kingdom |
| U.S. |
| Total |
| Total | |||||
| | (Amounts in thousands) | |||||||||||||
2022 | | | | | | | | | | | |||||
Sales: | | | | | | | | | | | |||||
Product | | $ | i 427 | | $ | i 128 | | $ | i 7,883 | | $ | i 8,011 | | $ | i 8,438 |
Service | | | i 311 | | | i 83 | | | i 4,494 | | | i 4,577 | | | i 4,888 |
Finance * | | | i — | | | i — | | | i — | | | i — | | | i — |
Total sales | | $ | i 738 | | $ | i 211 | | $ | i 12,377 | | $ | i 12,588 | | $ | i 13,326 |
| | | | | | | | | | | | | | | |
| | | | Technology Solutions Segment | | | |||||||||
| | High | | | | | | | | | | | |||
| | Performance | | | | | | | | | | | | | |
| | Products | | United | | | | | | | | Consolidated | |||
Three months ended June 30, |
| Segment |
| Kingdom |
| U.S. |
| Total |
| Total | |||||
| | (Amounts in thousands) | |||||||||||||
2021 | | | | | | | | | | | |||||
Sales: | | | | | | | | | | | |||||
Product | | $ | i 602 | | $ | i 130 | | $ | i 9,408 | | $ | i 9,538 | | $ | i 10,140 |
Service | | | i 356 | | | i 83 | | | i 3,140 | | | i 3,223 | | | i 3,579 |
Finance * | | | i — | | | i — | | | i 2 | | | i 2 | | | i 2 |
Total sales | | $ | i 958 | | $ | i 213 | | $ | i 12,550 | | $ | i 12,763 | | $ | i 13,721 |
| | | | | | | | | | | | | | | |
| | | | Technology Solutions Segment | | | |||||||||
| | High | | | | | | | | | | | | | |
| | Performance | | | | | | | | | | | | | |
| | Products | | United | | | | | | | | Consolidated | |||
Nine months ended June 30, |
| Segment |
| Kingdom |
| U.S. |
| Total |
| Total | |||||
| | (Amounts in thousands) | |||||||||||||
2022 | | | | | | | | | | | |||||
Sales: | | | | | | | | | | | |||||
Product | | $ | i 2,109 | | $ | i 402 | | $ | i 22,863 | | $ | i 23,265 | | $ | i 25,374 |
Service | | | i 836 | | | i 280 | | | i 11,185 | | | i 11,465 | | | i 12,301 |
Finance * | | | i — | | | i — | | | i 1 | | | i 1 | | | i 1 |
Total sales | | $ | i 2,945 | | $ | i 682 | | $ | i 34,049 | | $ | i 34,731 | | $ | i 37,676 |
| | | | | | | | | | | | | | | |
| | | | Technology Solutions Segment | | | |||||||||
| | High | | | | | | | | | | | |||
| | Performance | | | | | | | | | | | | | |
| | Products | | United | | | | | | | | Consolidated | |||
Nine months ended June 30, |
| Segment |
| Kingdom |
| U.S. |
| Total |
| Total | |||||
| | (Amounts in thousands) | |||||||||||||
2021 | | | | | | | | | | | |||||
Sales: | | | | | | | | | | | |||||
Product | | $ | i 2,494 | | $ | i 1,774 | | $ | i 25,238 | | $ | i 27,012 | | $ | i 29,506 |
Service | | | i 908 | | | i 260 | | | i 8,503 | | | i 8,763 | | | i 9,671 |
Finance * | | | i — | | | i — | | | i 20 | | | i 20 | | | i 20 |
Total sales | | $ | i 3,402 | | $ | i 2,034 | | $ | i 33,761 | | $ | i 35,795 | | $ | i 39,197 |
* Finance revenue is related to equipment leasing and is not subject to the guidance on revenue from contracts with customers (ASC 606).
/Significant Judgments
The input method using labor hours expended relative to the total expected hours is used to recognize revenue for professional services. Only the hours that depict our performance toward satisfying a performance obligation are used to
11
measure progress. An estimate of hours for each professional service agreement is made at the beginning of each contract based on prior experience and monitored throughout the performance of the services. This method is most appropriate as it depicts the measure of progress towards satisfaction of the performance obligation.
A financing component exists when at contract inception the period between the transfer of a promised good and/or service to the customer differs from when the customer pays for the good and/or service. As a practical expedient, we have elected not to adjust the amount of consideration for effects of a significant financing component when it is anticipated the promised good or service will be transferred and the subsequent payment will be one year or less.
Certain contracts contain a financing component including managed services contracts with financing of hardware and software. The interest rate used reflects the approximate interest rate consistent with a separate financing transaction with the customer at the inception of the agreement. Revenues from arrangements which include financing are allocated considering relative standalone selling prices of lease and non-lease components within the agreement. The lease component includes hardware, which is subject to ASC 842, Leases. The non-lease components are subject to ASC 606, Revenue from Contracts with Customers.
When product and non-managed services are sold together, the allocation of the transaction price to each performance obligation is calculated based on the estimated relative selling price or a budgeted cost-plus margin approach, as appropriate. Due to the complex nature of these contracts, there is significant judgment in allocating the transaction price. These estimates are periodically reviewed by project managers, engineers, and other staff involved to ensure estimates remain appropriate. For items sold separately, including hardware, software, professional services, maintenance contracts, other services, and third-party service contracts, there is no allocation as there is one performance obligation.
We recognize revenue from third-party service contracts as either gross sales or net sales depending on whether we are acting as a principal party to the transaction or simply acting as an agent or broker based on control and timing. We are a principal if we control the good or service before that good or service is transferred to the customer. We record revenue as gross when we are a principal party to the arrangement and net of cost when we are acting as a broker or agent for a third party. Under gross sales recognition, the entire selling price is recorded in revenue and our cost to the third-party service provider or vendor is recorded in cost of sales. Under net sales recognition, the cost to the third-party service provider or vendor is recorded as a reduction to revenue resulting in net sales equal to the gross profit on the transaction. Third-party service contracts are sold in different combinations with hardware, software, and services. When we are an agent, revenue is typically recorded at a point in time. When we are the principal, revenue is recognized over the contract term. We have concluded we are the agent in sales of third-party maintenance, software or hardware support, and certain security software that is sold with integral third-party delivered software maintenance that includes critical updates.
Contract Assets and Liabilities
When we have performed work but do not have an unconditional right to payment, a contract asset is recorded. When we have the right to bill a customer, accounts receivable is recorded as an unconditional right exists. Current contract assets were $ i 1.5 million and $ i 2.7 million as of June 30, 2022 and September 30, 2021, respectively. The current portion is recorded in other current assets on the condensed consolidated balance sheets. There were i i no / noncurrent contract assets as of June 30, 2022 and September 30, 2021. The difference in the balances is due to regular timing differences between when work is performed and having an unconditional right to payment.
Contract liabilities arise when payment is received before we transfer a good or service to the customer. Current contract liabilities were $ i 4.7 million and $ i 1.9 million as of June 30, 2022 and September 30, 2021, respectively. The current portion of contract liabilities is recorded in deferred revenue on the condensed consolidated balance sheets. The long-term portion of contract liabilities were $ i 0.1 million and $ i 0.4 million as of June 30, 2022 and September 30, 2021, respectively. These noncurrent liabilities are recorded in other noncurrent liabilities on the condensed consolidated balance sheets. Revenue recognized for the nine months ended June 30, 2022 that was included in contract liabilities as of September 30, 2021 was $ i 0.9 million.
Contract Costs
i Incremental costs of obtaining a contract involving customer transactions where the revenue and the related transfer of goods and services are equal to or less than a one year period, are expensed as incurred, utilizing the practical expedient in ASC 340-40-25-4. For a period greater than one year, incremental contract costs are capitalized if we expect
12
to recover these costs. The costs are amortized over the contract term and expected renewal periods. The period of amortization is generally three to i six years. Incremental costs are related to commissions in the TS portion of the business. Current capitalized contract costs are within the other current assets on the condensed consolidated balance sheets as of June 30, 2022 and September 30, 2021. The portion of current capitalized costs were $ i 112 thousand and $ i 137 thousand as of June 30, 2022 and September 30, 2021, respectively. There are i i no / noncurrent capitalized costs on the condensed consolidated balance sheets as these commissions are paid annually even when the contract extends beyond a one year period. The amount of incremental costs amortized for the three months ended June 30, 2022 and 2021 were $ i 91 thousand and $ i 89 thousand, respectively. The amount of incremental costs amortized for the nine months ended June 30, 2022 and 2021 were $ i 272 thousand and $ i 260 thousand, respectively. This is recorded in selling, general, and administrative expenses. There was i no impairment related to incremental costs capitalized during the nine months ended June 30, 2022 and 2021.
Costs to fulfill a contract are capitalized when the costs are related to a contract or anticipated contract, generate or enhance resources that will be used in satisfying performance obligations in the future, and costs are recoverable. Costs to fulfill a contract are related to the TS portion of the business and involve activities performed before managed services can be completed. Current capitalized fulfillment costs are in the other current assets and noncurrent costs are in other assets on the condensed consolidated balance sheets. The portion of current capitalized costs were $ i 13 thousand as of June 30, 2022 and $ i 13 thousand as of September 30, 2021. The portion of noncurrent capitalized costs were $ i 0 thousand and $ i 9 thousand as of June 30, 2022 and September 30, 2021, respectively. The amount of fulfillment costs amortized for the three months ended June 30, 2022 and 2021 were $ i 3 thousand and $ i 3 thousand, respectively. The amount of fulfillment costs amortized for the nine months ended June 30, 2022 and 2021 were $ i 9 thousand and $ i 9 thousand, respectively. These costs amortized were recorded in cost of sales. These costs amortized were recorded in cost of sales. There was i i no / impairment related to fulfillment costs capitalized for the nine months ended June 30, 2022 and 2021.
Other
Projects are typically billed upon completion or at certain milestones. Product and services are typically billed when shipped or as services are being performed. Payment terms are typically i 30 days to pay in full except in Europe where it could be up to i 90 days. Most of our contracts are less than one year. There are certain contracts that contain a financing component. See Note 6 to the condensed consolidated financial statements for additional information. We elected to use the i optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that have an original expected duration of one year or less. This is due to a low amount of performance obligations, which are less than one year from being unsatisfied at each period end. Most of these contracts are related to product sales.
We have certain contracts that have an original term of more than one year. The royalty agreement is longer than one year, but not included in the table below as the royalties are sales-based. Managed service contracts are generally longer than one year. For these contracts the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2022 is set forth in the table below:
i
| | | |
|
| (Amounts in thousands) | |
Fiscal 2022 | | $ | i 261 |
Fiscal 2023 | | | i 662 |
Fiscal 2024 | | | i 31 |
| | $ | i 954 |
i5. Earnings Per Share of Common Stock
Basic net income (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per common share reflects the maximum dilution that would have resulted from the assumed exercise and share repurchase related to dilutive stock options and is computed by dividing net income (loss) by the assumed weighted average number of common shares outstanding.
We are required to present earnings per share (“EPS”), utilizing the two class method because we had outstanding, non-vested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, which are considered participating securities.
13
Basic and diluted earnings per share computations for the Company’s reported net loss attributable to common stockholders are as follows:
| | | | | | | | | | | | | |
| | Three months ended | | Nine months ended | | ||||||||
| | June 30, | | June 30, | | June 30, | | | |||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 | | ||||
| | (Amounts in thousands except per share data) | | ||||||||||
Net income (loss) |
| $ | i 684 |
| $ | ( i 423) |
| $ | i 474 |
| $ | ( i 119) |
|
Less: net income attributable to nonvested common stock |
| | i 38 |
| | i — |
| | i 24 |
| | i — |
|
Net income (loss) attributable to common shareholders | | $ | i 646 |
| $ | ( i 423) | | $ | i 450 |
| $ | ( i 119) | |
| | | | | | | | | | | | | |
Weighted average total shares outstanding – basic | |
| i 4,535 |
|
| i 4,179 | |
| i 4,481 |
|
| i 4,137 | |
Less: weighted average non–vested shares outstanding | |
| i 255 |
|
| i — | |
| i 230 |
|
| i — | |
Weighted average number of common shares outstanding – basic | |
| i 4,280 |
|
| i 4,179 | |
| i 4,251 |
|
| i 4,137 | |
Add: potential common shares from non–vested stock awards and the assumed exercise of stock options | |
| i 3 |
|
| i — | |
| i 14 |
|
| i — | |
Weighted average common shares outstanding – diluted | |
| i 4,283 |
|
| i 4,179 | |
| i 4,265 |
|
| i 4,137 | |
| | | | | | | | | | | | | |
Net income (loss) per common share - basic | | $ | i 0.15 | | $ | ( i 0.10) | | $ | i 0.11 | | $ | ( i 0.03) | |
Net income (loss) per common share - diluted | | $ | i 0.15 | | $ | ( i 0.10) | | $ | i 0.11 | | $ | ( i 0.03) | |
All anti-dilutive securities, including certain stock options, are excluded from the diluted income (loss) per share computation. There are i no outstanding stock options as of June 30, 2022 as they expired in the second quarter of fiscal year 2022. Non-vested restricted stock awards of i 208 thousand and i 209 thousand were excluded from the diluted loss per share calculation for the three and nine months ended June 30, 2021, respectively. These awards were excluded because there was a net loss for this period and their inclusion would have been anti-dilutive.
i6. Accounts and Long-Term Receivable
Within Accounts receivable and Long-term receivable there are amounts due reflecting sales whose payment terms exceed i one year. This financing is separate from agreements with a leasing component, see Note 8, “Leases” for financing through leases. These receivables are included in Accounts receivable and Long-term receivable in the amount of $ i 4.9 million and $ i 5.3 million as of June 30, 2022. These receivables are included in Accounts receivable and Long-term receivable in the amount of $ i 6.5 million and $ i 7.5 million as of September 30, 2021, respectively.
The receivables with a payment term exceeding one year carry an average weighted interest rate of i 4.9%, which reflects the approximate interest rate consistent with a separate financing transaction with the customer at the inception of the agreement.
There is not an allowance for credit losses nor impairments for Accounts and Long-term receivables with a contractual maturity of over one year. All accounts have i i no / past amounts due as of June 30, 2022 or September 30, 2021. There was i i no / activity in the allowance for credit losses of these receivables for the nine months ended June 30, 2022 and 2021, respectively. All these agreements are looked at as one portfolio in determining credit losses. There are various factors that are considered in extending a customer payment terms longer than one year including payment history, economic conditions, and capacity to pay. The credit quality of customers is monitored by payment activity. The unearned income represents a rate similar to market at the inception of the agreement.
There was i one new agreement effective in the first quarter of fiscal year 2022 causing an increase in Accounts and Long-term receivable. This agreement included approximately $ i 0.5 million of payments to be received over the next i 2 years from the effective date of the agreement. The net revenue from this transaction was approximately $ i 0.1 million during the first quarter of fiscal year 2022.
There was i one new agreement effective in the third quarter of fiscal year 2022 causing an increase in Accounts and Long-term receivable. This agreement included approximately $ i 0.8 million of payments to be received over the next
/14
i 3 years from the effective date of the agreement. The net revenue from this transaction was approximately $ i 0.3 million during the third quarter of fiscal year 2022.
The amount of interest income earned from sales whose payment terms exceed one year for the three months ended June 30, 2022 and 2021 was $ i 108 thousand and $ i 169 thousand, respectively. The amount of interest income earned from sales whose payment terms exceed one year for the nine months ended June 30, 2022 and 2021 was $ i 369 thousand and $ i 387 thousand, respectively. Interest income from these agreements is recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.
Receivables whose payment terms exceed one year are placed on non-accrual status, meaning interest income stops being recorded, when the customer has a past due amount in excess of 30 days or reasonable doubt exists in collecting all interest and principal. A payment due in excess of 30 days is considered delinquent. If a payment is received for a receivable on non-accrual status the payment is first applied to interest and then principal. Recording interest income resumes once no reasonable doubt exists regarding collecting all interest and principal.
iContractual maturities of outstanding financing with an original contractual maturity over one year are as follows:
| | | |
Fiscal year ending September 30: |
| (Amounts in thousands) | |
2022 | | $ | i 2,182 |
2023 | | | i 5,108 |
2024 | | | i 1,839 |
2025 | | | i 1,560 |
Total payments | | | i 10,689 |
Less: unearned interest income | | | ( i 454) |
Total, net of unearned interest income | | $ | i 10,235 |
i7. Inventories
iInventories consist of the following:
| | | | | | |
| | June 30, | | |||
|
| 2022 |
| 2021 | ||
| | (Amounts in thousands) | ||||
Raw materials | | $ | i 563 | | $ | i 736 |
Work-in-process | |
| i 7 | | | i 289 |
Finished goods | |
| i 5,037 | | | i 2,964 |
Total | | $ | i 5,607 | | $ | i 3,989 |
We evaluate inventory for obsolescence on at least a quarterly basis or more frequently if needed. Our HPP segment has a multi-faceted approach in determining obsolescence including reviewing inventory by product line, program, and individual part. In the TS segment, we seek to minimize obsolete inventory by having nearly all of our inventory purchased in conjunction with a sales agreement. From time to time, we do purchase certain inventory in bulk to receive discounts, but only when we anticipate selling this inventory. The inventory we purchase at the TS segment is in high demand, especially in the current environment, and has a limited risk of obsolescence.
/15
8. Leases
Information related to both lessee and lessor
The components of lease costs for the three months ended June 30, 2022 and 2021 are as follows:
i
| | | | | | | |
| | | Three months ended | ||||
| Condensed Consolidated Statements of Operations Location | |
| ||||
| | | (Amounts in thousands) | ||||
Finance Lease: | | | | | | | |
Interest on lease liabilities | Interest expense | | $ | i 1 | | $ | i 2 |
Operating Lease: | | |
| | |
| |
Operating lease cost | Selling, general, and administrative | |
| i 130 | |
| i 170 |
Short-term lease cost | Selling, general, and administrative | | | i 62 | | | i 23 |
Total lease costs | | | $ | i 193 | | $ | i 195 |
Less sublease interest income | Revenue | | | i — | | | ( i 2) |
Total lease costs, net of sublease interest income | | | $ | i 193 | | $ | i 193 |
The components of lease costs for the nine months ended June 30, 2022 and 2021 are as follows:
| | | | | | | |
| | | Nine months ended | ||||
| Condensed Consolidated Statements of Operations Location | | | ||||
| | | (Amounts in thousands) | ||||
Finance Lease: | | | | | | | |
Interest on lease liabilities | Interest expense | | $ | i 3 | | $ | i 10 |
Operating Lease: | | |
| | |
| |
Operating lease cost | Selling, general, and administrative | |
| i 472 | |
| i 538 |
Short-term lease cost | Selling, general, and administrative | | | i 93 | | | i 36 |
Total lease costs | | | $ | i 568 | | $ | i 584 |
Less sublease interest income | Revenue | | | ( i 1) | | | ( i 20) |
Total lease costs, net of sublease interest income | | | $ | i 567 | | $ | i 564 |
Supplemental cash flow information related to leases for three months ended June 30, 2022 and 2021 is below:
i
| | | | |
| Three months ended | |||
| ||||
| (Amounts in thousands) | |||
Cash paid for amounts included in the measurement of lease liabilities: | | | | |
Operating cash flows from operating leases | $ | i 131 | $ | i 177 |
Operating cash flows from short-term leases | | i 62 | | i 23 |
Operating cash flows from finance leases | | i 1 | | i 2 |
Financing cash flows from finance leases | | i 12 | | i 89 |
Lease assets obtained in exchange for new lease liabilities | | | | |
Operating leases | | i 23 | | i — |
Cash received from subleases | | i 17 | | i 113 |
/16
Supplemental cash flow information related to leases for nine months ended June 30, 2022 and 2021 is below:
| | | | |
| Nine months ended | |||
| ||||
| (Amounts in thousands) | |||
Cash paid for amounts included in the measurement of lease liabilities: | | | | |
Operating cash flows from operating leases | $ | i 486 | $ | i 553 |
Operating cash flows from short-term leases | | i 93 | | i 36 |
Operating cash flows from finance leases | | i 3 | | i 10 |
Financing cash flows from finance leases | | i 35 | | i 262 |
Lease assets obtained in exchange for new lease liabilities | | | | |
Operating leases | | i 23 | | i — |
Cash received from subleases | | i 51 | | i 338 |
i9. Accounts payable and other noncurrent liabilities
The Company enters into certain multi-year agreements with vendors when also entering into some of the multi-year contracts the Company enters into with customers. See Note 6, “Accounts and Long-Term Receivable” for further information related to the multi-year agreements with customers.
There was not an interest rate stated in the agreements and therefore interest was imputed under ASC 835 Interest as the payments in the exchange represented two elements: principal and interest. The imputed interest rate for the agreements was determined to be i 5.0%. The rate was determined primarily based on the rate the Company could obtain by financing from other sources at the date of the transaction.
Interest expense related to these agreements for the three months ended June 30, 2022 and 2021 was $ i 57 thousand and $ i 92 thousand, respectively. Interest expense related to these agreements for the nine months ended June 30, 2022 and 2021 was $ i 203 thousand and $ i 121 thousand, respectively.
The amounts owed for these agreements are in Accounts payable and Other noncurrent liabilities because they are owed to vendors rather than banks or financial institutions for borrowings. See Note 10, “Notes Payable and Line of Credit” for amounts due to banks and other financial institutions for borrowings.
Below are details of the agreements with the vendors that contain imputed interest:
i
| | | | | |
| | ||||
| (Amounts in thousands) | ||||
Current | $ | i 1,758 | | $ | i 1,468 |
Less: discount | | i 203 | | | i 246 |
Accounts payable and accrued expenses | $ | i 1,555 | | $ | i 1,222 |
| | | | | |
Noncurrent | $ | i 3,226 | | $ | i 4,403 |
Less: discount | | i 177 | | | i 353 |
Other noncurrent liabilities | $ | i 3,049 | | $ | i 4,050 |
The Company had a total of approximately $ i 6.5 million due to one of these vendors as of June 30, 2022. This is approximately i 38% of Accounts payable and other noncurrent liabilities. The TS segment has many vendors it transacts with and does not have any specific agreement with this vendor that it must purchase certain products from the vendor. Management believes other suppliers could provide similar products on comparable terms.
/ i10. Notes Payable and Line of Credit
In September 2019, the Company borrowed $ i 1.0 million with a i 5.0% rate of interest related to a multi-year agreement with a customer. See Note 6 for the disclosure related to the receivables.
/17
In October 2019, the Company borrowed $ i 2.0 million with a i 5.1% rate of interest related to a multi-year agreement with a customer.
On April 17, 2020, CSP, Inc. and Modcomp, Inc., its wholly owned subsidiary (collectively, the “Borrowers”) each received a loan in the form of a promissory note from Paragon Bank (“Lender”) in the amounts of $ i 827,000 and $ i 1,353,600, respectively (the “SBA Loans”) under the Paycheck Protection Program (“PPP”), which was established under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The SBA Loans have a i two-year term and carry an annual fixed interest rate of i 1%.
The SBA Loans provided for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, materially false or misleading representations to Lender or SBA, and adverse changes in the financial condition or business operations that Lender believed could materially affect Borrowers’ ability to pay the SBA Loans. The Borrowers did not provide any collateral or guarantees for the SBA Loans and the Borrowers could prepay the principal of the SBA Loans at any time without penalty.
The Borrowers applied to the Lender for forgiveness of an amount due on the SBA Loans in an amount equal to the sum of certain costs during the 24 week period beginning on the date of the first disbursement of the SBA Loans. The amount of SBA Loans forgiveness was calculated in accordance with the requirements of the PPP, including provisions of Section 1106 of the CARES Act. We used the SBA Loans proceeds in accordance with the applicable SBA guidelines. In November 2020, the SBA Loans were formally forgiven. The $ i 2.2 million gain is presented on the Condensed Consolidated Statement of Operations as Gain on forgiveness of debt for the nine months ended June 30, 2021.
Interest expense related to the notes for the three months ended June 30, 2022 and 2021 was $ i 12 thousand and $ i 21 thousand, respectively. Interest expense related to the notes for the nine months ended June 30, 2022 and 2021 was $ i 39 thousand and $ i 67 thousand, respectively.
i
| | | | | |
| | ||||
| (Amounts in thousands) | ||||
Current | $ | i 538 | | $ | i 808 |
Less: notes discount | | i 27 | |
| i 51 |
Notes payable - current portion | $ | i 511 | | $ | i 757 |
| | | | | |
Noncurrent | $ | i 449 | | $ | i 897 |
Less: notes discount | | i 6 | |
| i 21 |
Notes payable - noncurrent portion | $ | i 443 | | $ | i 876 |
As of June 30, 2022 and September 30, 2021, the Company maintained an inventory line of credit with a borrowing capacity of $ i i i i 15.0 / / / million. It may be used by the TS and HPP segments in the U.S. to purchase inventory from approved vendors with payment terms which exceed those offered by the vendors. i No interest accrues under the inventory line of credit when advances are paid within terms, however, late payments are subject to an interest charge of Prime plus i 5%. The credit agreement for the inventory line of credit contains financial covenants which require the Company to maintain the following TS segment-specific financial ratios: (1) a minimum current ratio of i 1.2, (2) tangible net worth of no less than $ i 4.0 million, and (3) a maximum ratio of total liabilities to total net worth of less than i 5.0:1. As of June 30, 2022 and September 30, 2021, Company borrowings, all from the TS segment, under the inventory line of credit were $ i 3.0 million and $ i 0.9 million, respectively, and the Company was in compliance with all financial covenants. As of June 30, 2022 and September 30, 2021, this line of credit also includes availability of a limited cash withdrawal of up to $ i i 1.0 / million. As of June 30, 2022 and September 30, 2021 there were i i no / cash withdrawals outstanding.
i11. Pension and Retirement Plans
The Company’s operations have defined benefit and defined contribution plans in the U.K. and in the U.S. In the U.K., the Company provides defined benefit pension plans and defined contribution plans for some of its employees. In the U.S., the Company provides benefits through supplemental retirement plans to certain former employees. The U.S. supplemental retirement plans have life insurance policies which are not plan assets but were purchased by the Company as a vehicle to fund the costs of the plan. A gain on a life insurance policy of $ i 0.1 million occurred during the second quarter of fiscal year 2022. The gain on this life insurance policy was not related to a current employee at time of expiration. The Company received $ i 322 thousand from the life insurance policy during Q3 of fiscal year 2022. Additionally, during
/18
the fiscal third quarter management made the decision to pay back approximately $ i 0.9 million of insurance policy loans. The Company also provides for officer death benefits through post-retirement plans to certain current officers of the Company in the U.S. All the Company’s defined benefit plans are closed to newly hired employees and have been since September 2009.
The Company funds its pension plans in amounts sufficient to meet the requirements set forth in applicable employee benefits laws and local tax laws. Liabilities for amounts in excess of these funding levels are accrued and reported in the condensed consolidated balance sheets.
The Company’s pension plan in the U.K. is the only plan with plan assets. The plan assets consist of an investment in a commingled fund which in turn comprises a diversified mix of assets including corporate equity securities, government securities and corporate debt securities.
iThe components of net periodic benefit costs related to the U.S. and U.K. plans are as follows:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | ||||||||||||||||
| | 2022 | | 2021 | ||||||||||||||
|
| U.K. |
| U.S. |
| Total |
| U.K. |
| U.S. |
| Total | ||||||
| | (Amounts in thousands) | ||||||||||||||||
Pension: | | | | | | | | | | | | | | | | | | |
Interest cost | | $ | i 68 | | $ | i 2 | | $ | i 70 | | $ | i 63 | | $ | i 3 | | $ | i 66 |
Expected return on plan assets | |
| ( i 118) | |
| i — | |
| ( i 118) | |
| ( i 103) | |
| i — | |
| ( i 103) |
Amortization of past service costs | | | i 2 | | | i — | | | i 2 | | | i 2 | | | i — | | | i 2 |
Amortization of net loss | |
| i 24 | |
| i — | |
| i 24 | |
| i 47 | |
| i 1 | |
| i 48 |
Net periodic (benefit) cost | | $ | ( i 24) | | $ | i 2 | | $ | ( i 22) | | $ | i 9 | | $ | i 4 | | $ | i 13 |
| | | | | | | | | | | | | | | | | | |
Post Retirement: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Service cost | | $ | i — | | $ | i 9 | | $ | i 9 | | $ | i — | | $ | i 8 | | $ | i 8 |
Interest cost | |
| i — | |
| i 12 | |
| i 12 | |
| i — | |
| i 13 | |
| i 13 |
Amortization of net gain | |
| i — | |
| ( i 10) | |
| ( i 10) | |
| i — | |
| ( i 39) | |
| ( i 39) |
Net periodic cost (benefit) | | $ | i — | | $ | i 11 | | $ | i 11 | | $ | i — | | $ | ( i 18) | | $ | ( i 18) |
| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended June 30, | ||||||||||||||||
| | 2022 | | 2021 | ||||||||||||||
|
| U.K. |
| U.S. |
| Total |
| U.K. |
| U.S. |
| Total | ||||||
| | (Amounts in thousands) | ||||||||||||||||
Pension: | | | | | | | | | | | | | | | | | | |
Interest cost | | $ | i 206 | | $ | i 7 | | $ | i 213 | | $ | i 182 | | $ | i 8 | | $ | i 190 |
Expected return on plan assets | |
| ( i 354) | |
| i — | |
| ( i 354) | |
| ( i 299) | |
| i — | |
| ( i 299) |
Amortization of past service costs | | | i 6 | | | i — | | | i 6 | | | i 6 | | | i — | | | i 6 |
Amortization of net loss | |
| i 73 | |
| i 1 | |
| i 74 | |
| i 136 | |
| i 3 | |
| i 139 |
Net periodic (benefit) cost | | $ | ( i 69) | | $ | i 8 | | $ | ( i 61) | | $ | i 25 | | $ | i 11 | | $ | i 36 |
| | | | | | | | | | | | | | | | | | |
Post Retirement: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Service cost | | $ | i — | | $ | i 31 | | $ | i 31 | | $ | i — | | $ | i 31 | | $ | i 31 |
Interest cost | |
| i — | |
| i 35 | |
| i 35 | |
| i — | |
| i 35 | |
| i 35 |
Amortization of net gain | |
| i — | |
| ( i 14) | |
| ( i 14) | |
| i — | |
| ( i 14) | |
| ( i 14) |
Net periodic cost | | $ | i — | | $ | i 52 | | $ | i 52 | | $ | i — | | $ | i 52 | | $ | i 52 |
/19
The fair value of the assets held by the U.K. pension plan by asset category are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Fair Values as of | ||||||||||||||||||||||
| | | ||||||||||||||||||||||
| | Fair Value Measurements Using Inputs Considered as | | Fair Value Measurements Using Inputs Considered as | ||||||||||||||||||||
Asset Category |
| Total |
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
| Level 1 |
| Level 2 |
| Level 3 | ||||||||
| | (Amounts in thousands) | ||||||||||||||||||||||
Cash on deposit | | $ | i 146 | | $ | i 146 | | $ | i — | | $ | i — | | $ | i 93 | | $ | i 93 | | $ | i — | | $ | i — |
Pooled funds | |
| i 9,916 | |
| i 9,916 | |
| i — | | | i — | |
| i 11,828 | |
| i 11,828 | |
| i — | | | i — |
Total plan assets | | $ | i 10,062 | | $ | i 10,062 | | $ | i — | | $ | i — | | $ | i 11,921 | | $ | i 11,921 | | $ | i — | | $ | i — |
i12. Income Taxes
An income tax expense of $ i 11 thousand was recorded for the three months ended June 30, 2022 compared to an income tax expense of $ i 35 thousand for the same period of 2021. An income tax expense of $ i 28 thousand was recorded for the nine months ended June 30, 2022 compared to an income tax expense of $ i 868 thousand for the same period of 2021. The income tax expense for the three and nine months ended June 30, 2022 is primarily driven by minimum state tax expenses, as the Company continues to maintain a full valuation allowance on their operations. The income tax expense for the three and nine months ended June 30, 2021 was driven by an increase in the valuation allowance against deferred tax assets in the period, offset by a benefit recorded for a change in tax law, allowing for the immediate deduction of covered expenses incurred through the Paycheck Protection Program.
We have in general historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. However, we used a discrete effective tax rate method to calculate income taxes for the quarter ended June 30, 2022 because we determined that our ordinary income or loss cannot be reliably estimated and small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rates.
/ i13. Accumulated Other Comprehensive Loss
iThe components of accumulated other comprehensive loss are as follows:
| | | | | | |
| | June 30, | | |||
|
| 2022 |
| 2021 | ||
| | (Amounts in thousands) | ||||
Cumulative effect of foreign currency translation, net | | $ | ( i 4,760) | | $ | ( i 4,050) |
Cumulative unrealized loss on pension liability | |
| ( i 5,398) | |
| ( i 5,398) |
Accumulated other comprehensive loss, net | | $ | ( i 10,158) | | $ | ( i 9,448) |
/ i14. Fair Value of Financial Assets and Liabilities
Under the fair value standards fair value is based on the exit price and defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement should reflect all the assumptions that market participants would use in pricing an asset or liability. A fair value hierarchy is established in the authoritative guidance outlined in three levels ranking from Level 1 to Level 3 with Level 1 being the highest priority.
Level 1: observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly
Level 3: unobservable inputs (e.g., a reporting entity’s or other entity’s own data)
The Company had i i no / assets or liabilities measured at fair value on a recurring (except our pension plan assets and whole life insurance policies, see Note 11 for pension plan assets) or non-recurring basis as of June 30, 2022 or September 30, 2021.
/20
To estimate fair value of the financial instruments below, quoted market prices are used when available and classified within Level 1. If this data is not available, we use observable market-based inputs to estimate fair value, which are classified within Level 2. If the preceding information is unavailable, we use internally generated data to estimate fair value which is classified within Level 3.
i
| | | | | | | | | | | | | | | |
| | As of June 30, 2022 | | | As of September 30, 2021 | | | | | ||||||
| | Carrying Amount | | | Fair Value | | | Carrying Amount | | | Fair Value | | Fair Value Level | | Reference |
| | (Amounts in thousands) | | | | | |||||||||
Assets: | | | | | | | | | | | | | |||
Cash and cash equivalents | $ | i 21,415 | | $ | i 21,415 | | $ | i 20,007 | | $ | i 20,007 | | 1 | | Condensed Consolidated Balance Sheets |
Accounts and long-term receivable* | | i 10,235 | | | i 10,235 | | | i 13,968 | | | i 13,968 | | 3 | | Note 6 |
Liabilities: | | | | | | | | | | | | | | | |
Accounts payable and accrued expenses and other long-term liabilities* | | i 5,830 | | | i 5,830 | | | i 5,747 | | | i 5,747 | | 3 | | Note 9 |
Line of Credit | | i 2,999 | | | i 2,999 | | | i 941 | | | i 941 | | 2 | | Note 10 |
Notes payable | | i 954 | | | i 954 | | | i 1,633 | | | i 1,633 | | 3 | | Note 10 |
*Original maturity over i one year
/
Cash and cash equivalents
Carrying amount approximated fair value.
Accounts and long-term receivable with original maturity over i one year
Fair value was estimated by discounting future cash flows based on the current rate with similar terms.
Line of credit
The fair value of our line of credit is based on borrowing rates currently available to a market participant for loans with similar terms or maturity. The carrying amount of our outstanding revolving line of credit approximates fair value because the base interest rate charged varies with market conditions and the credit spread is commensurate with current market spreads for issuers of similar risk. No interest accrues under the inventory line of credit when advances are paid within terms.
Notes Payable
Fair value was estimated by discounting future cash flows based on the current rate the Company could get in another transaction with similar terms based on historical information.
Fair value of accounts receivable with an original maturity of one year or less and accounts payable was not materially different from their carrying values as of June 30, 2022 and September 30, 2021.
21
15. Segment Information
iThe following tables present certain operating segment information for the three and nine months ended June 30, 2022 and 2021.
| | | | | | | | | | | | | | | |
| | | | | Technology Solutions Segment | | | | |||||||
| | High | | | | | | | | | | | | | |
| | Performance | | | | | | | | | | | | | |
| | Products | | United | | | | | | | | Consolidated | |||
Three months ended June 30, |
| Segment |
| Kingdom |
| U.S. |
| Total |
| Total | |||||
| | (Amounts in thousands) | |||||||||||||
2022 | | | | | | | | | | | | | | | |
Sales: | | | | | | | | | | | | | | | |
Product | | $ | i 427 | | $ | i 128 | | $ | i 7,883 | | $ | i 8,011 | | $ | i 8,438 |
Service | |
| i 311 | |
| i 83 | |
| i 4,494 | |
| i 4,577 | |
| i 4,888 |
Total sales | | $ | i 738 | | $ | i 211 | | $ | i 12,377 | | $ | i 12,588 | | $ | i 13,326 |
(Loss) income from operations | | $ | ( i 1,370) | | $ | ( i 29) | | $ | i 1,418 | | $ | i 1,389 | | $ | i 19 |
Total assets | | $ | i 8,862 | | $ | i 9,057 | | $ | i 46,597 | | $ | i 55,654 | | $ | i 64,516 |
Capital expenditures | | $ | i 27 | | $ | i — | | $ | i 1 | | $ | i 1 | | $ | i 28 |
Depreciation and amortization | | $ | i 28 | | $ | i — | | $ | i 51 | | $ | i 51 | | $ | i 79 |
| | | | | | | | | | | | | | | |
2021 | |
|
| |
|
| |
|
| |
|
| |
|
|
Sales: | |
|
| |
|
| |
|
| |
|
| |
|
|
Product | | $ | i 602 | | $ | i 130 | | $ | i 9,410 | | $ | i 9,540 | | $ | i 10,142 |
Service | |
| i 356 | |
| i 83 | |
| i 3,140 | |
| i 3,223 | |
| i 3,579 |
Total sales | | $ | i 958 | | $ | i 213 | | $ | i 12,550 | | $ | i 12,763 | | $ | i 13,721 |
(Loss) income from operations | | $ | ( i 1,372) | | $ | ( i 95) | | $ | i 1,110 | | $ | i 1,015 | | $ | ( i 357) |
Total assets | | $ | i 8,501 | | $ | i 9,942 | | $ | i 42,113 | | $ | i 52,055 | | $ | i 60,556 |
Capital expenditures | | $ | i 11 | | $ | i — | | $ | i 30 | | $ | i 30 | | $ | i 41 |
Depreciation and amortization | | $ | i 41 | | $ | i — | | $ | i 50 | | $ | i 50 | | $ | i 91 |
| | | | | | | | | | | | | | | |
| | | | | Technology Solutions Segment | | | | |||||||
| | High | | | | | | | | | | | | | |
| | Performance | | | | | | | | | | | | | |
| | Products | | United | | | | | | | | Consolidated | |||
Nine months ended June 30, |
| Segment |
| Kingdom |
| U.S. |
| Total |
| Total | |||||
| | (Amounts in thousands) | |||||||||||||
2022 | | | | | | | | | | | | | | | |
Sales: | | | | | | | | | | | | | | | |
Product | | $ | i 2,109 | | $ | i 402 | | $ | i 22,864 | | $ | i 23,266 | | $ | i 25,375 |
Service | |
| i 836 | |
| i 280 | |
| i 11,185 | |
| i 11,465 | |
| i 12,301 |
Total sales | | $ | i 2,945 | | $ | i 682 | | $ | i 34,049 | | $ | i 34,731 | | $ | i 37,676 |
(Loss) income from operations | | $ | ( i 3,477) | | $ | ( i 120) | | $ | i 3,196 | | $ | i 3,076 | | $ | ( i 401) |
Total assets | | $ | i 8,862 | | $ | i 9,057 | | $ | i 46,597 | | $ | i 55,654 | | $ | i 64,516 |
Capital expenditures | | $ | i 87 | | $ | i — | | $ | i 136 | | $ | i 136 | | $ | i 223 |
Depreciation and amortization | | $ | i 91 | | $ | i — | | $ | i 168 | | $ | i 168 | | $ | i 259 |
| | | | | | | | | | | | | | | |
2021 | |
|
| |
|
| |
|
| |
|
| |
|
|
Sales: | |
|
| |
|
| |
|
| |
|
| |
|
|
Product | | $ | i 2,494 | | $ | i 1,774 | | $ | i 25,258 | | $ | i 27,032 | | $ | i 29,526 |
Service | |
| i 908 | |
| i 260 | |
| i 8,503 | |
| i 8,763 | |
| i 9,671 |
Total sales | | $ | i 3,402 | | $ | i 2,034 | | $ | i 33,761 | | $ | i 35,795 | | $ | i 39,197 |
(Loss) income from operations | | $ | ( i 3,565) | | $ | ( i 130) | | $ | i 2,680 | | $ | i 2,550 | | $ | ( i 1,015) |
Total assets | | $ | i 8,501 | | $ | i 9,942 | | $ | i 42,113 | | $ | i 52,055 | | $ | i 60,556 |
Capital expenditures | | $ | i 18 | | $ | i — | | $ | i 66 | | $ | i 66 | | $ | i 84 |
Depreciation and amortization | | $ | i 134 | | $ | i — | | $ | i 159 | | $ | i 159 | | $ | i 293 |
/22
Income (loss) from operations consists of sales less cost of sales, engineering and development expenses, and selling, general and administrative expenses but is not affected by either other income/expense or by income taxes expense (benefit). Non-operating expenses/income consists principally of interest income from transactions with payment terms exceeding one year (see Note 6, “Accounts and Long-Term Receivable” for details), and interest expense. All intercompany transactions have been eliminated.
iThe following table lists customers from which the Company derived revenues of 10% or more of total revenues for the three and nine months ended June 30, 2022 and 2021.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, | | | Nine months ended June 30, | | ||||||||||||||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | | ||||||||||||
| | | | | | | | | | | | (in millions) | | | (in millions) | | ||||||||
| | Customer | | % of Total | | | Customer | | % of Total | | | Customer | | % of Total | | | Customer | | % of Total | | ||||
|
| Revenues |
| Revenues |
| | Revenues |
| Revenues |
| | Revenues |
| Revenues |
| | Revenues |
| Revenues |
| ||||
| | (Amounts in millions) | | |||||||||||||||||||||
Customer A | | $ | i 2.1 | | i 15 | % | | $ | i 0.5 | | i 4 | % | | $ | i 6.4 | | i 17 | % | | $ | i 2.3 | | i 6 | % |
Customer B | | $ | i 0.2 | | i 1 | % | | $ | i 1.4 | | i 11 | % | | $ | i 0.7 | | i 2 | % | | $ | i 2.2 | | i 6 | % |
Customer A had a balance of $ i 9.2 million, or i 38%, of total consolidated accounts receivable and long-term receivable as of June 30, 2022. There were no other customers with more than 10% of total consolidated accounts receivable and long-term receivable as of June 30, 2022. We believe that the Company is not exposed to any significant credit risk with respect to the accounts receivable with any customers as of June 30, 2022.
i16. Repurchase of Common Stock
On February 8, 2011, the Board of Directors authorized the Company to purchase up to i 250 thousand additional shares of the Company's outstanding common stock at market price. The plan does not expire. As of May 14, 2020, we suspended our stock repurchase program until further economic clarity. The Board of Directors approved the activation of the suspended stock repurchase program on December 29, 2021. The Company repurchased i 19,498 thousand shares of its outstanding common stock on the open market during the nine months ended June 30, 2022. As of June 30, 2022, approximately i 174,627 shares remain authorized to repurchase under the stock repurchase program.
/
i17. Subsequent Event
Subsequent to the quarter ended June 30, 2022, we entered into a $ i 12.8m sales agreement with a financing component, which includes receiving three payments with the final payment due in fiscal year 2024. We will receive the first payment during the fourth fiscal quarter of 2022. Our cost for this agreement will be paid in full in the fiscal fourth quarter of 2022. The revenue for this transaction will be recorded net during the fourth quarter of fiscal year 2022.
/
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The discussion below contains certain forward-looking statements including, but not limited to, among others, statements concerning future revenues and future business plans. Forward-looking statements include statements in which we use words such as “expect”, “believe”, “anticipate”, “intend”, “project”, “estimate”, “should”, “could”, “may”, “plan”, “potential”, “predict”, “project”, “will”, “would” and similar expressions. Although we believe the expectations reflected in such forward-looking statements are based on reasonable assumptions, the forward-looking statements are subject to significant risks and uncertainties, and thus we cannot assure you that these expectations will prove to have been correct, and actual results may vary from those contained in such forward-looking statements. We discuss many of these risks and uncertainties in Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, and in this Form 10-Q, included under Item 1A “Risk Factors.” Factors that may cause such variances include, but are not limited to, our dependence on a small number of customers for a significant portion of our revenue, our high dependence on contracts with the U.S. federal government, our reliance in certain circumstances on single sources for supply of key product components, intense competition in the market segments in which we operate, changes in the U.S. Tax laws, continued disruptions in the supply chain and inflationary pressures, the impact of the Ukraine-Russian military conflict on global trade and financial markets, and the impact of the novel coronavirus (COVID-19) on our business, results of operations and financial condition. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this document. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise. This management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this filing and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, impairment assessment of intangibles, income taxes, deferred compensation and retirement plans, as well as estimated selling prices used for revenue recognition and contingencies. We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A description of our critical accounting policies is contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 in the “Critical Accounting Policies” section contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management believes there have been no significant changes for the nine months ended June 30, 2022 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
Observations on effects of novel coronavirus and Russia/Ukraine Conflict
On March 11, 2020, the World Health Organization characterized the novel coronavirus outbreak as a pandemic. The outbreak has and continues to adversely affect the economies of the U.S., U.K., and other international markets and economies in which we operate. As a result of the World Health Organization characterizing the COVID-19 outbreak as a pandemic, national, state, and local governments have and continue to take actions such as declaring a state of emergency, implementing social distancing and other guidelines, and shutting down and/or limiting the opening or operation of certain businesses which are not considered essential.
24
In these times of pandemic, our top priorities are to protect the health, well-being, and safety of our employees and partners, while still focusing on the key drivers of our business. To that end, and to insure we continue to operate safely and cautiously while also meeting our public health responsibilities, the Company has adopted flexible business practices including allowing most employees to work remotely in all locations.
COVID-19 has adversely affected the distribution channel leading to significantly longer lead times when ordering product. Manufacturers are not producing as much product as prior to the pandemic due to disruptions, resulting in supply shortages. Additionally, recent global shipping delays have exacerbated this problem. The TS segment has many vendors it transacts with and supply shortages are pervasive with many of them. The HPP segment has also experienced shortages with their vendors as well. The HPP segment secured a $1.8 million contract for real-time networking monitoring for cyber attack detection in the first quarter of fiscal year 2022, but due to the delays by manufacturers the sale is anticipated to be recognized in revenue over the next two years when we can obtain the product from the manufacturers. Related to the supply shortage and potentially inflation, we have experienced price increases for our products, which we try to pass on to the customer.
We recognize the pandemic has created a dynamic and uncertain situation in the national economy, and we continue to closely monitor the latest information to make timely, informed business decisions and public disclosures regarding the potential impact of the pandemic on our operations. Despite reduced infection rates and ever-increasing vaccination rates in the United States, many nations and certain pockets within the United States are still battling various strains/variants of the novel coronavirus, creating ongoing uncertainties as to when economies will return to business as usual and what that will look like, what regulatory measures or voluntary actions will be further implemented to limit the spread of COVID-19 and its variants and the duration of any such measures. The extent, severity and impact of any further spread of COVID-19 variants or resurgence of COVID-19 in a given geographic region after it has hit its “peak,” and the extent to which herd immunity will be achieved through the vaccination process is still uncertain. In summary, the scope of this pandemic and its effects are unprecedented, and we cannot at this time make a reasonable estimate on the extent or duration of the impacts on our business.
As of June 30, 2022, the Russian/Ukrainian military conflict has not had a direct significant impact on revenue as we do not have any recurring customers in either country. However, we do have customers and suppliers in surrounding regions which may be affected and further escalation of the Russian-Ukraine military conflict and geopolitical tensions related to such military conflict could adversely affect our business, financial condition and results of operations, by among other things, cyber attacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets. It is not possible at this time to predict the size of the impact or consequences of the conflict to the Company and our customers and suppliers.
Results of Operations
Overview of the three months ended June 30, 2022
Our sales decreased by approximately $0.4 million, or 3%, to $13.3 million for the three months ended June 30, 2022 as compared to $13.7 million for the three months ended June 30, 2021. The decrease in sales is the result of a decrease of $0.2 million in our TS segment combined with a $0.2 million decrease in our HPP segment. Our gross margin percentage increased to 37% of sales for the three months ended June 30, 2022 as compared to 31% for the three months ended June 30, 2021. For the three months ended June 30, 2022 there was an operating income of $19 thousand compared to an operating loss of $357 thousand for the three months ended June 30, 2021. Other income, (expense) net increased $0.7 million for the three months ended to June 30, 2022 as compared to the three months ended June 30, 2021. This is primarily due to a net increase in foreign exchange gain of $0.7 million from the prior year. The income tax expense of $11 thousand for the three months ended June 30, 2022 is primarily driven by minimum state tax expenses, as the Company continues to maintain a full valuation allowance on their operations. The income tax expense of $35 thousand for the three months ended June 30, 2021 was primarily driven by an increase in the valuation allowance against deferred tax assets in the period, offset by a benefit recorded for the change in tax law, allowing for the immediate deduction of covered expense incurred through the Paycheck Protection Program.
25
The following table details our results of operations in dollars and as a percentage of sales for the three months ended June 30, 2022 and 2021:
| | | | | | | | | | | |
| | | | | % | | | | | % | |
|
|
| of sales |
|
| of sales |
| ||||
| | (Dollar amounts in thousands) |
| ||||||||
Sales | | $ | 13,326 |
| 100 | % | $ | 13,721 |
| 100 | % |
Costs and expenses: | |
|
|
|
| |
|
|
|
| |
Cost of sales | |
| 8,352 |
| 63 | % |
| 9,492 |
| 69 | % |
Engineering and development | |
| 884 |
| 7 | % |
| 700 |
| 6 | % |
Selling, general and administrative | |
| 4,071 |
| 31 | % |
| 3,886 |
| 28 | % |
Total costs and expenses | |
| 13,307 |
| 100 | % |
| 14,078 |
| 103 | % |
Operating income (loss) | |
| 19 |
| — | % |
| (357) |
| (3) | % |
Other income, (expense) net | |
| 676 |
| 5 | % |
| (31) |
| — | % |
Income (loss) before income taxes | |
| 695 |
| 5 | % |
| (388) |
| (3) | % |
Income tax expense | |
| 11 |
| — | % |
| 35 |
| — | % |
Net income (loss) | | $ | 684 |
| 5 | % | $ | (423) |
| (3) | % |
Sales
Our sales decreased by approximately $0.4 million to $13.3 million for the three months ended June 30, 2022 as compared to $13.7 million for the prior year period. The decrease in sales is the result of a decrease of $0.2 million in our TS segment combined with a $0.2 million decrease in our HPP segment.
TS segment sales change was as follows for the three months ended June 30, 2022 and 2021:
| | | | | | | | | | | | |
| | June 30, | | Increase (decrease) |
| |||||||
|
| 2022 |
| 2021 |
| $ |
| % |
| |||
| | (Dollar amounts in thousands) | | |||||||||
Products | | $ | 8,011 | | $ | 9,540 | | $ | (1,529) | | (16) | % |
Services | |
| 4,577 | |
| 3,223 | |
| 1,354 | | 42 | % |
Total | | $ | 12,588 | | $ | 12,763 | | $ | (175) | | (1) | % |
The decrease in TS segment product sales of $1.5 million during the period is attributable to a decrease in the U.S. division due to decreased sales to several major customers and delays in obtaining product due to supply chain shortages. Service sales for the three months ended June 30, 2022 increased $1.4 million from the prior year period, which is attributable to the U.S. division. The increase in service sales included increased internal and third party service sales of $0.6 million, increased managed services sales of $0.4 million, and increased third party maintenance sales of $0.4 million.
HPP segment sales change was as follows for the three months ended June 30, 2022 and 2021:
| | | | | | | | | | | | |
| | June 30, | | Decrease |
| |||||||
|
| 2022 |
| 2021 |
| $ |
| % |
| |||
| | (Dollar amounts in thousands) | | |||||||||
Products | | $ | 427 | | $ | 602 | | $ | (175) | | (29) | % |
Services | |
| 311 | |
| 356 | |
| (45) | | (13) | % |
Total | | $ | 738 | | $ | 958 | | $ | (220) | | (23) | % |
The HPP product sales decreased by $0.2 million for the three months ended June 30, 2022 as compared to the prior year period as a result of a decrease in Myricom sales. The HPP services sales remained relatively flat for the three months ended June 30, 2022 compared to the prior year period as a result of ARIA revenue increasing $0.1 million, offset with a decrease of $0.1 million in royalties on high-speed processing boards related to the E2D program.
26
Our sales by geographic area, which is based on the customer location to which the products were shipped or services rendered, were as follows for the three months ended June 30, 2022 and 2021:
| | | | | | | | | | | | | | | | |
| | June 30, | | Increase (decrease) |
| |||||||||||
|
| 2022 |
| % |
| 2021 |
| % |
| $ |
| % |
| |||
| | (Dollar amounts in thousands) | | |||||||||||||
Americas | | $ | 13,020 |
| 98 | % | $ | 12,764 |
| 93 | % | $ | 256 | | 2 | % |
Europe | |
| 189 |
| 1 | % |
| 747 |
| 5 | % |
| (558) | | (75) | % |
Asia | |
| 117 |
| 1 | % |
| 210 |
| 2 | % |
| (93) | | (44) | % |
Totals | | $ | 13,326 |
| 100 | % | $ | 13,721 |
| 100 | % | $ | (395) | | (3) | % |
The $0.3 million increase in sales to the Americas was primarily the result of an increase in the TS segment’s U.S. division of $0.4 million, partially offset by decreased sales by our HPP segment of $0.1 million. The $0.6 million decrease in sales to Europe was primarily the result of decreased sales by our TS segment’s U.S. division of $0.4 million combined with a decrease in the HPP division of $0.2 million. The sales to Asia decreased by $0.1 million primarily due to a decrease in the TS segment’s U.S. division.
Gross Margins
Our gross margin ("GM") increased $0.7 million for the three months ended June 30, 2022 as compared to the prior year period. The GM as a percentage of sales increased to 37% for the three months ended June 30, 2022 as compared to the prior year period of 31%.
| | | | | | | | | | | | | | | | |
| | | | | | | | |||||||||
| | 2022 | | 2021 | | Increase (decrease) |
| |||||||||
|
| GM$ |
| GM% |
| GM$ |
| GM% |
| GM$ |
| GM% |
| |||
| | (Dollar amounts in thousands) | | |||||||||||||
TS | | $ | 4,612 |
| 37 | % | $ | 3,664 |
| 29 | % | $ | 948 |
| 8 | % |
HPP | |
| 362 |
| 49 | % |
| 565 |
| 59 | % |
| (203) |
| (10) | % |
Total | | $ | 4,974 |
| 37 | % | $ | 4,229 |
| 31 | % | $ | 745 |
| 6 | % |
The impact of product mix within our TS segment on gross margin for the three months ended June 30, 2022 and 2021 was as follows:
| | | | | | | | | | | | | | | | |
| | | | | | | | |||||||||
| | 2022 | | 2021 | | Increase (decrease) |
| |||||||||
|
| GM$ |
| GM% |
| GM$ |
| GM% |
| GM$ |
| GM% |
| |||
| | (Dollar amounts in thousands) | | |||||||||||||
Products | | $ | 1,745 |
| 22 | % | $ | 1,748 |
| 18 | % | $ | (3) |
| 4 | % |
Services | |
| 2,867 |
| 63 | % |
| 1,916 |
| 59 | % |
| 951 |
| 4 | % |
Total | | $ | 4,612 |
| 37 | % | $ | 3,664 |
| 29 | % | $ | 948 |
| 8 | % |
The overall TS segment GM as a percentage of sales increased to 37% for the three month period ended June 30, 2022 compared to 29% for the prior year period. This was primarily due to increased GM from services revenue, which is relatively higher margin compared to product revenue from the prior year. Product GM as a percentage of product sales increased to 22% for the three months ended June 30, 2022 from 18% for the prior year period. This was primarily due to higher margin products being sold to several major customers. Service GM as a percentage of service sales increased to 63% for the three months ended June 30, 2022 from 59% for the prior year period due to increased third party maintenance sales and increased selling prices for internal services in proportion to cost of sales.
27
The impact of product mix within our HPP segment on gross margin for the three months ended June 30, 2022 and 2021 was as follows:
| | | | | | | | | | | | | | | | |
| | | | | | | | |||||||||
| | 2022 | | 2021 | | Decrease |
| |||||||||
|
| GM$ |
| GM% |
| GM$ |
| GM% |
| GM$ |
| GM% |
| |||
| | (Dollar amounts in thousands) | | |||||||||||||
Products | | $ | 144 |
| 34 | % | $ | 219 |
| 36 | % | $ | (75) |
| (2) | % |
Services | |
| 218 |
| 70 | % |
| 346 |
| 97 | % |
| (128) |
| (27) | % |
Total | | $ | 362 |
| 49 | % | $ | 565 |
| 59 | % | $ | (203) |
| (10) | % |
The overall HPP segment GM as a percentage of sales decreased to 49% for the three months ended June 30, 2022 from 59% for the three months ended June 30, 2021. The 2% decrease in product GM as a percentage of product revenue for the three months ended June 30, 2022 compared to the same prior year period is due to product mix. The 27% decrease in service GM as a percentage of services revenue from prior year was due to decreased royalty sales, which are nearly all margin along with increased manufacturing overhead expenses including payroll.
Engineering and Development Expenses
The engineering and development expenses incurred by our HPP segment increased $184 thousand for the three months ended June 30, 2022 to $0.9 million when compared to the prior year period due to increased consulting expenses. The current period expenses were primarily for product engineering expenses incurred in connection with the continued development of the ARIA Zero Trust Gateway cyber security products.
Selling, General and Administrative Expenses
The following table details our selling, general and administrative (“SG&A”) expense by operating segment for the three months ended June 30, 2022 and 2021:
| | | | | | | | | | | | | | | | |
| | Three months ended June 30 | | | $ | | % |
| ||||||||
| | | | | % of | | | | | % of | | | Increase | | Increase | |
|
| 2022 |
| Total |
| 2021 |
| Total |
| | (Decrease) |
| (Decrease) | | ||
| | (Dollar amounts in thousands) | | |||||||||||||
By Operating Segment: |
| |
|
|
|
| |
|
|
|
| |
|
|
| |
TS segment | | $ | 3,223 |
| 79 | % | $ | 2,649 |
| 68 | % | $ | 574 |
| 22 | % |
HPP segment | |
| 848 |
| 21 | % |
| 1,237 |
| 32 | % |
| (389) |
| (31) | % |
Total | | $ | 4,071 |
| 100 | % | $ | 3,886 |
| 100 | % | $ | 185 |
| 5 | % |
SG&A expenses of $4.1 million for the three months ended June 30, 2022 increased $0.2 million as compared to the prior year period. The TS segment G&A expenses increased by approximately $0.6 million due to increased variable compensation. The HPP segment SG&A expenses decreased approximately $0.4 million for the three months ended June 30, 2022 as compared to the prior year period due to decreased headcount related payroll expenses and stock compensation.
28
Other Income/Expenses
The following table details other income (expense) for the three months ended June 30, 2022 and 2021:
| | | | | | | | | |
| | Three months ended | | | | ||||
| | | | | | | | Increase | |
|
|
|
| (Decrease) | |||||
| | (Amounts in thousands) | |||||||
Foreign exchange gain (loss) | | $ | 618 | | $ | (110) | | $ | 728 |
Interest expense | | | (80) | | | (131) | | | 51 |
Interest income | |
| 158 | |
| 175 | |
| (17) |
Other income (expense), net | |
| (20) | |
| 35 | |
| (55) |
Total other income (expense), net | | $ | 676 | | $ | (31) | | $ | 707 |
The $0.7 million increase in total other income (expense), net for the three months ended June 30, 2022 as compared to the prior year period is primarily due to a net increase in foreign exchange gain of $0.7 million.
In consolidation, U.S. dollars and Euros are remeasured into the functional currency, British Pounds, of our U.K. subsidiary. This non-cash remeasurement is included in foreign exchange gain or loss on the income statement and the foreign exchange gain is primarily from a Euro and U.S. Dollar bank account. The US dollar strengthened relative to the British Pound for the three months ended June 30, 2022 causing a foreign exchange gain combined with the Euro strengthening relative to the British Pound for the same period.
The interest income decrease of $17 thousand for the three months ended June 30, 2022 as compared to the prior year period is primarily due to more principal payments and the receivables accruing less interest from prior year periods, partially offset with additional agreements that have payment terms in excess of one year (see Note 6 in Item 1 to this Quarterly Report on Form 10-Q for details) from the TS-US segment in the current year.
The interest expense decrease of $51 thousand for the three months ended June 30, 2022 as compared to the prior year period is related to the TS U.S. division entering into two large multi-year contracts in the second quarter of fiscal year 2021, which incurred less interest expense in fiscal year 2022 due to principal payments. Payments on these agreements contain both principal and interest expense. See Note 10 in Item 1 to this Quarterly Report on Form 10-Q for details.
Income Taxes
The income tax expense of $11 thousand for the three months ended June 30, 2022 is primarily driven by minimum state tax expenses, as the Company continues to maintain a full valuation allowance on their operations. The income tax expense of $35 thousand for the three months ended June 30, 2021 was primarily driven by an increase in the valuation allowance against deferred tax assets in the period,offset by a benefit recorded for the change in tax law, allowing for the immediate deduction of covered expense incurred through the Paycheck Protection Program.
We have in general historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. However, we used a discrete effective tax rate method to calculate income taxes for the quarter ended June 30, 2022 because we determined that our ordinary income or loss cannot be reliably estimated and small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rates.
Overview of the nine months ended June 30, 2022
Our sales decreased by approximately $1.5 million, or 4%, to $37.7 million for the nine months ended June 30, 2022 as compared to $39.2 million for the nine months ended June 30, 2021. The decrease in sales is the result of a decrease of $1.1 million in our TS segment and a decrease of approximately $0.4 million in our HPP segment. Our gross margin percentage increased to 34% of sales for the nine months ended June 30, 2022 as compared to 31% for the nine months
29
ended June 30, 2021. For the nine months ended June 30, 2022 there was an operating loss of $0.4 million compared to an operating loss of $1.0 million for the nine months ended June 30, 2021. Other income, (expense) net decreased $0.9 million for the nine months ended to June 30, 2022 as compared to the nine months ended June 30, 2021. The two largest items contributing to this change is the forgiveness of the Payroll Protection Program loans in the prior year in the amount of $2.2 million causing a gain which did not occur in the current period, partially offset with a net increase in foreign exchange gain of $1.5 million from the prior year. The income tax expense of $28 thousand for the nine months ended June 30, 2022 is primarily driven by minimum state tax expenses, as the Company continues to maintain a full valuation allowance on their operations. The income tax expense of $868 thousand for the nine months ended June 30, 2021 was primarily driven by an increase in the valuation allowance against deferred tax assets in the period, offset by a benefit recorded for the change in tax law, allowing for the immediate deduction of covered expense incurred through the Paycheck Protection Program.
The following table details our results of operations in dollars and as a percentage of sales for the nine months ended June 30, 2022 and 2021:
| | | | | | | | | | | |
| | | | | % | | | | | % |
|
|
|
| of sales |
|
| of sales |
| ||||
| | (Dollar amounts in thousands) |
| ||||||||
Sales | | $ | 37,676 |
| 100 | % | $ | 39,197 |
| 100 | % |
Costs and expenses: | |
|
|
|
| |
|
|
|
| |
Cost of sales | |
| 24,888 |
| 66 | % |
| 27,222 |
| 69 | % |
Engineering and development | |
| 2,228 |
| 6 | % |
| 2,191 |
| 6 | % |
Selling, general and administrative | |
| 10,961 |
| 29 | % |
| 10,799 |
| 28 | % |
Total costs and expenses | |
| 38,077 |
| 101 | % |
| 40,212 |
| 103 | % |
Operating loss | |
| (401) |
| (1) | % |
| (1,015) |
| (3) | % |
Other income, (expense) net | |
| 903 |
| 2 | % |
| 1,764 |
| 5 | % |
Income before income taxes | |
| 502 |
| 1 | % |
| 749 |
| 2 | % |
Income tax expense | |
| 28 |
| — | % |
| 868 |
| 2 | % |
Net income (loss) | | $ | 474 |
| 1 | % | $ | (119) |
| — | % |
Sales
Our sales decreased by approximately $1.5 million to $37.7 million for the nine months ended June 30, 2022 as compared to $39.2 million for the prior year period. The decrease in sales is the result of a decrease of $1.1 million in our TS segment and a decrease of approximately $0.4 million in our HPP segment.
TS segment sales change was as follows for the nine months ended June 30, 2022 and 2021:
| | | | | | | | | | | | |
| | June 30, | | Increase (decrease) |
| |||||||
|
| 2022 |
| 2021 |
| $ |
| % |
| |||
| | (Dollar amounts in thousands) | | |||||||||
Products | | $ | 23,266 | | $ | 27,032 | | $ | (3,766) | | (14) | % |
Services | |
| 11,465 | |
| 8,763 | |
| 2,702 | | 31 | % |
Total | | $ | 34,731 | | $ | 35,795 | | $ | (1,064) | | (3) | % |
The decrease in TS segment product sales of $3.8 million during the period as compared to the prior year period is attributable to a decrease in the U.S. division of $2.4 million due to decreased sales to several major customers and delays in obtaining product due to supply chain shortages, combined with decreased sales in the U.K. division of $1.4 million due to one customer not repeating a high volume of sales in the current period. Service sales for the nine months ended June 30, 2022 increased $2.7 million from the prior year period, which is attributable to the U.S. division. The changes in service sales included increased internal and third party service sales of $1.3 million, increased managed services sales of $1.2 million, and increased third party maintenance sales of $0.2 million.
30
HPP segment sales change was as follows for the nine months ended June 30, 2022 and 2021:
| | | | | | | | | | | | |
|
| | June 30, | Decrease |
| |||||||
| | 2022 |
| 2021 |
| $ |
| % | | |||
| | (Dollar amounts in thousands) | | |||||||||
Products | | $ | 2,109 | | $ | 2,494 | | $ | (385) | | (15) | % |
Services | |
| 836 | |
| 908 | |
| (72) | | (8) | % |
Total | | $ | 2,945 | | $ | 3,402 | | $ | (457) | | (13) | % |
The HPP product sales decreased by $0.4 million for the nine months ended June 30, 2022 as compared to the prior year period, primarily as a result of an approximately $0.5 million decrease in E2D part sales, partially offset with an increase of Myricom sales of $0.1 million. The HPP services sales decreased $0.1 million for the nine months ended June 30, 2022 compared to the prior year period from decreased royalties on high-speed processing boards related to the E2D program of $0.1 million combined with decreased repairs of $0.1 million, partially offset with an increase of $0.1 million in ARIA revenue.
Our sales by geographic area, which is based on the customer location to which the products were shipped or services rendered, were as follows for the nine months ended June 30, 2022 and 2021:
| | | | | | | | | | | | | | | | |
| | June 30, | | Increase (decrease) | | |||||||||||
|
| 2022 |
| % |
| 2021 |
| % |
| $ |
| % |
| |||
| | (Dollar amounts in thousands) | | |||||||||||||
Americas | | $ | 36,187 |
| 96 | % | $ | 35,547 |
| 91 | % | $ | 640 | | 2 | % |
Europe | |
| 1,202 |
| 3 | % |
| 3,067 |
| 8 | % |
| (1,865) | | (61) | % |
Asia | |
| 287 |
| 1 | % |
| 583 |
| 1 | % |
| (296) | | (51) | % |
Totals | | $ | 37,676 |
| 100 | % | $ | 39,197 |
| 100 | % | $ | (1,521) | | (4) | % |
The $0.6 million increase in sales to the Americas was primarily the result of an increase in the TS segment’s U.S. division of $0.8 million, partially offset with a decrease in the TS U.K. division of $0.2 million. The $1.9 million decrease in sales to Europe was primarily the result of decreased sales by our TS Segment’s U.K. division of $1.2 million due to a large volume by one customer in the prior year which did not reoccur in the current period combined with a decrease in the TS U.S. division of $0.3 million and a decrease in the HPP segment of $0.3 million. The sales to Asia decreased by $0.3 million due to a decrease in the HPP segment of $0.2 million combined with a decrease in the TS segment’s U.S. division of $0.1 million.
Gross Margins
Our gross margin ("GM") increased $0.8 million for the nine months ended June 30, 2022 as compared to the prior year period. The GM as a percentage of total sales increased to 34% for the nine months ended June 30, 2022 as compared to the prior year period of 31%. The GM as a percentage of total sales increased in the TS segment, but this was partially offset by a decrease in the HPP segment.
| | | | | | | | | | | | | | | | |
| | | | | | | | |||||||||
| | 2022 | | 2021 | | Increase (decrease) |
| |||||||||
| | (Dollar amounts in thousands) | | |||||||||||||
|
| GM$ |
| GM% |
| GM$ |
| GM% |
| GM$ |
| GM% |
| |||
TS | | $ | 11,284 |
| 32 | % | $ | 9,985 |
| 28 | % | $ | 1,299 |
| 4 | % |
HPP | |
| 1,504 |
| 51 | % |
| 1,990 |
| 58 | % |
| (486) |
| (7) | % |
Total | | $ | 12,788 |
| 34 | % | $ | 11,975 |
| 31 | % | $ | 813 |
| 3 | % |
31
The impact of product mix within our TS segment on gross margin for the nine months ended June 30, 2022 and 2021 was as follows:
| | | | | | | | | | | | | | | | |
| | | | | | | | |||||||||
| | 2022 | | 2021 | | Increase (decrease) |
| |||||||||
|
| GM$ |
| GM% |
| GM$ |
| GM% |
| GM$ |
| GM% |
| |||
| | (Dollar amounts in thousands) | | |||||||||||||
Products | | $ | 4,459 |
| 19 | % | $ | 4,728 |
| 17 | % | $ | (269) |
| 2 | % |
Services | |
| 6,825 |
| 60 | % |
| 5,257 |
| 60 | % |
| 1,568 |
| — | % |
Total | | $ | 11,284 |
| 32 | % | $ | 9,985 |
| 28 | % | $ | 1,299 |
| 4 | % |
The TS segment GM as a percentage of total sales increased to 32% for the nine month period ended June 30, 2022 compared to 28% from the prior year period. This was primarily due to significantly increased GM from services compared to the prior year period combined with increased product GM as a percentage of revenue to 19% for the nine month period ended June 30, 2022 compared to 17% for the prior year period. The product GM as a percentage of product revenue was primarily due higher margin products being sold to several customers including a new customer having significant volume with relatively high margins. Service GM as a percentage of service sales remained relatively flat at 60% for the nine months ended June 30, 2022 compared to the prior year period due to increased sales offset with the U.S. division having wage increases and additional hires to sustain the growth of managed services.
The impact of product mix within our HPP segment on gross margin for the nine months ended June 30, 2022 and 2021 was as follows:
| | | | | | | | | | | | | | | | |
| | | | | | | | |||||||||
| | 2022 | | 2021 | | Decrease |
| |||||||||
| | (Dollar amounts in thousands) | | |||||||||||||
|
| GM$ |
| GM% |
| GM$ |
| GM% |
| GM$ |
| GM% |
| |||
Products | | $ | 826 |
| 39 | % | $ | 1,120 |
| 45 | % | $ | (294) |
| (6) | % |
Services | |
| 678 |
| 81 | % |
| 870 |
| 96 | % |
| (192) |
| (15) | % |
Total | | $ | 1,504 |
| 51 | % | $ | 1,990 |
| 58 | % | $ | (486) |
| (7) | % |
The overall HPP segment GM as a percentage of sales decreased to 51% for the nine months ended June 30, 2022 from 58% for the nine months ended June 30, 2021. The 6% decrease in product GM was primarily attributed to lower margin product sold for the nine months ended June 30, 2022 compared to the same prior year period. The 15% decrease in service GM as a percentage of services revenue from the prior year period was due to decreased royalty sales, which are nearly all margin along with increased manufacturing overhead expenses including payroll.
Engineering and Development Expenses
The engineering and development expenses incurred by our HPP segment remained relatively flat at $2.2 million for the nine months ended June 30, 2022 when compared to the prior year period due to decreased headcount related expenses offset with higher consulting expenses. The current period expenses were primarily for product engineering expenses incurred in connection with the continued development of the ARIA Zero Trust Gateway cyber security products.
32
Selling, General and Administrative Expenses
The following table details our selling, general and administrative (“SG&A”) expense by operating segment for the nine months ended June 30, 2022 and 2021:
| | | | | | | | | | | | | | | | |
| | Nine months ended June 30, | | | $ | | % | | ||||||||
| | | | | % of | | | | | % of | | | Increase | | Increase | |
|
| 2022 |
| Total |
| 2021 |
| Total |
| | (Decrease) |
| (Decrease) | | ||
| | (Dollar amounts in thousands) | | |||||||||||||
By Operating Segment: |
| |
|
|
|
| |
|
|
|
| |
|
|
| |
TS segment | | $ | 8,208 |
| 75 | % | $ | 7,435 |
| 69 | % | $ | 773 |
| 10 | % |
HPP segment | |
| 2,753 |
| 25 | % |
| 3,364 |
| 31 | % |
| (611) |
| (18) | % |
Total | | $ | 10,961 |
| 100 | % | $ | 10,799 |
| 100 | % | $ | 162 |
| 2 | % |
SG&A expenses decreased $0.2 million for the nine months ended June 30, 2022 compared to the prior year period. The $0.8 million increase in TS segment SG&A expenses compared to the same prior year period is primarily the result of approximately $0.7 million increased variable compensation and $0.1 million increased marketing, travel, and other expenses. The HPP segment SG&A expenses decreased approximately $0.6 million for the nine months ended June 30, 2022 as compared to the prior year period due to a decrease in headcount as well as a decrease in expenses including variable and stock compensation.
Other Income/Expenses
The following table details other income (expense) for the nine months ended June 30, 2022 and 2021:
| | | | | | | | | | |
| | Nine months ended | | | | | ||||
| | | | | | | | Increase | | |
|
|
|
| (Decrease) | | |||||
| | (Amounts in thousands) | | |||||||
Foreign exchange gain (loss) | | $ | 777 | | $ | (731) | | $ | 1,508 | |
Interest expense | | | (286) | | | (244) | | | (42) | |
Interest income | |
| 429 | |
| 406 | |
| 23 | |
Gain on debt forgiveness | | | — | | | 2,196 | | | (2,196) | |
Other income, net | |
| (17) | |
| 137 | |
| (154) | |
Total other income (expense), net | | $ | 903 | | $ | 1,764 | | $ | (861) | |
The $0.9 million decrease in total other income (expense), net for the nine months ended June 30, 2022 as compared to the prior year period is primarily due to forgiveness of the Payroll Protection Program loans in the prior year for a gain of $2.2 million, partially offset with a net change of foreign exchange gain of approximately $1.5 million in the current period. Additionally, other income (expense), net decreased by $0.2 million primarily due to a one-time gain from an overpayment of a rebate received in the prior year, which did not reoccur in the current year period. The rebate was several years old, which is the reason it was recorded in other income (expense), net.
In consolidation, U.S. dollars and Euros are remeasured into the functional currency, British Pounds, of our U.K. subsidiary. This non-cash remeasurement is included in foreign exchange gain or loss on the income statement and the foreign exchange gain is primarily from a U.S. Dollar bank account, partially offset with a foreign exchange loss from a Euro bank account. The US dollar significantly strengthened relative to the British Pound for the nine months ended June 30, 2022 which caused the foreign exchange gain, partially offset by the Euro weakening relative to the British Pound for the same period.
The interest income increase of $23 thousand for the nine months ended June 30, 2022 as compared to the prior year period is primarily related to additional interest income from agreements that have payment terms in excess of one year (see Note 6 in Item 1 to this Quarterly Report on Form 10-Q for details) during fiscal year 2022, which were partially offset with lower interest income recognized from prior agreements as time elapses due to principal payments being received in the TS-US segment from agreements in the prior year periods.
33
The interest expense increase of $42 thousand for the nine months ended June 30, 2022 as compared to the prior year period is related to the TS U.S. division entering into multiple multi-year contracts starting in the second quarter of fiscal year 2021 causing fiscal year 2022 to increase due to a full nine months of interest expense incurred. Payments on these agreements contain both principal and interest expense. See Note 10 in Item 1 to this Quarterly Report on Form 10-Q for details.
Income Taxes
The income tax expense of $28 thousand for the nine months ended June 30, 2022 is primarily driven by minimum state tax expenses, as the Company continues to maintain a full valuation allowance on their operations. The income tax expense of $868 thousand for the nine months ended June 30, 2021 was primarily driven by an increase in the valuation allowance against deferred tax assets in the period, offset by a benefit recorded for the change in tax law, allowing for the immediate deduction of covered expense incurred through the Paycheck Protection Program.
We have in general historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. However, we used a discrete effective tax rate method to calculate income taxes for the quarter ended June 30, 2022 because we determined that our ordinary income or loss cannot be reliably estimated and small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rates.
Liquidity and Capital Resources
Our primary source of liquidity is our cash and cash equivalents, which increased by $1.4 million to $21.4 million as of June 30, 2022 from $20.0 million as of September 30, 2021.
Our significant sources of cash for the nine months ended June 30, 2022 included an increase in deferred revenue of $2.9 million, an increase of $2.1 million in net amount received under the line-of-credit agreement, and a decrease in accounts receivable and long-term receivable of $2.1 million.
Our significant uses of cash for the nine months ended June 30, 2022 were primarily related to a decrease in accounts payable and accrued expenses and other long-term liabilities of $2.1 million, an increase in inventory of $1.6 million, repayment of life insurance policy loans of $0.9 million, repayments on debt of $0.7 million, and purchases of property, equipment, and improvements of $0.2 million.
Our cash held by our foreign subsidiary in the United Kingdom totaled approximately $8.9 million as of June 30, 2022 and consisted of 0.4 million Euros, 0.3 million British Pounds, and 8.3 million U.S. Dollars. This cash is included in our total cash and cash equivalents reported within our financial statements.
As of June 30, 2022 and September 30, 2021, the Company maintained a line of credit with a capacity of up to $15.0 million for inventory accessible to both the HPP and TS segments. This line of credit also includes availability of a limited cash withdrawal of up to $1.0 million. An amount of $12.0 million and $14.1 million were available as of June 30, 2022 and September 30, 2021, respectively. As of June 30, 2022 and September 30, 2021 there were no cash withdrawals outstanding. For a further discussion of the Company’s line of credit, including its financial covenants, see Item 1, Note 10 “Notes Payable and Line of Credit.”
If cash generated from operations is insufficient to satisfy working capital requirements, we may need to access funds through bank loans or other means. If we are unable to secure additional financing, we may not be able to complete development or enhancement of products, take advantage of future opportunities, respond to competition, retain key employees, or continue to effectively operate our business.
Based on our current plans and business conditions, management believes that the Company’s available cash and cash equivalents, the cash generated from operations, and availability on our line of credit will be sufficient to provide for the Company’s working capital and capital expenditure requirements for at least 12 months from the date of this filing.
34
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2022. Our Chief Executive Officer, our Chief Financial Officer and other members of our senior management team supervised and participated in this evaluation. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
During the nine months ended June 30, 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1A. Risk factors
Except as set forth below, there have been no material changes to the risk factors set forth in Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.
Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine.
The global economy has been negatively impacted by the military conflict between Russia and Ukraine. Furthermore, governments in the United States, United Kingdom and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. Although we do not have significant customers or suppliers in Russia or Ukraine, we do have customers and suppliers in surrounding regions which may be affected. Further escalation of Russian-Ukraine military conflict and geopolitical tensions related to such military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyber attacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business, financial condition and results of operations. In addition, the effects of the ongoing conflict could heighten many of our known risks described in section entitled "Risk Factors" in Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 filed with the SEC on December 9, 2021.
35
Item 2. Purchases of equity securities
On February 8, 2011, the Board of Directors authorized the Company to repurchase up to 250 thousand additional shares of the Company's outstanding common stock at market price. The plan does not expire. As of May 14, 2020, we suspended our stock repurchase program until further economic clarity. The Board of Directors approved the activation of the suspended stock repurchase program on December 29, 2021. The Company repurchased approximately 7 thousand shares of its outstanding common stock on the open market during the three months ended June 30, 2022. As of June 30, 2022, approximately 175 thousand shares remain authorized to repurchase under the stock repurchase program
Common stock of CSP Inc. may be repurchased on the open market at the discretion of management. Open market repurchases will be made in compliance with the Securities and Exchanges Commission’s Rule 10b-18 in addition to complying with applicable legal and other considerations. Below are the purchases that have been made for the three months ended June 30, 2022.
| | | | | | | | |
Period | Total number of shares purchased | | Average price paid per share | | Total number of shares purchased as part of publicly announced plans (1) | | Maximum number that may yet be purchased under the repurchase plan | |
April 1-30, 2022 | 4,500 | | $ | 7.46 | | 4,500 | | 176,827 |
May 1-31, 2022 | 1,300 | | $ | 7.44 | | 1,300 | | 175,527 |
June 1-30, 2022 | 900 | | $ | 9.03 | | 900 | | 174,627 |
| (1) | On December 29, 2021, the Company announced the commencement of purchases under our stock repurchase program, which was originally authorized and announced February 8, 2011. This program originally allowed the Company to purchase up to 250,000 shares of its Common Stock. As of the December 29, 2021 announcement, 194,125 shares of Common Stock were available to be repurchased under the stock repurchase program. The program does not expire. The stock repurchase program may be suspended, terminated, or modified at any time for any reason. |
Item 6. Exhibits
| | |
Number |
| Description |
31.1* | | Rule 13(a)-14(a) / 15d-14(a) Certification of Chief Executive Officer |
| | |
31.2* | | Rule 13(a)-14(a) / 15d-14(a) Certification of Chief Financial Officer |
| | |
32.1* | | Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer |
| | |
101* | | The following financial statements for the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 formatted in eXtensible Business Reporting Language (XBRL) (a) our Condensed Consolidated Balance Sheets as of June 30, 2022 and September 30, 2021, (b) our Condensed Consolidated Statements of Income (Loss) for the three and nine months ended June 30, 2022 and 2021, (c) our Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended June 30, 2022 and 2021, (d) our Condensed Consolidated Statement of Shareholders’ Equity for the three and nine months ended June 30, 2022 and 2021, (e) our Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2022 and 2021 and (f) the Notes to such Condensed Consolidated Financial Statements. |
104* | | The cover page from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in inline XBRL. |
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CSP INC. | |
| | |
By: | /s/ Victor Dellovo | |
| | |
| | Chief Executive Officer, |
| | President and Director |
| | |
By: | /s/ Gary W. Levine | |
| | |
| | Chief Financial Officer |
37
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 12/15/22 | ||||
| 9/30/22 | ||||
| Filed on: | 8/10/22 | 8-K | ||
| 8/8/22 | ||||
| For Period end: | 6/30/22 | |||
| 3/31/22 | 10-Q | |||
| 12/29/21 | ||||
| 12/9/21 | ||||
| 9/30/21 | 10-K | |||
| 6/30/21 | 10-Q | |||
| 3/31/21 | 10-Q | |||
| 9/30/20 | 10-K | |||
| 5/14/20 | 10-Q, 8-K | |||
| 4/17/20 | ||||
| 3/11/20 | ||||
| 2/8/11 | 8-K | |||
| List all Filings | ||||