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Supplemental Financial Information
6 Months Ended
Dec. 31, 2018
Supplemental Financial Information Disclosure [Abstract]  
Supplemental Financial Information

Note 4. Supplemental Financial Information

 

Balance Sheet Components

 

Financing receivables

 

A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset on the Company’s balance sheet. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year and sales-type leases, totaled $4.8 million and $6.9 million at December 31, 2018 and June 30, 2018, respectively, and are included in other assets in the unaudited condensed consolidated balance sheets. The Company evaluates the credit quality of an obligor at lease or contract inception and monitors credit quality over the term of the underlying transactions. The Company performs a credit analysis for all new customers and reviews payment history, current order backlog, financial performance of the customers and other variables that augment or mitigate the inherent credit risk of a transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of non-payment. The Company performed an assessment of the allowance for credit losses related to its financing receivables as of December 31, 2018 and June 30, 2018. Based upon such assessment, the Company recorded $3.3 million and zero adjustment to the allowance for credit losses related to such financing receivables as of December 31, 2018 and as of June 30, 2018, respectively.

A summary of the Company’s financing receivables is presented as follows (in thousands):

 

December 31, 2018

 

Lease

Receivables

 

 

Financed

Service Contracts

and Other

 

 

Total

 

Gross

 

$

 

 

$

12,755

 

 

$

12,755

 

Unearned income

 

 

 

 

 

(990

)

 

 

(990

)

Allowance for credit loss

 

 

 

 

 

(3,327

)

 

 

(3,327

)

Total, net

 

$

 

 

$

8,438

 

 

$

8,438

 

Reported as:

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

 

 

$

3,608

 

 

 

3,608

 

Non-current

 

 

 

 

 

4,830

 

 

 

4,830

 

Total, net

 

$

 

 

$

8,438

 

 

$

8,438

 

 

June 30, 2018

 

Lease

Receivables

 

 

Financed

Service Contracts

and Other

 

 

Total

 

Gross

 

$

1,588

 

 

$

8,009

 

 

$

9,597

 

Unearned income

 

 

(137

)

 

 

 

 

$

(137

)

Allowance for credit loss

 

 

 

 

 

 

 

$

 

Total, net

 

$

1,451

 

 

$

8,009

 

 

$

9,460

 

Reported as:

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

432

 

 

$

2,139

 

 

$

2,571

 

Non-current

 

 

1,019

 

 

 

5,870

 

 

 

6,889

 

Total, net

 

$

1,451

 

 

$

8,009

 

 

$

9,460

 

 

Actual cash collections may differ from the contracted maturities due to early customer buyouts, refinancing, or defaults. In December 2018, one customer bought out the last system that was on lease. As a result, there was no lease receivables as of December 31, 2018.

 

Inventories

Inventories consisted of the following (in thousands):

 

 

 

December 31,

2018

 

 

June 30,

2018

 

Raw materials

 

$

46,748

 

 

$

37,144

 

Work-in-process

 

 

17,114

 

 

 

17,703

 

Finished goods

 

 

55,632

 

 

 

53,693

 

Inventories

 

$

119,494

 

 

$

108,540

 

 

Property and equipment, net

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

 

 

 

December 31,

2018

 

 

June 30,

2018

 

Furniture and fixtures

 

$

2,962

 

 

$

2,927

 

Computer and office equipment

 

 

10,835

 

 

 

11,315

 

Software

 

 

11,089

 

 

 

11,307

 

Leasehold improvements

 

 

25,553

 

 

 

25,423

 

Machinery and equipment

 

 

43,233

 

 

 

47,065

 

Construction in progress

 

 

5,545

 

 

 

5,629

 

 

 

 

99,217

 

 

 

103,666

 

Less: Accumulated depreciation

 

 

(78,114

)

 

 

(79,968

)

Property and equipment, net

 

$

21,103

 

 

$

23,698

 

Depreciation expense related to property and equipment for the three and six months ended December 31, 2018 was $2.0 million and $4.1 million, respectively. Depreciation expense related to property and equipment for the three and six months ended December 31, 2017 was $2.5 million and $4.9 million, respectively.

Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income are excluded from earnings and reported as a component of stockholders’ equity. The foreign currency translation adjustment results from those subsidiaries not using the U.S. Dollar as their functional currency since the majority of their economic activities are primarily denominated in their applicable local currency. Accordingly, all assets and liabilities related to these operations are translated to the U.S. Dollar at the current exchange rates at the end of each period. Revenues and expenses are translated at average exchange rates in effect during the period.

The components of accumulated other comprehensive income in the equity section of the balance sheets are as follows (in thousands):

 

 

 

December 31,

2018

 

 

June 30,

2018

 

Cumulative foreign currency translation adjustment

 

$

903

 

 

$

1,237

 

Defined benefit pension obligation

 

 

(144

)

 

 

(144

)

Accumulated other comprehensive income

 

$

759

 

 

$

1,093