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 $4.2 million and $6.9 million at September 30, 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. As of September 30, 2018, the sales-type lease portion of the financing receivables was rated at a moderate risk. The Company performed an assessment of the allowance for credit losses related to its financing receivables as of September 30, 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 September 30, 2018 and as of June 30, 2018, respectively.

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

September 30, 2018	Lease Receivables			Financed Service Contracts and Other			Total
Gross	$	1,472		$	13,841		$	15,313
Unearned income		(113	)		(1,036	)		(1,149	)
Allowance for credit loss		—			(3,327	)		(3,327	)
Total, net	$	1,359		$	9,478		$	10,837
Reported as:
Current	$	444		$	6,204			6,648
Non-current		915			3,274			4,189
Total, net	$	1,359		$	9,478		$	10,837

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. Future minimum lease payments to be received as of September 30, 2018 are presented as follows (in thousands):

Year Ending June 30,	Amount
2019 (remaining 9 months)	$	387
2020		465
2021		465
2022		155
Total	$	1,472

Inventories

Inventories consisted of the following (in thousands):

	September 30, 2018		June 30, 2018
Raw materials	$	44,417	$	37,144
Work-in-process		17,189		17,703
Finished goods		56,078		53,693
Inventories	$	117,684	$	108,540

Property and equipment, net

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

	September 30, 2018			June 30, 2018
Furniture and fixtures	$	2,910		$	2,927
Computer and office equipment		10,789			11,315
Software		10,840			11,307
Leasehold improvements		25,742			25,423
Machinery and equipment		42,736			47,065
Construction in progress		6,433			5,629
		99,450			103,666
Less: Accumulated depreciation		(76,324	)		(79,968	)
Property and equipment, net	$	23,126		$	23,698

Depreciation expense related to property and equipment for the three months ended September 30, 2018 and 2017 was $2.1 million and $2.5 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):

	September 30, 2018			June 30, 2018
Cumulative foreign currency translation adjustment	$	842		$	1,237
Defined benefit pension obligation		(144	)		(144	)
Accumulated other comprehensive income	$	698		$	1,093