Annual Report for Fiscal Year Ending 06-30, 2026 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management's discussion and analysis of financial condition and results of operations ("MD&A") is intended to help the reader understand our results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes. This MD&A contains forward-looking statements and the matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those projected or implied in the forward-looking statements. Please see "Risk Factors" and "Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

We are a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. We sell our products and provide related services in diversified markets, including homeland security, healthcare, defense and aerospace. We have three operating divisions, each of which is a reportable segment: (a) Security, providing security and inspection systems, high-power RF systems and turnkey security screening solutions; (b) Optoelectronics and Manufacturing, providing specialized electronic components and electronic manufacturing services for applications in the defense and aerospace markets, among others, and for our Security and Healthcare divisions; and (c) Healthcare, providing patient monitoring, cardiology and remote monitoring, and connected care systems and associated accessories.

Security Division. Through our Security division, we provide security screening products, multi-platform software solutions, and services globally, as well as turnkey security screening solutions. These products and services are used to inspect baggage, parcels, cargo, people, vehicles and other objects for weapons, explosives, drugs, radioactive and nuclear materials and other contraband. We also provide high-power RF systems for transmission, surveillance and other applications for defense, research and industrial use. Revenues from our Security division accounted for 70% of our total consolidated revenues for fiscal 2026.

Optoelectronics and Manufacturing Division. Through our Optoelectronics and Manufacturing division, we design, manufacture and market optoelectronic devices and flex circuits and provide electronics manufacturing services globally for use in a broad range of applications, including aerospace and defense electronics, security and inspection systems, medical imaging and diagnostics, telecommunications, office automation, computer peripherals, industrial automation, and consumer products. We also provide our optoelectronic devices and electronics manufacturing services to OEM customers, and our own Security and Healthcare divisions. Revenues from external customers in our Optoelectronics and Manufacturing division accounted for 21% of our total consolidated revenues for fiscal 2026.

Healthcare Division. Through our Healthcare division, we design, manufacture, market and service patient monitoring, cardiology and remote monitoring, and connected care systems globally for sale primarily to hospitals and medical centers. Our products monitor patients in critical, emergency and perioperative care areas of the hospital and provide information, through wired and wireless networks, to physicians and nurses who may be at the patient's bedside, in another area of the hospital or even outside the hospital. Revenues from our Healthcare division accounted for 9% of our total consolidated revenues for fiscal 2026.

Consolidated Results

Discussion and analysis of our financial condition and results of operations for fiscal 2024 (compared with fiscal 2025) have been omitted from this Annual Report on Form 10-K, and is available in Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended June 30, 2025.

Fiscal 2026 Compared with Fiscal 2025. Fiscal 2026 was highlighted by continued revenue and earnings growth, and strong operating cash flow generation. Revenues increased to approximately $1.8 billion, driven by our Security and Optoelectronics divisions, partially offset by lower Healthcare division revenues. Cash generated from operating activities increased significantly to approximately $275.9 million, driven largely by improved working capital, including collections on large Security projects, and higher net income.

Acquisitions. We acquired one business in fiscal 2026 and two businesses in fiscal 2025, as described in Note 2 to the Consolidated Financial Statements. None of these acquisitions were considered significant.

Trends and Uncertainties

The following is a discussion of certain trends and uncertainties that we believe have influenced, and may continue to influence, our results of operations.

Global Economic Considerations. Our products and services are sold in numerous countries worldwide, with a large percentage of our sales generated outside the United States. Therefore, we are exposed to and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. There is uncertainty surrounding macroeconomic factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, interest rate policies, and labor shortages. Increasing diplomatic and trade friction between the U.S. and China has also created significant uncertainty in the global economy. These global macroeconomic factors, coupled with political unrest internationally and the volatile U.S. political climate, have created uncertainty and impacted demand for certain of our products and services. Conflicts in Iran, Gaza and nearby regions have created political and economic uncertainty in the Middle East. Also, the continued conflict between Russia and Ukraine and the sanctions imposed in response to this conflict have increased global economic and political uncertainty. While the impact of these factors remains uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition or results of operations. We do not know how long this uncertainty will continue. These factors could have a material adverse effect on our business, results of operations and financial condition.

Global Trade. The current domestic and international political environment, including in relation to recent and further potential changes by the U.S. and other countries in policies on global trade and tariffs, have resulted in uncertainty surrounding the future state of the global economy and global trade. This uncertainty is exacerbated by sanctions imposed by the U.S. government against certain businesses and individuals in select other countries. Tariffs, trade restrictions and retaliatory measures by such other countries could result in revenue reductions for the Company or cost increases on material used in our products, which could materially and adversely affect our business, financial condition, results of operations and cash flows. Consistent with our strategy, we are taking measures to contain costs to reduce the impact of tariffs. To date, our strategies have helped minimize our exposure to these conditions. Continued or increased uncertainty regarding global trade due to these or other factors may require us to modify our current business practices and could have a material adverse effect on our business, results of operations and financial condition.

Supply and Demand for Memory and Semiconductor Components. We have experienced tighter supply conditions and increased costs for certain memory associated and semiconductor components, reflecting a broader global imbalance between supply and demand for memory used in data center and AI related infrastructure. While we have taken actions to mitigate these impacts, continued constraints in component availability could adversely affect our business.

Geopolitical Environment. The global security environment remains subject to significant uncertainty due to ongoing geopolitical tensions, military conflicts, terrorist threats, and regional instability, including recent hostilities in the Middle East. Governments, transportation authorities, border protection agencies, and critical infrastructure operators continue to assess evolving security risks and may increase investments in security screening, inspection, and detection technologies. As a result, demand for certain of our security inspection products and related services could be affected by changes in government spending priorities and security requirements. At the same time, geopolitical events may influence the timing and execution of customer procurement decisions, funding approvals, contract awards, and project implementations. The extent to which current or future conflicts may affect our business will depend on the duration, geographic scope, and economic consequences of such events, as well as governmental responses that remain difficult to predict.

Conflicts in the Middle East. We generate a significant portion of our revenues from international markets and maintain a global supply chain supporting the design, manufacture, and servicing of our products. Escalation of geopolitical conflicts, including military activity in the Middle East, could disrupt transportation routes, logistics networks, supplier operations, and international trade flows. Such disruptions may result in shipment delays, longer lead times, project schedule delays, inventory management challenges, or higher operating costs. The conflicts in the Middle East had an impact on our operating results in the fourth quarter of fiscal year 2026 through delays in timing of shipments, customer acceptance procedures, project schedules, and new orders. Material future developments could adversely affect our ability to procure components, fulfill customer orders, deploy personnel, or complete installations in a timely manner and could have an adverse effect on our results of operations and financial condition.

Russia-Ukraine Conflict. The invasion of Ukraine by Russia and the sanctions imposed in response to this conflict have increased global economic and political uncertainty. This has the potential to indirectly disrupt our supply chain and access to certain resources. While we have not experienced significant adverse impacts to date resulting from this conflict, we have certain research and

development activities within Ukraine for our Healthcare division which have been somewhat impacted. The conflicts also have increased the threat of malicious cyber-activity from other countries and other actors.

Currency Exchange Rates. On a year-over-year basis, currency exchange rates positively impacted reported sales by approximately 0.6% for the year ended June 30, 2026 compared to the year ended June 30, 2025, primarily due to the weakening of the U.S. dollar against other foreign currencies in fiscal 2026. Any strengthening of the U.S. dollar against foreign currencies would adversely impact our sales in future periods, and any weakening of the U.S. dollar against foreign currencies would positively impact our sales in future periods.

Significant International Security Contracts. During fiscal years 2023 and 2024, our Security division was awarded three significant international contracts valued in aggregate greater than $800 million. During fiscal years 2024, 2025 and 2026, we recognized revenues generated from these contracts of approximately $404 million, $231 million and $79 million, respectively. Further revenues are expected to be recognized in fiscal year 2027 and beyond, albeit at relatively lower amounts as we have fulfilled the majority of equipment deliveries as of the end of fiscal year 2026.

Healthcare Considerations. Certain hospitals are facing significant financial pressure as supply chain constraints and inflation drive up operating costs and higher interest rates make access to credit more expensive. To the extent macroeconomic conditions remain challenging, it is likely that hospitals' spend on capital equipment will be adversely impacted.

Government Policies. Our results of operations and cash flows could be materially affected by changes in U.S. or foreign government legislative, regulatory or enforcement policies, as well as potential or actual U.S. government shutdowns, including the impact on near-term bookings and revenues of the recent Department of Homeland Security shutdown.

Critical Accounting Policies and Estimates

The following discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Our preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. As a result, actual results may differ from such estimates. Our senior management has reviewed these critical accounting policies and estimates and related disclosures with the Audit Committee of our Board of Directors. The following summarizes our critical accounting policies and estimates used in preparing our consolidated financial statements:

Revenue Recognition. We recognize revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligations are broadly categorized as product sales, service revenue, and project-specific contract revenue. Revenue from sales of products is recognized upon shipment or delivery when control of the product transfers to the customer, depending on the terms of each sale, and when collection is probable. Revenue from services includes installation and implementation of products and turnkey security screening services and after-market services. Generally, revenue from services is recognized over time as the services are performed. Sales agreements with customers can be project specific, cover a period of time, and can be renewable periodically. The contracts may contain terms and conditions with respect to payment, delivery, installation, services, warranty and other rights. Contracts with customers may include the sale of products and services.

In certain instances, contracts with customers can contain multiple performance obligations such as civil works to prepare a site for equipment installation, training of customer personnel to operate equipment, and after-market service of equipment. We assign multiple elements in a contract into separate performance obligations if those elements are distinct, both individually and in the context of the contract. If multiple promises comprise a series of distinct services which are substantially the same and have the same pattern of transfer, they are combined and accounted for as a single performance obligation.

Inventory. The majority of our inventories are valued using the average costing method with select subsidiaries using the standard costing method. Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. We write down inventory for slow-moving and obsolete inventory based on historical usage, orders on hand, assessments of future demands, and market

conditions, among other items. If these factors become less favorable than those projected, additional inventory write-downs may be required.

Income Taxes. Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining our tax expense and in evaluating our tax positions including uncertainties. We review our tax positions quarterly and adjust the balances as new information becomes available. We recognize liabilities for uncertain tax positions that reflect our best estimate of the amount ultimately expected to be paid, including, where appropriate, related interest and penalties.

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss and tax credit carryforwards. We evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income inherently rely on estimates. To provide insight, we use our historical experience and our short and long-range business forecasts. We believe it is more likely than not that a portion of the deferred income tax assets may expire unused and therefore have established a valuation allowance against them. Although realization is not assured for the remaining deferred income tax assets, we believe it is more likely than not that the deferred tax assets will be fully recoverable within the applicable statutory expiration periods. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or available tax planning strategies are no longer viable.

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law. Key income-tax related provisions of the OBBBA relevant to our Company include the removal of mandatory capitalization of domestic research and development expenditures, permanent extension of bonus depreciation and revisions to international tax regimes. The Company evaluated the provisions of the legislation and based on the Company's analysis, the OBBBA did not have a material impact on the Company's consolidated financial statements. The Company will continue to monitor any future administrative guidance related to the legislation.

Business Combinations. In connection with the acquisition of a business, we record the fair value of purchase consideration for the tangible and intangible assets acquired, and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, trade names, useful lives and discount rates. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is until we have all the necessary information about the facts and circumstances that existed as of the acquisition date up to one year from the acquisition date, we may record adjustments to the provisional amounts initially recorded for the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Legal and Other Contingencies. We are subject to various claims and legal proceedings. We review the status of each significant legal dispute to which we are a party and assess our potential financial exposure, if any. If the potential financial exposure from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we record a liability and an expense for the estimated loss. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and revise our estimates accordingly. Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position.

Net Revenues

The table below and the discussion that follows are based upon the way we analyze our business. See Note 14 to the consolidated financial statements for additional information about business segments.

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Fiscal 2026 Compared with Fiscal 2025. Revenues for the Security division during the fiscal year ended June 30, 2026 increased by $51.8 million on a year-over-year basis primarily due to an increase in service revenues. The increase in service revenues was due primarily to the increase in the installed base of products of cargo and vehicle inspection systems and aviation and checkpoint inspection systems. Product revenues for fiscal 2026 were comparable to fiscal 2025 as an increase in revenue from RF systems and other security products were offset by a decrease in product revenues from customers in Mexico.

Revenues for the Optoelectronics and Manufacturing division during the fiscal year ended June 30, 2026 increased year-over-year by $26.7 million due to increases in our optoelectronics business and our contract manufacturing business of $8.2 million and $18.5 million, respectively.

Revenues for the Healthcare division during the fiscal year ended June 30, 2026 decreased by $5.6 million year-over-year due primarily to a reduction in patient monitoring sales of $9.6 million, in service revenue of $1.9 million and in supplies and accessories revenue of $1.8 million, partially offset by increases in cardiology sales of $7.7 million.

Gross Profit

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Fiscal 2026 Compared with Fiscal 2025. Gross profit is impacted by sales volume and changes in overall manufacturing-related costs, such as raw materials and component costs, warranty expense, provision for inventory, freight, tariffs, and logistics. Gross profit increased approximately $5.9 million in fiscal 2026 as compared to the prior year on a 4.3% increase in net revenue. The gross margin in fiscal year 2026 was lower than the prior year due to the sales mix in the Security division arising from an unfavorable shift in revenue mix. Revenue from Security division customers in Mexico, which generated margins above the division average, declined by $148.8 million year-over-year, while revenue increased in businesses that generally carried lower margins. Gross margin was also adversely affected by lower margins in aviation and checkpoint inspection systems. These impacts were partially offset by higher revenue and improved profitability from RF systems.

Operating Expenses

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Selling, General and Administrative

Our significant selling, general and administrative ("SG&A") expenses include employee compensation, sales commissions, travel, professional services, marketing expenses, and depreciation and amortization expense.

Fiscal 2026 Compared with Fiscal 2025. SG&A expense for the fiscal year ended June 30, 2026 decreased $12.5 million compared to the same prior-year period, primarily due to a favorable impact from foreign currency exchange rates and decreased employee compensation, including reduced stock-based compensation expense related to the retirement of our former CEO in fiscal year 2025, partially offset by higher bad debt expense compared to the same prior-year period.

Research and Development

Our Security and Healthcare divisions have historically invested substantial amounts in research and development ("R&D"). We intend to continue this trend in future years, although specific programs may or may not continue to be funded and funding levels may fluctuate. R&D expenses included research related to new product development and product enhancement expenditures.

Fiscal 2026 Compared with Fiscal 2025. R&D expense during the fiscal year ended June 30, 2026 was $5.7 million higher than in the same prior-year period, driven primarily by increased compensation costs to support new product development initiatives primarily in our Security division and Healthcare division.

Impairment, restructuring and other charges

Impairment, restructuring and other charges generally consist of charges relating to reductions in our workforce, facilities consolidation, impairment of assets, costs related to acquisition activity, legal charges and other non-recurring charges. We have undertaken certain restructuring activities in an effort to align our global capacity and infrastructure with demand by our customers and fully integrate acquisitions, thereby improving our operational efficiency. Our efforts have helped enhance our ability to improve operating margins, retain and expand existing relationships with customers and attract new business. We may utilize similar measures in the future to realign our operations to further increase our operating efficiencies. The effect of these efforts may materially affect our future operating results.

Fiscal 2026 Compared with Fiscal 2025. During the fiscal year ended June 30, 2026, impairment, restructuring and other charges were $16.6 million and consisted of $5.1 million for employee terminations, $2.1 million in acquisition related costs, $1.2 million for impairment of assets, $0.2 million for facility closure costs for operational efficiency activities, $1.6 million in legal charges, $2.2 million for non-recurring charges in our Security division, and $4.2 million for non-recurring charges in our Healthcare division. During the fiscal year ended June 30, 2025, impairment, restructuring and other charges were $5.3 million and consisted of $0.7 million for facility closure costs for operational efficiency activities, $2.7 million for employee terminations, $0.6 million in acquisition related costs, and $1.3 million in legal charges.

Interest and Other Expense, Net

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Fiscal 2026 Compared with Fiscal 2025. For the fiscal year ended June 30, 2026, interest and other expense, net was $26.2 million as compared to $31.4 million in the prior fiscal year. The decrease in interest and other expense, net was a result of a decrease in interest expense from lower average interest rates on our borrowings due to issuance of convertible notes and concurrent paydown of our revolving credit facility, and higher interest income on increased levels of cash in fiscal 2026 compared to the same prior year period. These favorable impacts were partially offset by an increase in other expense in fiscal 2026 of $4.4 million for prior service cost amortization due to a pension plan amendment in December 2025 for our former CEO and a $1.3 million reduction in benefit from the interest rate swap in fiscal 2026 compared to the prior year.

Provision for Income Taxes

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The effective tax rate for a particular period varies depending on a number of factors including (i) the mix of income earned in various tax jurisdictions, each of which applies a unique range of income tax rates and income tax credits, (ii) changes in previously established valuation allowances for deferred tax assets (changes are based upon our current analysis of the likelihood that these deferred tax assets will be realized), (iii) the level of non-deductible expenses, (iv) certain tax elections, (v) tax holidays granted to certain of our international subsidiaries, (vi) return to provision adjustments and (vii) changes in tax legislation.

Fiscal 2026 Compared with Fiscal 2025. For the fiscal years ended June 30, 2026 and 2025, we recorded a provision for income taxes of $38.0 million and $36.5 million, respectively. The effective tax rate for the fiscal years ended June 30, 2026 and 2025 was 19.7% and 19.6%, respectively. During the fiscal years ended June 30, 2026 and 2025, we recognized a net discrete tax benefit of $5.8 million and $6.7 million, respectively. The net discrete benefit recorded in the fiscal year ended June 30, 2026 is primarily related to equity-based compensation under ASU 2016-09, changes to prior year estimates, and changes in uncertain tax positions. The net discrete benefit recorded in the fiscal year ended June 30, 2025 is primarily related to equity-based compensation under ASU 2016-09, favorable resolution to a foreign tax dispute, and changes in uncertain tax positions.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents, cash generated from operations, existing cash borrowing arrangements and access to capital markets. Cash and cash equivalents totaled $359.8 million at June 30, 2026, compared to $106.4 million at June 30, 2025. During fiscal 2026, we generated positive cash flow from operating activities and issued senior convertible notes which were primarily used to repay borrowings on our credit facility, repurchase shares of common stock, fund investing activities and pay taxes related to net share settlements of equity awards as discussed further below. If we continue to net settle equity awards, we will continue to use additional cash to pay our tax withholding obligations in connection with such settlements. We currently anticipate that our available funds, credit facilities and cash flow from operations will be sufficient to meet our operational cash needs for the next 12 months and foreseeable future. In addition, we anticipate that cash generated from operations, without repatriating earnings from our non-U.S. subsidiaries, and our credit facilities will be sufficient to satisfy our obligations in the U.S.

In July 2025 we amended and extended our credit facility to mature in July 2030, to increase the revolving limit from $600 million to $725 million and replaced the $128.1 million term loan with a new $100.0 million term loan. The sub-limit for letters of credit was increased from $300 million to $350 million, which includes up to $300 million for borrowings in certain foreign currencies. As of June 30, 2026, there were no borrowings under the revolving credit facility, $95.8 million outstanding under the letters of credit sub-facility, and $92.5 million outstanding under the term loan. As of June 30, 2026, the amount available to borrow under the credit facility was $629.2 million. See Note 8 to the consolidated financial statements for further discussion.

Cash Provided by Operating Activities. Cash flows from operating activities can fluctuate significantly from period to period due to changes in net income, adjusted for non-cash items, and working capital. During fiscal 2026, cash provided by operations was $275.9 million compared to cash provided by operations of $97.6 million in the prior fiscal year. The net increase in cash flows from operating activities was due primarily to favorable changes in net working capital, largely from lower accounts receivable, an increase in deferred revenue and other liabilities, as well as higher net income compared to the same prior-year period. These favorable changes were partially offset by unfavorable fluctuations in accounts payable, advances from customers, inventory and prepaid expenses and other assets.

Cash Used in Investing Activities. Net cash used in investing activities was $68.3 million during fiscal 2026 as compared to $117.9 million used during the prior year. The decrease in cash used in investing activities was primarily due to lower cash paid for the acquisition of businesses, which was $26.3 million during fiscal 2026 compared to $76.7 million in the prior fiscal year. This favorable impact was partially offset by increased capital expenditures of $30.6 million in fiscal 2026 compared to $23.8 million in the prior fiscal year. In addition, we received proceeds from the sale of property and equipment of $6.5 million in fiscal 2026 compared to $0.3 million in the same prior-year period.

Cash Provided by Financing Activities. Net cash provided by financing activities was $46.7 million during fiscal 2026, compared to $30.8 million during the prior fiscal year. The increase in cash flows from financing activities was primarily due to net proceeds of $562.9 million from issuance of the 2031 Notes, partially offset by (1) net repayment of $178.0 million on our revolving credit facility and (2) the repurchase of common shares of $271.9 million. This is compared to net proceeds in fiscal 2025 of $340.6 million from issuance of the 2029 Notes, partially offset by (1) net repayment of $228.0 million on our revolving credit facility and (2) repurchases of common shares for an aggregate of $80.4 million in the same prior-year period. In connection with the July 2025 amendment and extension of our revolving credit facility, we replaced the $128.1 million term loan with a new $100.0 million term

loan. Taxes paid related to net share settlement of equity awards were $36.3 million during fiscal 2026 compared to $22.6 million in the same prior-year period.

Material Cash Requirements

Our material cash requirements include the following contractual and other obligations.

Borrowings. Outstanding debt totaled $1,001.0 million at June 30, 2026, an increase of $351.4 million from $649.6 million at June 30, 2025. This increase was due primarily to proceeds from the 2031 Notes, partially offset by repayment of outstanding revolver borrowings and net reduction in the term loan associated with our credit facility. Contractual debt maturities of $2.5 million will be payable within the next 12 months. As of June 30, 2026, we were in compliance with all financial covenants under our various borrowing agreements. See Note 8 to the consolidated financial statements for further discussion, including future contractual maturities and potential cash settlement upon conversion or redemption of the 2029 Notes and 2031 Notes. We anticipate that cash generated from our operations, existing cash borrowing arrangements and future access to capital markets should be sufficient to meet our cash requirements for at least the next 12 months. However, our future capital requirements will depend on many factors, including future business acquisitions, capital expenditures, litigation, stock repurchases and levels of research and development spending, among other factors. The adequacy of available funds will depend on many factors, including the success of our businesses in generating cash, continued compliance with financial covenants contained in our credit facility and the health of capital markets in general, among other factors.

Leases. We have lease arrangements for certain facilities and equipment under various operating lease agreements. As of June 30, 2026, we had lease payment obligations of $48.8 million, with $13.1 million payable within the next 12 months.

Cash Held by Foreign Subsidiaries

Our cash and cash equivalents totaled $359.8 million at June 30, 2026. Of this amount, approximately 23% was held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were held primarily by our subsidiaries in India, United Kingdom, Singapore, Canada, and Malaysia. We intend to permanently reinvest certain earnings from foreign operations, and we currently do not anticipate that we will need this cash in foreign countries to fund our U.S. operations. In the event we repatriate cash from certain foreign operations and if taxes have not previously been withheld on the related earnings, we would provide for withholding taxes at the time we change our intention with regard to the reinvestment of those earnings.

Stock Repurchase Program

In September 2022, our Board of Directors increased to a total of 2,000,000 shares the maximum number of shares authorized under the stock repurchase program. This program does not expire unless our Board of Directors acts to terminate the program. During fiscal 2026, we repurchased 1,111,825 shares of our common stock. As of June 30, 2026, 78,731 shares remained available for repurchase.

On August 20, 2026, we announced that our Board of Directors has approved an additional 1,000,000 shares for repurchase under our stock repurchase program, increasing the total remaining authorization to 1,078,731 shares.

The timing and actual numbers of shares purchased depends on a variety of factors, including stock price, general business and market conditions and other investment opportunities. Repurchases may be made from time to time under the program through open-market purchases or privately-negotiated transactions at our discretion. Upon repurchase, the shares are restored to the status of authorized but unissued shares, and we record them as a reduction in the number of shares of common stock issued and outstanding in our consolidated financial statements.

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