Note 4 - Supplementary Financial Statements Information

A. Cash and cash equivalents

The Company’s cash and cash equivalent balance at June 30, 2023 and December 31, 2022 is denominated in the following currencies:

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)
US Dollars		226,172		139,644
New Israeli Shekels		4,416		4,008
Other currencies		2,199		4,504

		232,787		148,156

Short-term deposits are bank deposits in US Dollars with terms at the investment date of 3-12 months with average annual interest rates of 5.05%.

B. Inventories

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)
Components		34,158		43,017
Work in process		15,444		13,951
Finished products (including systems at customer locations not yet sold)		18,730		13,930

		68,332		70,898

Inventories are presented in:

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)
Current assets		61,207		65,541
Long-term assets		7,125		5,357

		68,332		70,898

C. Other Current Assets

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)

Interest receivable		7,048		3,979
Prepaid expenses		4,315		3,832
Due from Government institutions		2,875		2,598
Other		760		747

		14,998		11,156

D. Property, Plant and Equipment, Net

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)
Land		863		863
Building		20,345		18,490
Machinery and equipment		22,590		19,121
Office furniture and equipment		997		934
Computer equipment and software		6,218		6,256
Automobiles		396		396
Leasehold improvements		2,080		1,894
Right of use assets		5,845		6,087
		59,334		54,041

Less accumulated depreciation		22,203		20,900

		37,131		33,141

E. Intangible Assets, Net

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)
Patent registration costs		2,195		2,135

Accumulated amortization and impairment		1,593		1,538

Total intangible assets, net		602		597

F. Other Current Liabilities

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)

Commissions		18,789		18,048
Advances from customers and deferred revenues		7,199		12,825
Accrued employee compensation and related benefits		10,506		11,941
Accrued warranty costs (1)		3,041		3,161
Government institutions and income tax payable		2,844		7,991
Accrued expenses		1,884		1,570
Operating lease obligations		1,266		1,297

		45,529		56,833

(1) Changes in the accrued warranty costs are as follows:

	June 30,			December 31,
	2023			2022
	U.S. Dollars (in thousands)

Beginning of year		3,161			3,265
Accruals		2,721			5,823
Usage		(2,841	)		(5,927	)

Balance at end of year		3,041			3,161

G. Convertible Notes

The Convertible Senior Notes consisted of the following:

	June 30,		December 31,
	2023		2022
	U.S. Dollars (in thousands)
Liability:
Principle:		200,000		200,000
Unamortized issuance costs		3,716		4,263
Net carrying amount		196,284		195,737

As of June 30, 2023, the debt issuance costs of the Notes will be amortized over the remaining term of approximately 3.5 years.

The annual effective interest rate of the Notes is 0.56%. In the six-months ended June 30, 2023, $547 was recorded as amortization of debt issuance costs (In the year ended December 31, 2022 - $1,094).

As of June 30, 2023, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $179,154 (December 31, 2022 - $152,565). The estimated fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period.

As of June 30, 2023, the principal amount exceeded the if-converted value of the Notes by $20,846 (December 31, 2022, the principal amount exceeded the if-converted value of the Notes by $47,435).