OSI SYSTEMS INC 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ OSI SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (amounts in thousands, except share amounts and par value) ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 March 31, 2022 ASSETS ​ ​ ​ ​ ​ ​ CURRENT ASSETS: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 80,613 ​ $ 83,279 Accounts receivable, net ​ 290,653 ​ 282,872 Inventories ​ 294,208 ​ 344,643 Prepaid expenses and other current assets ​ 43,930 ​ 47,742 Total current assets ​ 709,404 ​ 758,536 Property and equipment, net ​ 118,004 ​ 112,755 Goodwill ​ 320,304 ​ 336,655 Intangible assets, net ​ 127,608 ​ 139,781 Other assets ​ 109,047 ​ 111,364 Total assets ​ $ 1,384,367 ​ $ 1,459,091 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ ​ Bank lines of credit ​ $ — ​ $ 73,000 Current portion of long-term debt ​ 846 ​ 249,315 Accounts payable ​ 141,263 ​ 129,812 Accrued payroll and related expenses ​ 50,816 ​ 40,469 Advances from customers ​ 38,463 ​ 45,914 Other accrued expenses and current liabilities ​ 113,379 ​ 107,326 Total current liabilities ​ 344,767 ​ 645,836 Long-term debt ​ 276,421 ​ 48,708 Deferred income taxes ​ 7,157 ​ 4,658 Other long-term liabilities ​ 116,202 ​ 141,395 Total liabilities ​ 744,547 ​ 840,597 Commitments and contingencies (Note 10) ​ ​ ​ ​ ​ ​ STOCKHOLDERS’ EQUITY: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.001 par value— 10,000,000 shares authorized; no shares issued or outstanding ​ — ​ — Common stock, $ 0.001 par value— 100,000,000 shares authorized; issued and outstanding , 17,854,110 shares at June 30, 2021 and 17,043,853 shares at March 31, 2022 ​ 105,724 ​ 17 Retained earnings ​ 548,842 ​ 637,734 Accumulated other comprehensive loss ​ ( 14,746 ) ​ ( 19,257 ) Total stockholders’ equity ​ 639,820 ​ 618,494 Total liabilities and stockholders’ equity ​ $ 1,384,367 ​ $ 1,459,091 ​ See accompanying notes to condensed consolidated financial statements. ​ 3 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (amounts in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Nine Months Ended March 31, ​ 2021 2022 2021 2022 Net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ $ 217,124 ​ $ 221,857 ​ $ 608,238 ​ $ 634,446 Services ​ 66,663 ​ 68,620 ​ 206,466 ​ 211,969 Total net revenues ​ 283,787 ​ 290,477 ​ 814,704 ​ 846,415 Cost of goods sold: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ 144,958 ​ 150,311 ​ 409,692 ​ 432,277 Services ​ 34,810 ​ 37,308 ​ 103,161 ​ 112,177 Total cost of goods sold ​ 179,768 ​ 187,619 ​ 512,853 ​ 544,454 Gross profit ​ 104,019 ​ 102,858 ​ 301,851 ​ 301,961 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 57,906 ​ 57,813 ​ 172,624 ​ 170,015 Research and development ​ 13,932 ​ 15,150 ​ 39,798 ​ 44,944 Impairment, restructuring and other charges (benefit), net ​ ( 285 ) ​ 1,469 ​ 7,912 ​ 4,810 Total operating expenses ​ 71,553 ​ 74,432 ​ 220,334 ​ 219,769 Income from operations ​ 32,466 ​ 28,426 ​ 81,517 ​ 82,192 Interest and other expense, net ​ ( 4,167 ) ​ ( 2,301 ) ​ ( 12,589 ) ​ ( 6,534 ) Other income, net ​ ​ — ​ ​ 27,373 ​ ​ — ​ ​ 27,373 Income before income taxes ​ 28,299 ​ 53,498 ​ 68,928 ​ 103,031 Provision for income taxes ​ ( 9,526 ) ​ ( 10,763 ) ​ ( 20,773 ) ​ ( 21,447 ) Net income ​ $ 18,773 ​ $ 42,735 ​ $ 48,155 ​ $ 81,584 Earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 1.04 ​ $ 2.45 ​ $ 2.68 ​ $ 4.60 Diluted ​ $ 1.03 ​ $ 2.41 ​ $ 2.63 ​ $ 4.52 Shares used in per share calculation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 17,969 ​ 17,417 ​ 17,981 ​ 17,734 Diluted ​ 18,298 ​ 17,709 ​ 18,278 ​ 18,036 ​ See accompanying notes to condensed consolidated financial statements. ​ 4 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED ) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Nine Months Ended March 31, ​ 2021 2022 2021 2022 Net income ​ $ 18,773 ​ $ 42,735 ​ $ 48,155 ​ $ 81,584 Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustment ​ ​ ( 503 ) ​ ​ ( 1,981 ) ​ 7,219 ​ ( 4,907 ) Other ​ ​ 59 ​ ​ 132 ​ ​ 176 ​ ​ 396 Other comprehensive income (loss) ​ ​ ( 444 ) ​ ​ ( 1,849 ) ​ ​ 7,395 ​ ​ ( 4,511 ) Comprehensive income ​ $ 18,329 ​ $ 40,886 ​ $ 55,550 ​ $ 77,073 ​ See accompanying notes to condensed consolidated financial statements. ​ 5 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (amounts in thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ Other ​ ​ ​ ​ Number of ​ ​ Retained Comprehensive ​ ​ ​ Shares Amount Earnings Loss Total Balance—December 31, 2020 17,933,256 ​ $ 100,816 ​ $ 504,175 ​ $ ( 17,355 ) ​ $ 587,636 Exercise of stock options 9,703 ​ ​ 624 ​ ​ — ​ ​ — ​ ​ 624 Vesting of RSUs 6,519 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Shares issued under employee stock purchase program 35,539 ​ ​ 2,193 ​ ​ — ​ ​ — ​ ​ 2,193 Stock-based compensation expense — ​ ​ 7,565 ​ ​ — ​ ​ — ​ ​ 7,565 Repurchase of common stock ​ ( 2,452 ) ​ ​ ( 235 ) ​ ​ — ​ ​ — ​ ​ ( 235 ) Taxes paid related to net share settlement of equity awards ( 2,358 ) ​ ​ ( 219 ) ​ ​ — ​ ​ — ​ ​ ( 219 ) Net income — ​ ​ — ​ ​ 18,773 ​ ​ — ​ ​ 18,773 Other comprehensive loss — ​ ​ — ​ ​ — ​ ​ ( 444 ) ​ ​ ( 444 ) Balance—March 31, 2021 ​ 17,980,207 ​ $ 110,744 ​ $ 522,948 ​ $ ( 17,799 ) ​ $ 615,893 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ Other ​ ​ ​ ​ Number of ​ ​ Retained Comprehensive ​ ​ ​ Shares Amount Earnings Loss Total Balance—December 31, 2021 ​ 17,643,903 ​ $ 30,909 ​ $ 606,647 ​ $ ( 17,408 ) ​ $ 620,148 Vesting of RSUs ​ 6,027 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Shares issued under employee stock purchase program ​ 32,105 ​ ​ 2,307 ​ ​ — ​ ​ — ​ ​ 2,307 Stock-based compensation expense ​ — ​ ​ 6,898 ​ ​ — ​ ​ — ​ ​ 6,898 Repurchase of common stock ​ ( 635,962 ) ​ ​ ( 39,904 ) ​ ​ ( 11,648 ) ​ ​ — ​ ​ ( 51,552 ) Taxes paid related to net share settlement of equity awards ​ ( 2,220 ) ​ ​ ( 193 ) ​ ​ — ​ ​ — ​ ​ ( 193 ) Net income ​ — ​ ​ — ​ ​ 42,735 ​ ​ — ​ ​ 42,735 Other comprehensive loss ​ — ​ ​ — ​ ​ — ​ ​ ( 1,849 ) ​ ​ ( 1,849 ) Balance—March 31, 2022 17,043,853 ​ $ 17 ​ $ 637,734 ​ $ ( 19,257 ) ​ $ 618,494 ​ ​ 6 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ Other ​ ​ ​ ​ Number of ​ ​ Retained Comprehensive ​ ​ ​ Shares Amount Earnings Loss Total Balance—June 30, 2020 18,011,982 ​ $ 122,553 ​ $ 474,793 ​ $ ( 25,194 ) ​ $ 572,152 Exercise of stock options 87,235 ​ 1,187 ​ — ​ — ​ 1,187 Vesting of RSUs 310,939 ​ — ​ — ​ — ​ — Shares issued under employee stock purchase program 68,180 ​ 4,215 ​ — ​ — ​ 4,215 Stock-based compensation expense — ​ 19,386 ​ — ​ — ​ 19,386 Repurchase of common stock ​ ( 322,588 ) ​ ​ ( 25,051 ) ​ ​ — ​ ​ — ​ ​ ( 25,051 ) Taxes paid related to net share settlement of equity awards ( 175,541 ) ​ ( 11,546 ) ​ — ​ — ​ ( 11,546 ) Net income — ​ — ​ 48,155 ​ — ​ 48,155 Other comprehensive income — ​ — ​ — ​ 7,395 ​ 7,395 Balance—March 31, 2021 ​ 17,980,207 ​ $ 110,744 ​ $ 522,948 ​ $ ( 17,799 ) ​ $ 615,893 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ Other ​ ​ ​ ​ Number of ​ ​ Retained Comprehensive ​ ​ ​ Shares Amount Earnings Loss Total Balance—June 30, 2021 17,854,110 ​ $ 105,724 ​ $ 548,842 ​ $ ( 14,746 ) ​ $ 639,820 Exercise of stock options 164,612 ​ ​ 311 ​ ​ — ​ ​ — ​ ​ 311 Vesting of RSUs 335,099 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Shares issued under employee stock purchase program 60,065 ​ ​ 4,297 ​ ​ — ​ ​ — ​ ​ 4,297 Stock-based compensation expense — ​ ​ 20,986 ​ ​ — ​ ​ — ​ ​ 20,986 Repurchase of common stock ​ ( 1,117,258 ) ​ ​ ( 85,184 ) ​ ​ ( 11,648 ) ​ ​ — ​ ​ ( 96,832 ) Taxes paid related to net share settlement of equity awards ( 252,775 ) ​ ​ ( 19,354 ) ​ ​ — ​ ​ — ​ ​ ( 19,354 ) Adoption of ASU 2020-06 for convertible notes ​ — ​ ​ ( 26,763 ) ​ ​ 18,956 ​ ​ — ​ ​ ( 7,807 ) Net income — ​ ​ — ​ ​ 81,584 ​ ​ — ​ ​ 81,584 Other comprehensive loss — ​ ​ — ​ ​ — ​ ​ ( 4,511 ) ​ ​ ( 4,511 ) Balance—March 31, 2022 ​ 17,043,853 ​ $ 17 ​ $ 637,734 ​ $ ( 19,257 ) ​ $ 618,494 ​ ​ ​ ​ 7 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, ​ 2021 2022 CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ Net income ​ $ 48,155 ​ $ 81,584 Adjustments to reconcile net income to net cash provided by operating activities, net of effects from acquisitions: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 31,433 ​ 28,980 Stock-based compensation expense ​ 19,386 ​ 20,986 Provision for (recovery of) losses on accounts receivable ​ ​ 6,176 ​ ​ ( 3,836 ) Deferred income taxes ​ ​ ( 1,364 ) ​ 1,448 Amortization of debt discount and issuance costs ​ 7,277 ​ ​ 1,045 Impairment charges ​ ​ 552 ​ ​ — Gain on sale of property and equipment ​ ​ — ​ ​ ( 27,373 ) Other ​ ( 217 ) ​ ( 1,074 ) Changes in operating assets and liabilities—net of business acquisitions: ​ ​ ​ ​ ​ ​ Accounts receivable ​ 6,714 ​ 10,613 Inventories ​ ( 43,162 ) ​ ( 53,766 ) Prepaid expenses and other assets ​ ( 4,263 ) ​ 8,010 Accounts payable ​ 37,113 ​ ( 11,000 ) Accrued payroll and related expenses ​ ​ 363 ​ ​ ( 9,837 ) Advances from customers ​ 19,468 ​ 7,523 Other ​ 3,422 ​ ( 11,490 ) Net cash provided by operating activities ​ 131,053 ​ 41,813 CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ( 12,149 ) ​ ( 10,293 ) Proceeds from sale of property and equipment ​ ​ 994 ​ ​ 32,304 Purchases of certificates of deposit ​ ​ ( 4,820 ) ​ ​ ( 2,201 ) Proceeds from certificates of deposit ​ ​ 2,690 ​ ​ 55 Acquisition of businesses, net of cash acquired ​ ( 3,000 ) ​ ( 14,132 ) Payments for intangible and other assets ​ ( 9,878 ) ​ ( 12,320 ) Net cash used in investing activities ​ ( 26,163 ) ​ ( 6,587 ) CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ Net borrowings (repayments) on bank lines of credit ​ ( 59,000 ) ​ 73,000 Proceeds from long-term debt ​ 413 ​ 50,285 Payments on long-term debt ​ ( 778 ) ​ ( 40,893 ) Proceeds from exercise of stock options and employee stock purchase plan ​ 5,402 ​ 4,608 Payments of contingent consideration ​ ​ ( 854 ) ​ ​ ( 1,671 ) Repurchases of common stock ​ ( 25,051 ) ​ ( 96,832 ) Taxes paid related to net share settlement of equity awards ​ ( 11,546 ) ​ ( 19,354 ) Net cash used in financing activities ​ ( 91,414 ) ​ ( 30,857 ) Effect of exchange rate changes on cash ​ 2,887 ​ ( 1,703 ) Net change in cash and cash equivalents ​ 16,363 ​ 2,666 Cash and cash equivalents—beginning of period ​ 76,102 ​ 80,613 Cash and cash equivalents—end of period ​ $ 92,465 ​ $ 83,279 Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ Cash paid, net during the period for: ​ ​ ​ ​ ​ ​ Interest ​ $ 5,721 ​ $ 5,851 Income taxes ​ $ 8,074 ​ $ 9,964 ​ See accompanying notes to condensed consolidated financial statements. ​ 8 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 1. Basis of Presentation ​ The condensed consolidated financial statements include the accounts of OSI Systems, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded in accordance with SEC rules and regulations and GAAP applicable to interim unaudited financial statements. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for audited annual financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 filed with the SEC. The results of operations for the three and nine months ended March 31, 2022 are not necessarily indicative of the operating results to be expected for the full 2022 fiscal year or any future periods. ​ Use of Estimates ​ The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for our company relate to contract revenue, fair values of assets acquired and liabilities assumed in business combinations, values for inventories reported at lower of cost or net realizable value, stock-based compensation expense, income taxes, accrued warranty costs, legal contingencies and recoveries, and the recoverability, useful lives and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill. Changes in estimates are reflected in the periods during which they become known. Due to the inherent uncertainty involved in making estimates, our actual amounts reported in future periods could differ materially from these estimates. ​ Earnings Per Share Computations ​ We compute basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. We compute diluted earnings per share by dividing net income available to common stockholders by the sum of the weighted average number of common shares and dilutive potential common shares outstanding during the period. Potential common shares consist of the shares issuable upon the exercise of stock options and restricted stock unit awards under the treasury stock method. The underlying equity component of the 1.25 % convertible senior notes due 2022 (the “Notes”) discussed in Note 8 to the condensed consolidated financial statements will have a net impact on diluted earnings per share when the average price of our common stock exceeds the conversion price of $ 107.46 because the principal amount of the Notes is intended to be settled in cash upon conversion. There was no dilutive effect of the Notes for the three and nine months ended March 31, 2021 and 2022. ​ 9 Table of Contents The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Nine Months Ended March 31, ​ 2021 2022 2021 2022 Net income available to common stockholders ​ $ 18,773 ​ $ 42,735 ​ $ 48,155 ​ $ 81,584 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding—basic ​ ​ 17,969 ​ ​ 17,417 ​ 17,981 ​ 17,734 Dilutive effect of equity awards ​ ​ 329 ​ ​ 292 ​ 297 ​ 302 Weighted average shares outstanding—diluted ​ ​ 18,298 ​ ​ 17,709 ​ 18,278 ​ 18,036 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ 1.04 ​ $ 2.45 ​ $ 2.68 ​ $ 4.60 Diluted earnings per share ​ $ 1.03 ​ $ 2.41 ​ $ 2.63 ​ $ 4.52 Shares excluded from diluted earnings per share due to their anti-dilutive effect ​ ​ 51 ​ ​ 211 ​ ​ 64 ​ ​ 62 ​ Cash and Cash Equivalents ​ We consider all highly liquid investments with maturities of three months or less as of the acquisition date to be cash equivalents. ​ Our cash and cash equivalents totaled $ 83.3 million at March 31, 2022. Of this amount, approximately 79 % was held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were held primarily by our subsidiaries in the United Kingdom, Singapore, India, Malaysia, and Canada, and to a lesser extent in Australia, Albania, Indonesia and Mexico among other countries. We have cash holdings in financial institutions that exceed insured limits for such financial institutions; however, we mitigate this risk by utilizing international financial institutions of high credit quality. ​ Fair Value of Financial Instruments ​ Our financial instruments consist primarily of cash and cash equivalents, insurance company contracts, accounts receivable, accounts payable, debt instruments and foreign currency forward contracts. The carrying values of financial instruments, other than long term debt instruments, are representative of their fair values due to their short-term maturities. The carrying values of our long-term debt instruments are considered to approximate their fair values because the interest rates of these instruments are variable or comparable to current rates for financing available to us. The fair values of our foreign currency forward contracts were not significant as of June 30, 2021 and March 31, 2022. ​ Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Level 1 category includes assets and liabilities measured at quoted prices in active markets for identical assets and liabilities. The Level 2 category includes assets and liabilities measured from observable inputs other than quoted market prices. The Level 3 category includes assets and liabilities for which valuation inputs are unobservable and significant to the fair value measurement. Our contingent payment obligations related to acquisitions, which are further discussed in Note 10 to the condensed consolidated financial statements, are in the Level 3 category for valuation purposes. ​ The fair values of our financial assets and liabilities are categorized as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 March 31, 2022 ​ Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets—Insurance company contracts ​ $ — ​ $ 47,113 ​ $ — ​ $ 47,113 ​ $ — ​ $ 47,162 ​ $ — ​ $ 47,162 Liabilities—Contingent consideration ​ $ — ​ $ — ​ $ 19,431 ​ $ 19,431 ​ $ — ​ $ — ​ $ 28,266 ​ $ 28,266 ​ Derivative Instruments and Hedging Activity ​ Our use of derivatives consists of foreign currency forward contracts. These forward contracts are utilized to partially mitigate certain balance sheet exposures or used as a net investment hedge to protect against potential changes resulting from short-term foreign currency fluctuations. These contracts have original maturities of up to three months. We do not use hedging instruments for speculative purposes. ​ 10 Table of Contents The net investment hedge has been designated as a hedge instrument and accounted for under Accounting Standards Codification (“ASC”) 815 Derivatives and Hedging . Hedge effectiveness is assessed using the spot method, consistent with guidance in ASC 815 whereby the change in fair value of the forward contract is recorded in the same manner as the related currency translation adjustments, within other comprehensive income, as the hedging instrument is expected to be fully effective unless the amount hedged exceeds the net investment in the foreign operation, or the foreign operation is liquidated. There were no net investment hedges outstanding as of June 30, 2021 and March 31, 2022. ​ The net gains or losses from our foreign currency forward contracts, which are not designated as hedge instruments, are reported in the consolidated income statement. The amounts reported in the consolidated income statement for the three and nine months ended March 31, 2021 and 2022 were not significant. The fair value of our forward foreign exchange contracts is estimated using a standard valuation model and market-based observable inputs over the contractual term. Unrealized gains are recognized as assets and unrealized losses are recognized as liabilities. As of June 30, 2021 and March 31, 2022, we held foreign currency forward contracts with notional amounts totaling $ 26.1 million and $ 21.0 million, respectively. Unrealized gains and losses from our forward currency forward contracts as of March 31, 2021 and 2022 were not significant. Recently Adopted Accounting Pronouncements Convertible Debt ​ In August 2020, the FASB issued Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments typically will be closer to the coupon interest rate. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. We early adopted the new guidance on July 1, 2021 using the modified retrospective approach and recorded a $ 19 million increase to retained earnings and a reduction of $ 27 million in common stock as if there had been no equity component. Additionally, we recorded an increase to the convertible notes balance of $ 10 million. Interest expense recognized subsequent to adoption on July 1, 2021 is reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. Income Taxes ​ In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles of ASC 740 and is intended to improve consistency and simplify GAAP in several other areas of ASC 740 by clarifying and amending existing guidance. The ASU applies to all entities that pay income taxes under GAAP. We adopted this accounting pronouncement on July 1, 2021 using the modified prospective approach. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements. Contract Assets and Contract Liabilities from Revenue Contracts with Customers in a Business Combination ​ In October 2021, the FASB issued Accounting Standards Update 2021-08, an accounting standard update to improve the accounting for contract assets and contract liabilities from revenue contracts with customers in a business combination (Topic 805). This amendment improves comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This authoritative guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. We early adopted the new guidance effective January 1, 2022 using the prospective approach and applied the amendments to both business combinations that occurred during the three months ended March 31, 2022. The adoption of ASU 2021-08 did not have a material impact on our consolidated financial statements. 11 Table of Contents 2. Business Combinations Under ASC 805, Business Combinations , the acquisition method of accounting requires us to record assets acquired less liabilities assumed in an acquisition at their estimated fair values at the date of acquisition. Any excess of the total estimated purchase consideration over the estimated fair value of the assets acquired less liabilities assumed should be 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. Management’s estimates of fair value are based upon assumptions which are believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. We may record adjustments to the assets acquired and liabilities assumed, with corresponding adjustments to goodwill, during the one-year post-acquisition measurement period as additional information becomes available. Any adjustments subsequent to the conclusion of such one-year measurement period are reflected in reported earnings. Fiscal Year 2022 Business Acquisitions ​ In February 2022, we (through our Security division) acquired a privately held provider of intelligent inspection, sensory, and recognition solutions for approximately $ 14 million, plus up to $ 25 million in potential contingent consideration. The acquisition was financed with cash on hand and borrowings under our revolving bank line of credit. The goodwill recognized for this business is not deductible for income tax purposes. ​ In February 2022, we (through our Security division) acquired a privately held sales and services company for approximately $ 1.1 million, plus an immaterial amount of potential contingent consideration. The acquisition was financed with cash on hand. The goodwill recognized for this transaction is deductible for income tax purposes. ​ These business acquisitions, individually and in the aggregate, were not material to our consolidated financial statements. Accordingly, pro-forma historical results of operations and other disclosures related to these businesses have not been presented. ​ 3. Balance Sheet Details ​ The following tables provide details of selected balance sheet accounts (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ March 31, Accounts receivable, net 2021 2022 Accounts receivable ​ $ 315,926 $ 304,042 Less allowance for doubtful accounts ​ ( 25,273 ) ​ ( 21,170 ) Total ​ $ 290,653 ​ $ 282,872 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ March 31, Inventories 2021 2022 Raw materials ​ $ 160,313 $ 194,643 Work-in-process ​ 59,594 ​ 72,135 Finished goods ​ 74,301 ​ 77,865 Total ​ $ 294,208 ​ $ 344,643 ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ March 31, Property and equipment, net 2021 ​ 2022 Land ​ $ 16,357 $ 15,029 Buildings, civil works and improvements ​ 57,555 ​ 47,438 Leasehold improvements ​ 8,874 ​ 11,643 Equipment and tooling ​ 129,735 ​ 131,222 Furniture and fixtures ​ 3,275 ​ 3,726 Computer equipment ​ 19,349 ​ 20,713 Computer software ​ 23,090 ​ 24,506 Computer software implementation in process ​ ​ 11,102 ​ ​ 10,550 Construction in process ​ 4,011 ​ 4,771 Total ​ 273,348 ​ 269,598 Less accumulated depreciation and amortization ​ ( 155,344 ) ​ ( 156,843 ) Property and equipment, net ​ $ 118,004 ​ $ 112,755 ​ Depreciation and amortization expense for property and equipment was $ 5.5 million and $ 5.4 million for the three months ended March 31, 2021 and 2022, respectively, and $ 16.3 million and $ 16.0 million for the nine months ended March 31, 2021 and 2022, respectively. ​ 13 Table of Contents 4. Goodwill and Intangible Assets ​ The changes in the carrying value of goodwill by segment for the nine-month period ended March 31, 2022 were as follows (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Optoelectronics ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ And ​ ​ ​ ​ ​ Security ​ Healthcare ​ Manufacturing ​ ​ ​ ​ Division Division Division Consolidated Balance as of June 30, 2021 ​ $ 206,426 ​ $ 43,584 ​ $ 70,294 ​ $ 320,304 Goodwill acquired or adjusted during the period ​ 17,703 ​ — ​ — ​ 17,703 Foreign currency translation adjustment ​ ( 20 ) ​ ( 181 ) ​ ( 1,151 ) ​ ( 1,352 ) Balance as of March 31, 2022 ​ $ 224,109 ​ $ 43,403 ​ $ 69,143 ​ $ 336,655 ​ Intangible assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 ​ March 31, 2022 ​ ​ Weighted ​ Gross ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Carrying ​ Accumulated ​ Intangibles ​ Carrying ​ Accumulated ​ Intangibles ​ Lives Value Amortization Net Value Amortization Net Amortizable assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Software development costs 8 - 9 years ​ $ 49,183 ​ $ ( 15,679 ) ​ $ 33,504 ​ $ 60,652 ​ $ ( 18,032 ) ​ $ 42,620 Patents 19 years ​ 8,753 ​ ( 2,597 ) ​ 6,156 ​ 8,515 ​ ( 2,875 ) ​ 5,640 Developed technology 10 years ​ 60,665 ​ ( 25,923 ) ​ 34,742 ​ 68,390 ​ ( 30,741 ) ​ 37,649 Customer relationships 7 years ​ 50,676 ​ ( 26,588 ) ​ 24,088 ​ 54,021 ​ ( 31,042 ) ​ 22,979 Total amortizable assets ​ ​ ​ 169,277 ​ ( 70,787 ) ​ 98,490 ​ 191,578 ​ ( 82,690 ) ​ 108,888 Non-amortizable assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In-process R&D ​ ​ ​ ​ 533 ​ ​ — ​ ​ 533 ​ ​ 533 ​ ​ — ​ ​ 533 Trademarks ​ ​ ​ 28,585 ​ — ​ 28,585 ​ 30,360 ​ — ​ 30,360 Total intangible assets ​ ​ ​ $ 198,395 ​ $ ( 70,787 ) ​ $ 127,608 ​ $ 222,471 ​ $ ( 82,690 ) ​ $ 139,781 ​ Amortization expense related to intangible assets was $ 4.8 million and $ 4.4 million for the three months ended March 31, 2021 and 2022, respectively. For the nine months ended March 31, 2021 and 2022, amortization expense related to intangible assets was $ 15.1 million and $ 13.0 million, respectively. ​ At March 31, 2022, the estimated future amortization expense for intangible assets was as follows (in thousands): ​ Fiscal Year ​ ​ ​ ​ ​ 2022 (remaining 3 months) $ 4,779 2023 ​ 18,981 2024 ​ 21,448 2025 ​ 19,826 2026 ​ ​ 13,979 Thereafter ​ 29,875 Total ​ $ 108,888 ​ Software development costs for software products incurred before establishing technological feasibility are charged to operations. Software development costs incurred after establishing technological feasibility are capitalized on a product-by-product basis until the product is available for general release to customers at which time amortization begins. Annual amortization, charged to cost of goods sold, is the amount computed using the ratio that current revenues for a product bear to the total current and anticipated future revenues for that product. In the event that future revenues are not estimable, such costs are amortized on a straight-line basis over the remaining estimated economic life of the product. Amortizable assets that have not yet begun to be amortized are included in Thereafter in the table above. For the three months ended March 31, 2021 and 2022, we capitalized software development costs in the amounts of $ 2.6 million and $ 4.0 million, respectively. For the nine months ended March 31, 2021 and 2022, we capitalized software development costs in the amounts of $ 9.1 million and $ 11.7 million, respectively. ​ 14 Table of Contents 5. Contract Assets and Liabilities ​ We enter into contracts to sell products and provide services, and we recognize contract assets and liabilities that arise from these transactions. We recognize revenue and corresponding accounts receivable according to ASC 606. When we recognize revenue in advance of the point in time at which contracts give us the right to invoice a customer, we record this as unbilled revenue, which is included in accounts receivable, net, on the consolidated balance sheets. We may also receive consideration, per the terms of a contract, from customers prior to transferring control of goods to the customer. We record customer deposits as contract liabilities. Additionally, we may receive payments, most typically under service and warranty contracts, at the onset of the contract and before services have been performed. In such instances, we record a deferred revenue liability. We recognize these contract liabilities as sales after all revenue recognition criteria are met. ​ The table below shows the balance of contract assets and liabilities as of June 30, 2021 and March 31, 2022, including the change between the periods. There were no substantial non-current contract assets for the periods presented. Contract Assets (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, March 31, ​ ​ ​ ​ 2021 2022 Change % Change Unbilled revenue (included in accounts receivable, net) ​ $ 40,853 ​ $ 44,483 ​ $ 3,630 9 % Contract Liabilities (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, March 31, ​ ​ ​ 2021 2022 Change % Change ​ Advances from customers ​ $ 38,463 ​ $ 45,914 ​ $ 7,451 ​ 19 % Deferred revenue—current ​ 32,689 ​ 32,465 ​ ( 224 ) ​ ( 1 ) % Deferred revenue—long-term ​ 14,898 ​ 19,813 ​ 4,915 ​ 33 % ​ Contract assets increased during the nine months ended March 31, 2022 primarily due to satisfaction of performance obligations for aviation, cargo and vehicle inspection customers in our Security division which have not yet been billed. The overall increase in contract liabilities was primarily due to receipt of upfront deposits from customers and deferred revenue from receipt of payments under service and warranty contracts primarily in our Security division. ​ Remaining Performance Obligations . Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations under an original contract with a term greater than one year which are fully or partially unsatisfied at the end of the period. As of March 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ 372.8 million. We expect to recognize revenue on approximately 41 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter. During the nine months ended March 31, 2022, we recognized revenue of $ 53.3 million from contract liabilities existing at the beginning of the period. ​ Practical Expedients. In cases where we are responsible for shipping after the customer has obtained control of the goods, we have elected to treat the shipping activities as fulfillment activities rather than as a separate performance obligation. Additionally, we have elected to capitalize the cost to obtain a contract only if the period of amortization would be longer than one year. We only give consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year. ​ 6. Leases ​ The components of operating lease expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Nine Months Ended March 31, ​ 2021 2022 2021 2022 Operating lease cost ​ $ 2,216 ​ $ 2,704 ​ $ 7,120 ​ $ 7,354 Variable lease cost ​ ​ 280 ​ ​ 263 ​ 723 ​ 650 Short-term lease cost ​ ​ 258 ​ ​ 268 ​ 649 ​ 854 ​ ​ $ 2,754 ​ $ 3,235 ​ $ 8,492 ​ $ 8,858 ​ 15 Table of Contents Sale-leaseback Transaction. In March 2022, we completed a sale-leaseback transaction for our manufacturing facilities and corporate headquarters in Hawthorne, California (the “Hawthorne Property”). We sold the Hawthorne Property for $ 32 million and recognized a gain of $ 27.4 million. We also entered into a 6-year lease agreement for the Hawthorne Property commencing March 10, 2022 and expiring on March 31, 2028, with two 5-year renewal options. As of March 31, 2022 , we recorded a right-of-use asset and lease liability for $ 5.7 million. Supplemental disclosures related to operating leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Category June 30, 2021 March 31, 2022 Operating lease ROU assets, net Other assets ​ $ 23,439 ​ $ 36,718 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities, current portion Other accrued expenses and current liabilities ​ $ 7,499 ​ $ 8,977 Operating lease liabilities, long-term Other long-term liabilities ​ 16,317 ​ 28,521 Total operating lease liabilities ​ ​ ​ $ 23,816 ​ $ 37,498 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ ​ ​ ​ ​ 5.1 years Weighted average discount rate ​ ​ ​ ​ ​ 3.5 % ​ Supplemental cash flow information related to operating leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, ​ 2021 2022 Cash paid for operating lease liabilities ​ $ 7,773 ​ $ 7,549 ROU assets obtained in exchange for new lease obligations ​ 1,810 ​ 9,519 ​ Maturities of operating lease liabilities at March 31, 2022 were as follows (in thousands): ​ ​ ​ ​ ​ ​ March 31, 2022 Less than one year ​ $ 10,101 1 – 2 years ​ 9,383 2 – 3 years ​ 7,438 3 – 4 years ​ 6,016 4 – 5 years ​ 5,437 Thereafter ​ 2,314 ​ ​ 40,689 Less: imputed interest ​ ( 3,191 ) Total lease liabilities ​ $ 37,498 ​ ​ 7. Impairment, Restructuring and Other Charges ​ We endeavor to align our global capacity and infrastructure with demand by our customers as well as fully integrate acquisitions and thereby improve operational efficiency. ​ During the three months ended March 31, 2022, we recognized $ 1.5 million in restructuring and other charges, which included $ 0.8 million in legal charges primarily related to class action litigation and government investigations, $ 0.4 million for employee terminations, and $ 0.3 million in acquisition related costs. During the three months ended March 31, 2021, we recognized a total net benefit of ($ 0.3 ) million which included a net benefit of ($ 0.7 ) million for reimbursements from our insurance carriers for covered legal charges. We also incurred charges of $ 0.2 million for employee terminations and $ 0.2 million for facility closure and operational efficiency activities. ​ 16 Table of Contents During the nine months ended March 31, 2022, we recognized $ 4.8 million in restructuring and other charges, which included $ 1.0 million in employee terminations, $ 0.3 million in acquisition related costs, and $ 3.5 million in legal charges primarily related to class action litigation and government investigations. During the nine months ended March 31, 2021, we incurred a total net expense of $ 7.9 million which included $ 7.2 million for exit activities associated with an expired turnkey contract in Mexico. Such exit costs included $ 2.8 million for employee terminations, $ 1.1 million for facility closure and other exit costs, direct transaction costs of $ 2.7 million, and $ 0.6 million for right-of-use asset impairment for a leased facility. We also incurred costs of $ 1.6 million for other employee terminations and facility closure costs for operational efficiency activities and $ 0.3 million for acquisition-related activities.We also recognized a net benefit of ($ 1.2 ) million for reimbursements from our insurance carriers for covered legal charges. ​ The following tables summarize impairment, restructuring and other charges (benefits), net for the periods set forth below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Optoelectronics and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Healthcare ​ Manufacturing ​ ​ ​ ​ ​ ​ ​ Security Division Division Division Corporate Total Acquisition-related costs ​ $ 22 ​ $ — ​ $ — ​ $ — ​ $ 22 Employee termination costs ​ ​ 213 ​ ​ — ​ ​ — ​ ​ — ​ ​ 213 Facility closures/consolidation costs ​ 166 ​ — ​ — ​ — ​ 166 Legal costs (recoveries), net ​ — ​ — ​ — ​ ( 686 ) ​ ( 686 ) Total expensed (benefit), net ​ $ 401 ​ $ — ​ $ — ​ $ ( 686 ) ​ $ ( 285 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Optoelectronics and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Healthcare ​ Manufacturing ​ ​ ​ ​ ​ ​ ​ Security Division Division Division Corporate Total Acquisition-related costs ​ $ 221 ​ $ — ​ $ — ​ $ 56 ​ $ 277 Employee termination costs ​ ​ 409 ​ ​ — ​ ​ — ​ ​ — ​ ​ 409 Facility closures/consolidation ​ ​ 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ 3 Legal costs, net ​ — ​ — ​ — ​ 780 ​ 780 Total expensed ​ $ 633 ​ $ — ​ $ — ​ $ 836 ​ $ 1,469 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, 2021 ​ ​ ​ ​ ​ Optoelectronics and ​ ​ ​ ​ ​ ​ ​ ​ ​ Healthcare ​ Manufacturing ​ ​ ​ ​ ​ ​ ​ Security Division Division Division Corporate Total Impairment charges ​ $ 552 ​ $ — ​ $ — ​ $ — ​ $ 552 Acquisition-related costs ​ ​ 250 ​ ​ 27 ​ ​ — ​ ​ — ​ ​ 277 Employee termination costs ​ ​ 4,010 ​ ​ — ​ 146 ​ ​ — ​ ​ 4,156 Mexico transaction costs ​ ​ 2,691 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,691 Facility closures/consolidation costs ​ 1,420 ​ — ​ — ​ — ​ 1,420 Legal costs (recoveries), net ​ — ​ — ​ — ​ ( 1,184 ) ​ ( 1,184 ) Total expensed (benefit), net ​ $ 8,923 ​ $ 27 ​ $ 146 ​ $ ( 1,184 ) ​ $ 7,912 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, 2022 ​ ​ ​ ​ ​ Optoelectronics and ​ ​ ​ ​ ​ ​ ​ ​ ​ Healthcare ​ Manufacturing ​ ​ ​ ​ ​ ​ ​ ​ Security Division ​ Division ​ Division ​ Corporate ​ Total Acquisition-related costs ​ $ 221 ​ $ — ​ $ — ​ $ 56 ​ $ 277 Employee termination costs ​ ​ 1,077 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,077 Facility closures/consolidation ​ ( 37 ) ​ — ​ — ​ — ​ ( 37 ) Legal costs, net ​ — ​ — ​ — ​ 3,493 ​ 3,493 Total expensed ​ $ 1,261 ​ $ — ​ $ — ​ $ 3,549 ​ $ 4,810 ​ 17 Table of Contents The accrued liability for restructuring and other charges is included in other accrued expenses and current liabilities in the condensed consolidated balance sheets. The changes in the accrued liability for restructuring and other charges for the nine-month period ended March 31, 2022 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Facility ​ ​ ​ ​ ​ ​ ​ Acquisition- ​ Employee ​ Closure/ ​ Legal ​ ​ ​ ​ ​ Related ​ Termination ​ Consolidation ​ Costs and ​ ​ ​ ​ Costs Costs Cost Settlements Total Balance as of June 30, 2021 ​ $ — ​ $ 250 ​ $ 386 ​ $ 2,772 ​ $ 3,408 Restructuring and other charges (benefits), net ​ 277 ​ 1,077 ​ ( 37 ) ​ 3,493 ​ 4,810 Payments, adjustments and reimbursements, net ​ ( 119 ) ​ ( 1,160 ) ​ ( 241 ) ​ ( 3,263 ) ​ ( 4,783 ) Balance as of March 31, 2022 ​ $ 158 ​ $ 167 ​ $ 108 ​ $ 3,002 ​ $ 3,435 ​ ​ 8. Borrowings ​ Revolving Credit Facility ​ In December 2021, we entered into an amendment to the senior secured credit facility that increased the aggregate amount available to borrow from $ 535 million to $ 750 million. The amended facility matures in December 2026 and is comprised of a $ 600 million revolving credit facility and a $ 150 million delayed draw term loan. The term loan is available to us to draw through September 1, 2022. The revolving credit facility includes a $ 300 million sub-limit for letters of credit. Under certain circumstances and subject to certain conditions, we have the ability to increase the revolving credit facility by the greater of $ 250 million or such amount as would not cause our secured leverage ratio to exceed a specified level. Borrowings under the amended facility bore interest at LIBOR plus a margin of 1.0 % as of March 31, 2022 (which margin can range from 1.0 % to 1.75 % based on our consolidated net leverage ratio as defined in the credit facility). The LIBOR index is expected to be phased out over time. The terms of our credit facility allow for replacement when that occurs. Letters of credit reduce the amount available to borrow under the credit facility by their face value amount. The unused portion of the facility bore a commitment fee of 0.10 % as of March 31, 2022 (which fee can range from 0.10 % to 0.25 % based on our consolidated net leverage ratio as defined in the credit facility). Our borrowings under the credit agreement are guaranteed by certain of our U.S.-based subsidiaries and are secured by substantially all of our assets and substantially all the assets of certain of our subsidiaries. The credit facility contains various representations and warranties, affirmative, negative and financial covenants and events of default. As of March 31, 2022, there were $ 73.0 million of borrowings outstanding under the revolving credit facility, $ 85.2 million outstanding under the letters of credit sub-facility, and $ 50 million outstanding under the term loan. As of March 31, 2022, the amount available to borrow under the revolving credit facility was $ 441.8 million and the amount available to borrow under the term loan was $ 100 million. Loan amounts under the revolving credit facility may be borrowed, repaid and re-borrowed during the term. The principal amount of each loan is due and payable in full on the maturity date. We have the right to repay each loan in whole or in part from time to time without penalty. It is our practice to routinely borrow and repay several times per year under the revolving facility and therefore, borrowings under the revolving credit facility are included in current liabilities. As of March 31, 2022, we were in compliance with all financial covenants under this credit facility. ​ 1.25% Convertible Senior Notes (“Notes”) Due 2022 ​ In February 2017, we issued $ 287.5 million of the Notes in a private offering. The Notes are governed by an indenture dated February 22, 2017. The maturity for the payment of principal is September 1, 2022. The Notes bear interest at the rate of 1.25 % and are payable in cash semiannually in arrears on each March 1 and September 1. The Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries as well as any of our existing and future indebtedness that may be guaranteed by our subsidiaries to the extent of such guarantees (including the guarantees of certain of our subsidiaries under our existing credit facility). ​ The Notes are convertible at any time at an initial conversion rate of 9.3056 per $1,000 principal amount of the Notes, which is equal to an initial conversion price of approximately $ 107.46 per share or a 38.5 % premium to our stock price at the time of the issuance. The conversion rate is subject to adjustment upon certain events. Upon conversion, the original indenture provided that the Notes may be settled, at our election, in cash or shares of our common stock or a combination of cash and shares of our common stock. We have irrevocably elected a combination settlement method to satisfy the conversion obligation, which provides for us to settle the principal amount of the Notes in cash and to settle the excess conversion value, if any, in shares of common stock and cash in lieu of fractional shares. 18 Table of Contents ​ We may redeem the Notes if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days. If we undergo a fundamental change, as defined in the indenture for the Notes, subject to certain conditions, holders of the Notes may require us to repurchase all or part of the Notes for cash at a price equal to 100 % of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The occurrence of a fundamental change will also result in the Notes becoming immediately convertible. Since the last reported sales price of our common stock did not exceed 130 % of the conversion price for at least 20 trading days within any applicable period of 30 consecutive trading days, the Notes are not yet convertible. ​ Pursuant to ASC 470-20, we originally allocated the $ 287.5 million gross proceeds of the Notes between liability and equity components. The initial $ 242.4 million liability component was determined based on the fair value of similar debt instruments excluding the conversion feature for similar terms and priced on the same day the Notes were issued. The initial $ 45.1 million equity component represented the debt discount and was calculated as the difference between the fair value of the debt and the gross proceeds of the Notes. Issuance costs of $ 7.7 million were allocated between debt ($ 6.5 million) and equity ($ 1.2 million) components with the portion allocated to the debt presented as an offset against long-term debt in the consolidated balance sheet and was being amortized as interest expense over the life of the Notes using the effective interest method. Total interest expense recognized for the three and nine months ended March 31, 2021 related to the Notes was $ 3.3 million and $ 10.0 million, respectively, which consisted of $ 0.9 million and $ 2.7 million of contractual interest expense, $ 2.2 million and $ 6.4 million of debt discount amortization and $ 0.3 million and $ 0.9 million of amortization of debt issuance costs. For the three and nine months ended March 31, 2022, the total interest expense was $ 1.2 million and $ 3.7 million, respectively, which consisted of $ 0.9 million and $ 2.7 million of contractual interest expense and $ 0.3 million and $ 1.0 million of amortization of debt issuance costs. As of July 1, 2021, the remaining unamortized debt discount of $ 10.5 million was eliminated upon the adoption of ASU 2020-06. The unamortized debt issuance cost of $ 1.4 million and $ 0.6 million as of June 30, 2021 and March 31, 2022, respectively, is amortized on a straight-line basis, which approximates the effective interest method, over the life of the Notes. ​ In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments typically will be closer to the coupon interest rate. We early adopted the new guidance on July 1, 2021 using the modified retrospective approach and recorded a $ 19 million increase to retained earnings and a reduction of $ 27 million in common stock as if there had been no equity component. Additionally, we recorded an increase to the convertible notes balance by $ 10 million. ​ During the three months ended March 31, 2022, we repurchased and cancelled approximately $ 40.2 million of principal value of the Notes. We recognized a loss on debt extinguishment of $ 0.1 million during the quarter ended March 31, 2022, representing the write-off of unamortized debt issuance costs related to the portion of the Notes repurchased. Other Borrowings ​ Several of our foreign subsidiaries maintain bank lines of credit, denominated in local currencies and U.S. dollars, primarily for the issuance of letters of credit. As of March 31, 2022, $ 61.9 million was outstanding under these letter-of-credit facilities. As of March 31, 2022, the total amount available under these credit facilities was $ 11.5 million. ​ 19 Table of Contents Long-term debt consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 March 31, 2022 1.25% convertible notes due September 1, 2022: ​ ​ ​ ​ ​ ​ Principal amount ​ $ 287,500 ​ $ 247,302 Unamortized discount ​ ​ ( 10,494 ) ​ ​ — Unamortized debt issuance costs ​ ​ ( 1,372 ) ​ ​ ( 500 ) ​ ​ ​ 275,634 ​ ​ 246,802 Term loan ​ ​ — ​ ​ 50,000 Other long-term debt ​ 1,633 ​ 1,221 ​ ​ 277,267 ​ 298,023 Less current portion of long-term debt ​ ( 846 ) ​ ( 249,315 ) Long-term portion of debt ​ $ 276,421 ​ $ 48,708 ​ ​ 9. Stockholders’ Equity ​ Stock-based Compensation ​ As of March 31, 2022, we maintained the Amended and Restated 2012 Incentive Award Plan (the “OSI Plan”) as a stock-based employee compensation plan. ​ We recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Nine Months Ended March 31, ​ 2021 2022 2021 2022 Cost of goods sold ​ $ 199 ​ $ 205 ​ $ 571 ​ $ 616 Selling, general and administrative ​ ​ 7,223 ​ ​ 6,567 ​ 18,391 ​ ​ 19,977 Research and development ​ ​ 143 ​ ​ 126 ​ 424 ​ ​ 393 Stock-based compensation expense ​ $ 7,565 ​ $ 6,898 ​ $ 19,386 ​ $ 20,986 ​ As of March 31, 2022, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 0.7 million for stock options and $ 20.3 million for restricted stock units (“RSUs”). We expect to recognize these costs over a weighted average period of 2.2 years with respect to the stock options and 1.8 years with respect to the RSUs. ​ The following summarizes stock option activity during the nine months ended March 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Weighted-Average ​ Aggregate ​ ​ Number of ​ Exercise ​ Remaining Contractual ​ Intrinsic Value ​ Options Price Term (in thousands) Outstanding at June 30, 2021 255,220 $ 50.24 ​ ​ ​ ​ Granted 22,954 ​ ​ 96.38 ​ ​ ​ ​ ​ Exercised ( 164,612 ) ​ ​ 34.61 ​ ​ ​ ​ ​ Expired or forfeited ( 834 ) ​ ​ 71.83 ​ ​ ​ ​ ​ Outstanding at March 31, 2022 112,728 ​ ​ 82.30 ​ 6.4 years ​ $ 816 Exercisable at March 31, 2022 ​ 72,371 ​ ​ 76.69 4.9 years ​ ​ 780 ​ 20 Table of Contents The following summarizes RSU award activity during the nine months ended March 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ Shares Fair Value Nonvested at June 30, 2021 435,925 ​ $ 84.16 Granted 334,435 ​ ​ 90.31 Vested ( 335,099 ) ​ ​ 82.66 Forfeited ( 4,542 ) ​ ​ 84.21 Nonvested at March 31, 2022 430,719 ​ $ 90.11 ​ In December 2020, our shareholders authorized an increase of 1.65 million shares for the OSI Plan resulting in a maximum pool of 7.1 million shares. As of March 31, 2022, there were approximately 1.4 million shares available for grant under the OSI Plan. Under the terms of the OSI Plan, RSUs and restricted stock granted from the pool of shares available for grant reduce the pool by 1.87 shares for each award granted. RSUs and restricted stock forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited. ​ We granted 136,242 and 96,620 performance-based RSUs during the nine months ended March 31, 2021 and 2022, respectively. These performance based RSU awards are contingent on the achievement of certain performance metrics. The payout related to these awards can range from zero to 376 % of the original number of shares or units awarded. Compensation cost associated with these performance based RSUs are recognized based on the estimated number of shares that we ultimately expect will vest. If the estimated number of shares to vest is revised in the future, then stock-based compensation expense will be adjusted accordingly. ​ Stock Repurchase Program ​ Our Board of Directors has authorized a share repurchase program of up to 3,000,000 shares of common stock. This program does not expire unless our Board of Directors acts to terminate the program. 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 in our consolidated financial statements as a reduction in the number of shares of common stock issued and outstanding. ​ During the nine months ended March 31, 2022, we repurchased 1,117,258 shares of our common stock. As of March 31, 2022, there were 1,430,737 shares remaining available for repurchase under the authorized repurchase program. ​ Dividends ​ We have not paid any cash dividends since the consummation of our initial public offering in 1997 and we do not currently intend to pay any cash dividends in the foreseeable future. Our Board of Directors will determine the payment of future cash dividends, if any. Certain of our current bank credit facilities restrict the payment of cash dividends and future borrowings may contain similar restrictions. ​ 10. Commitments and Contingencies ​ Acquisition-Related Contingent Obligations ​ Under the terms and conditions of the purchase agreements associated with certain acquisitions, we may be obligated to make additional payments based on the achievement of certain sales or profitability milestones through the acquired operations. For agreements that contain contingent consideration caps, the remaining maximum amount of such potential future payments is $ 52.4 million as of March 31, 2022. ​ We account for such contingent payments for acquisitions which occurred through the end of fiscal year 2009 as additions to the purchase price of the acquired business. We made contingent payments relating to such acquisitions of $ 0.2 million and $ 0.9 million, respectively, during the three and nine months ended March 31, 2021 and $ 0.3 million and $ 1.7 million, respectively, during the three and nine months ended March 31,2022. ​ 21 Table of Contents For acquisitions completed after fiscal 2009, pursuant to ASC 805, the estimated fair value of these obligations is recorded as a liability at the time of the acquisition with subsequent revisions recorded in Selling, general and administrative expense in the consolidated financial statements. The estimated fair value measurements of contingent earnout obligations are primarily based on unobservable inputs, which may include projected revenues, gross margins, operating income and the estimated probability of achieving the earnouts. ​ These projections and probabilities are used to estimate future contingent earnout payments, which are discounted back to present value to compute contingent earnout liabilities. The following table provides a roll-forward from June 30, 2021 to March 31, 2022 of the contingent consideration liability, which is included in other accrued expenses and current liabilities and other long-term liabilities in our consolidated balance sheets (in thousands): ​ ​ ​ ​ ​ Beginning fair value, June 30, 2021 $ 19,431 Addition of contingent earnout obligations ​ ​ 14,609 Foreign currency translation adjustment ​ ​ ( 243 ) Changes in fair value for contingent earnout obligations ​ ( 5,363 ) Payments on contingent earnout obligations ​ ( 168 ) Ending fair value, March 31, 2022 ​ $ 28,266 ​ Environmental Contingencies ​ We are subject to various environmental laws. We often conduct environmental investigations at our manufacturing facilities in North America, Asia-Pacific, and Europe, and, to the extent practicable, on all new properties in order to identify, as of the date of such investigation, potential areas of environmental concern related to past and present activities or from nearby operations. In certain cases, we have conducted further environmental assessments consisting of soil and groundwater testing and other investigations deemed appropriate by independent environmental consultants. ​ We have not accrued for loss contingencies relating to environmental matters because we believe that, although unfavorable outcomes are possible, they are not considered by our management to be probable and reasonably estimable. If one or more of these environmental matters are resolved in a manner adverse to us, the impact on our business, financial condition, results of operations and cash flow could be material. ​ Indemnifications and Certain Employment-Related Contingencies ​ In the normal course of business, we have agreed to indemnify certain parties with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from breaches of representations, warranties or covenants, or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into indemnification agreements with our directors and certain of our officers. It is not possible to determine the maximum potential liability amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. We have not recorded any liability for costs related to contingent indemnification obligations as of March 31, 2022. ​ On December 31, 2017, we and Deepak Chopra, our Chief Executive Officer, entered into an amendment to Mr. Chopra’s employment agreement that, among other things, provides for a $ 13.5 million bonus payment to Mr. Chopra on or within 45 days of January 1, 2024 contingent upon Mr. Chopra’s continued employment with us through that date, subject to accelerated payout terms in the event of Mr. Chopra’s death or disability. The bonus is recorded in the financial statements over the remaining term of the employment agreement and is included in other long-term liabilities. ​ Product Warranties ​ We offer our customers warranties on many of the products that we sell. These warranties typically provide for repairs and maintenance of the products if problems arise during a specified time period after original shipment. Concurrent with the sale of products, we record a provision for estimated warranty expenses with a corresponding increase in cost of goods sold. We periodically adjust this provision based on historical experience and anticipated expenses. We charge actual expenses of repairs under warranty, including parts and labor, to this provision when incurred. The current obligation for warranty provision is included in other accrued expenses and current liabilities and the noncurrent portion is included in other long-term liabilities in the consolidated balance sheets. ​ 22 Table of Contents The following table presents changes in warranty provisions (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended March 31, ​ 2021 2022 Balance at beginning of period ​ $ 20,825 ​ $ 19,736 Additions ​ ​ 3,759 ​ ​ 2,292 Reductions for warranty repair costs and adjustments ​ ( 4,975 ) ​ ( 7,191 ) Balance at end of period ​ $ 19,609 ​ $ 14,837 ​ Legal Proceedings ​ In December 2017, a short seller released a report regarding our compliance with the Foreign Corrupt Practices Act. Following that report, we and certain of our executive officers have been named as defendants in several lawsuits in the United States District Court for the Central District of California (“District Court”) that were filed in December 2017 and February 2018. Each of the complaints closely tracks the allegations set forth in the short seller’s report. All of the actions, which were consolidated by the District Court in March 2018 in an action captioned Arkansas Teacher Retirement System et al. v. OSI Systems, Inc. et al. , No. 17 cv 08841, allege violations of Sections 10(b) and 20(a) of the Exchange Act, relating to certain of our public statements and filings with the SEC, and seek damages and other relief based upon the allegations in the complaints. Although we believe that the actions are without merit, because of the costs and inherent uncertainty in litigation, we reached an agreement to settle the Arkansas Teacher Retirement Systems matter for $ 12.5 million, which was preliminarily approved by the court on December 30, 2021 and paid during the quarter ended March 31, 2022. We were reimbursed by insurance $ 4.5 million of the settlement amount during the quarter ended March 31, 2022 and were reimbursed the remaining $ 8.0 million in April 2022. As of March 31, 2022, the $ 8.0 million was included as a receivable in Prepaid expenses and other current assets. ​ In April 2018 and March 2019, two shareholder derivative complaints were filed purportedly on behalf of the Company against certain members of our Board of Directors (as individual defendants), a former member of our Board of Directors, and a member of management. The derivative actions, which were consolidated by the District Court in November 2019 in an action captioned Riley v. Chopra, et al. No. 18 CV 03371, allege, among other things, breach of fiduciary duties relating to the allegations contained in the above-mentioned short seller report and seek damages, restitution, injunctive relief, attorneys’ and experts’ fees, costs, expenses, and other unspecified relief. The derivative actions have been dismissed, and the dismissal was affirmed by the 9 th Circuit Court of Appeal. ​ We are involved in various other claims and legal proceedings arising in the ordinary course of business. In our opinion after consultation with legal counsel, the ultimate disposition of such proceedings is not likely to have a material adverse effect on our business, financial condition, results of operations or cash flows. We have not accrued for loss contingencies relating to any such matters because we believe that, although unfavorable outcomes in the proceedings are possible, they are not considered by management to be probable and reasonably estimable. If one or more of these matters are resolved in a manner adverse to our company, the impact on our business, financial condition, results of operations and cash flows could be material. ​ 11. Income Taxes ​ The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the development of tax planning strategies during the year. In addition, as a global commercial enterprise, our tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions. ​ The effective tax rates for the three months ended March 31, 2022 and 2021 were 20.1 % and 33.7 %, respectively. During the three month period ended March 31, 2022, we recognized a net discrete tax benefit of $ 0.2 million related to equity-based compensation under ASU 2016-09 and changes in prior year tax estimates. During the three months ended March 31, 2021, we recognized a net discrete tax expense of $ 2.2 million for changes in prior year tax estimates of $ 2.4 million, offset by a discrete tax benefit of ($ 0.2 ) million for equity-based compensation under ASU 2016-09. ​ The effective tax rate for the nine months ended March 31, 2022 and 2021 was 20.8 % and 30.1 %, respectively. During the nine months ended March 31, 2022, we recognized a net discrete tax benefit of $ 2.0 million related to equity-based compensation under ASU 2016-09 . During the nine months ended March 31, 2021, we recognized a net discrete tax expense of $ 2.3 million for changes in prior year tax estimates of $ 2.8 million, offset by a ($ 0.5 ) million tax benefit from equity-based compensation under ASU 2016-09. ​ 23 Table of Contents 12. Segment Information ​ We have determined that we operate in three identifiable industry segments: (a) security and inspection systems (Security division), (b) medical monitoring and diagnostic cardiology systems (Healthcare division) and (c) optoelectronic devices and manufacturing (Optoelectronics and Manufacturing division). We also have a corporate segment (Corporate) that includes executive compensation and certain other general and administrative expenses, expenses related to stock issuances and legal, audit and other professional service fees not allocated to industry segments. Both the Security and Healthcare divisions comprise primarily end-product businesses, whereas the Optoelectronics and Manufacturing division primarily supplies components and subsystems to external OEM customers, as well as to the Security and Healthcare divisions. Sales between divisions are at transfer prices that approximate market values. All other accounting policies of the segments are the same as described in Note 1, Basis of Presentation. ​ The following tables present our results of operations and identifiable assets by industry segment (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Nine Months Ended March 31, ​ 2021 2022 2021 2022 Revenues (1) —by Segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Security division ​ $ 151,409 ​ $ 158,644 ​ $ 431,420 ​ $ 454,079 Healthcare division ​ ​ 54,023 ​ ​ 52,178 ​ 160,421 ​ 155,191 Optoelectronics and Manufacturing division, including intersegment revenues ​ ​ 90,278 ​ ​ 92,122 ​ 257,713 ​ 275,917 Intersegment revenues elimination ​ ​ ( 11,923 ) ​ ​ ( 12,467 ) ​ ( 34,850 ) ​ ( 38,772 ) Total ​ $ 283,787 ​ $ 290,477 ​ $ 814,704 ​ $ 846,415 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) from operations —by Segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Security division ​ $ 23,969 ​ $ 20,559 ​ $ 52,651 ​ $ 60,323 Healthcare division ​ ​ 7,333 ​ ​ 7,480 ​ 25,640 ​ 20,430 Optoelectronics and Manufacturing division ​ ​ 10,484 ​ ​ 11,177 ​ 29,638 ​ 34,342 Corporate ​ ​ ( 9,078 ) ​ ​ ( 10,729 ) ​ ( 25,895 ) ​ ( 32,855 ) Intersegment eliminations ​ ​ ( 242 ) ​ ​ ( 61 ) ​ ( 517 ) ​ ( 48 ) Total ​ $ 32,466 ​ $ 28,426 ​ $ 81,517 ​ $ 82,192 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ March 31, ​ 2021 2022 Assets (2) —by Segment: ​ ​ ​ ​ ​ ​ Security division ​ $ 798,192 ​ $ 847,050 Healthcare division ​ 220,411 ​ 232,850 Optoelectronics and Manufacturing division ​ 282,039 ​ 299,059 Corporate ​ 121,293 ​ 115,531 Eliminations (3) ​ ( 37,568 ) ​ ( 35,399 ) Total ​ $ 1,384,367 ​ $ 1,459,091 (1) For each of the three and nine month periods ended March 31, 2021 and March 31, 2022, no customer accounted for greater than 10 % of total net revenues. (2) As of June 30, 2021 and March 31, 2022, no customer accounted for greater than 10 % of accounts receivable. (3) Eliminations in assets reflect the amount of inter-segment profits in inventory and inter-segment ROU assets under ASC 842 as of the balance sheet date. Such inter-segment profit will be realized when inventory is shipped to the external customers of the Security and Healthcare divisions. ​ 24 Table of Contents