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, ​ September 30, ​ 2025 2025 ASSETS ​ ​ ​ ​ ​ ​ CURRENT ASSETS: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 106,405 ​ $ 124,416 Accounts receivable, net ​ 837,743 ​ ​ 828,231 Inventories ​ 407,174 ​ ​ 454,034 Prepaid expenses and other current assets ​ 71,539 ​ ​ 70,768 Total current assets ​ 1,422,861 ​ ​ 1,477,449 Property and equipment, net ​ 126,747 ​ ​ 128,258 Goodwill ​ 387,393 ​ ​ 385,435 Intangible assets, net ​ 183,290 ​ ​ 182,894 Other assets ​ 120,966 ​ ​ 125,120 Total assets ​ $ 2,241,257 ​ $ 2,299,156 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES: ​ ​ ​ ​ ​ ​ Bank lines of credit ​ $ 178,000 ​ $ 252,100 Current portion of long-term debt ​ 8,130 ​ ​ 5,379 Accounts payable ​ 205,181 ​ ​ 216,964 Accrued payroll and related expenses ​ 49,535 ​ ​ 45,763 Advances from customers ​ 68,184 ​ ​ 79,287 Deferred revenue ​ 77,788 ​ 75,165 Other accrued expenses and current liabilities ​ 110,120 ​ ​ 117,004 Total current liabilities ​ 696,938 ​ ​ 791,662 Long-term debt, net ​ 463,504 ​ ​ 436,844 Deferred income taxes ​ 3,334 ​ ​ 1,371 Other long-term liabilities ​ 126,397 ​ ​ 123,321 Total liabilities ​ 1,290,173 ​ ​ 1,353,198 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, 16,794,399 shares at June 30, 2025 and 16,977,595 shares at September 30, 2025 ​ 29,758 ​ ​ 4,390 Retained earnings ​ 942,254 ​ ​ 962,810 Accumulated other comprehensive loss ​ ( 20,928 ) ​ ​ ( 21,242 ) Total stockholders’ equity ​ 951,084 ​ ​ 945,958 Total liabilities and stockholders’ equity ​ $ 2,241,257 ​ $ 2,299,156 ​ 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 September 30, ​ 2024 2025 Net revenues: ​ ​ ​ ​ ​ ​ Products ​ $ 255,808 ​ $ 275,810 Services ​ 88,199 ​ ​ 108,813 Total net revenues ​ 344,007 ​ ​ 384,623 Cost of goods sold: ​ ​ ​ ​ ​ ​ Products ​ 170,422 ​ ​ 202,056 Services ​ 52,083 ​ ​ 59,382 Total cost of goods sold ​ 222,505 ​ ​ 261,438 Gross profit ​ 121,502 ​ ​ 123,185 Operating expenses: ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 72,223 ​ ​ 66,955 Research and development ​ 17,773 ​ ​ 20,427 Restructuring and other charges ​ 1,178 ​ ​ 2,730 Total operating expenses ​ 91,174 ​ ​ 90,112 Income from operations ​ 30,328 ​ ​ 33,073 Interest and other expense, net ​ ( 7,359 ) ​ ​ ( 7,398 ) Income before income taxes ​ 22,969 ​ ​ 25,675 Provision for income taxes ​ ( 5,033 ) ​ ​ ( 5,119 ) Net income ​ $ 17,936 ​ $ 20,556 Earnings per share: ​ ​ ​ ​ ​ ​ Basic ​ $ 1.07 ​ $ 1.22 Diluted ​ $ 1.05 ​ $ 1.18 Shares used in per share calculation: ​ ​ ​ ​ ​ ​ Basic ​ 16,742 ​ ​ 16,896 Diluted ​ 17,055 ​ ​ 17,473 ​ 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 September 30, ​ 2024 2025 Net income ​ $ 17,936 ​ $ 20,556 Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ Foreign currency translation adjustment, net of tax ​ 1,181 ​ ​ ( 161 ) Net unrealized loss on derivatives, net of tax ​ ​ ( 3,220 ) ​ ​ ( 239 ) Other, net of tax ​ ​ — ​ ​ 86 Other comprehensive loss ​ ​ ( 2,039 ) ​ ​ ( 314 ) Comprehensive income ​ $ 15,897 ​ $ 20,242 ​ 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 September 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ Other ​ ​ ​ ​ Number of ​ ​ Retained Comprehensive ​ ​ ​ Shares Amount Earnings Loss Total Balance—June 30, 2024 17,055,497 ​ $ 24,289 ​ $ 861,230 ​ $ ( 22,036 ) ​ $ 863,483 Exercise of stock options 957 ​ ​ 70 ​ ​ — ​ ​ — ​ ​ 70 Vesting of RSUs 297,418 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Shares issued under employee stock purchase plan ​ 31,143 ​ ​ 2,329 ​ ​ — ​ ​ — ​ ​ 2,329 Stock-based compensation expense — ​ ​ 6,422 ​ ​ — ​ ​ — ​ ​ 6,422 Repurchase of common stock ​ ( 531,314 ) ​ ​ ( 28,919 ) ​ ​ ( 51,524 ) ​ ​ — ​ ​ ( 80,443 ) Taxes paid related to net share settlement of equity awards ( 142,952 ) ​ ​ ( 4,174 ) ​ ​ ( 17,089 ) ​ ​ — ​ ​ ( 21,263 ) Net income — ​ ​ — ​ ​ 17,936 ​ ​ — ​ ​ 17,936 Other comprehensive loss — ​ ​ — ​ ​ — ​ ​ ( 2,039 ) ​ ​ ( 2,039 ) Balance—September 30, 2024 ​ 16,710,749 ​ $ 17 ​ $ 810,553 ​ $ ( 24,075 ) ​ $ 786,495 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ Other ​ ​ ​ ​ Number of ​ ​ Retained Comprehensive ​ ​ ​ Shares Amount Earnings Loss Total Balance—June 30, 2025 16,794,399 ​ $ 29,758 ​ $ 942,254 ​ $ ( 20,928 ) ​ $ 951,084 Exercise of stock options 2,215 ​ ​ 217 ​ ​ — ​ ​ — ​ ​ 217 Vesting of RSUs 313,580 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Shares issued under employee stock purchase plan ​ 20,219 ​ ​ 2,635 ​ ​ — ​ ​ — ​ ​ 2,635 Stock-based compensation expense — ​ ​ 6,199 ​ ​ — ​ ​ — ​ ​ 6,199 Taxes paid related to net share settlement of equity awards ( 152,818 ) ​ ​ ( 34,419 ) ​ ​ — ​ ​ — ​ ​ ( 34,419 ) Net income — ​ ​ — ​ ​ 20,556 ​ ​ — ​ ​ 20,556 Other comprehensive loss — ​ ​ — ​ ​ — ​ ​ ( 314 ) ​ ​ ( 314 ) Balance—September 30, 2025 ​ 16,977,595 ​ $ 4,390 ​ $ 962,810 ​ $ ( 21,242 ) ​ $ 945,958 ​ ​ 6 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ 2024 2025 CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ ​ ​ Net income ​ $ 17,936 ​ $ 20,556 Adjustments to reconcile net income to net cash provided by (used in) operating activities, net of effects from acquisitions: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 11,450 ​ ​ 10,260 Stock-based compensation expense ​ 6,422 ​ ​ 6,199 Provision for (recovery of) losses on accounts receivable ​ ​ ( 427 ) ​ ​ 1,331 Deferred income taxes ​ ​ ( 851 ) ​ ​ 18 Amortization of debt discount and issuance costs ​ 354 ​ ​ 450 Other ​ ( 21 ) ​ ​ ( 25 ) Changes in operating assets and liabilities—net of business acquisitions: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ( 30,187 ) ​ ​ 17,038 Inventories ​ ( 54,458 ) ​ ​ ( 47,412 ) Prepaid expenses and other assets ​ ( 23,325 ) ​ ​ ( 4,922 ) Accounts payable ​ ( 4,952 ) ​ ​ 11,970 Accrued payroll and related expenses ​ ​ ( 7,811 ) ​ ​ ( 4,349 ) Advances from customers ​ 10,267 ​ ​ 11,119 Deferred revenue ​ ​ 11,485 ​ ​ ( 3,733 ) Other ​ 26,958 ​ ​ ( 1,363 ) Net cash provided by (used in) operating activities ​ ( 37,160 ) ​ ​ 17,137 CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ( 7,705 ) ​ ​ ( 7,028 ) Proceeds from sale of property and equipment ​ ​ 85 ​ ​ 589 Acquisition of business, net of cash acquired ​ ( 75,500 ) ​ ​ ( 92 ) Payments for intangible and other assets ​ ( 4,372 ) ​ ​ ( 4,409 ) Net cash used in investing activities ​ ( 87,492 ) ​ ​ ( 10,940 ) CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ Net borrowings (repayments) on bank lines of credit ​ ( 125,000 ) ​ ​ 74,100 Proceeds from long-term debt ​ 340,475 ​ ​ 100,057 Payments on long-term debt ​ ( 2,078 ) ​ ​ ( 129,917 ) Proceeds from exercise of stock options and employee stock purchase plan ​ 2,399 ​ ​ 2,852 Payment of contingent consideration ​ ​ ( 331 ) ​ ​ ( 486 ) Repurchase of common stock ​ ( 80,443 ) ​ ​ — Taxes paid related to net share settlement of equity awards ​ ( 21,263 ) ​ ​ ( 34,419 ) Net cash provided by financing activities ​ 113,759 ​ ​ 12,187 Effect of exchange rate changes on cash ​ 593 ​ ​ ( 373 ) Net increase (decrease) in cash and cash equivalents ​ ( 10,300 ) ​ ​ 18,011 Cash and cash equivalents—beginning of period ​ 95,353 ​ ​ 106,405 Cash and cash equivalents—end of period ​ $ 85,053 ​ $ 124,416 Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ Cash paid, net during the period for: ​ ​ ​ ​ ​ ​ Interest ​ $ 5,231 ​ $ 8,211 Income taxes ​ $ 13,540 ​ $ 9,609 ​ See accompanying notes to condensed consolidated financial statements. ​ 7 Table of Contents OSI SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 1. Basis of Presentation The unaudited 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, 2025 filed with the SEC. The results of operations for the three months ended September 30, 2025 are not necessarily indicative of the operating results to be expected for the full 2026 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, costs of sales and expenses 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, contingent consideration, allowance for doubtful accounts, 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 estimated amounts. ​ 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 2.25 % convertible senior notes due 2029 (the “2029 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 $ 191.98 because the principal amount of the 2029 Notes will be settled in cash upon conversion. There was a dilutive effect of the 2029 Notes as set forth in the table below for the three months ended September 30, 2025. ​ 8 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 September 30, ​ ​ 2024 2025 Net income available to common stockholders ​ $ 17,936 ​ $ 20,556 Weighted average shares outstanding—basic ​ 16,742 ​ ​ 16,896 Dilutive effect of equity awards ​ 313 ​ ​ 287 Dilutive effect of 2029 Notes ​ ​ — ​ ​ 290 Weighted average shares outstanding—diluted ​ 17,055 ​ ​ 17,473 Basic earnings per share ​ $ 1.07 ​ $ 1.22 Diluted earnings per share ​ $ 1.05 ​ $ 1.18 Shares excluded from diluted earnings per share due to their anti-dilutive effect ​ ​ 22 ​ ​ — ​ 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 $ 124.4 million at September 30, 2025. Of this amount, approximately 64 % was held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were held primarily by our subsidiaries in India, the United Kingdom, Singapore, and Canada and to a lesser extent Malaysia, Australia, and Indonesia, 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 which we believe to be 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, an interest rate swap contract and foreign currency forward contracts. The carrying values of financial instruments, other than long-term debt instruments and our interest rate swap contract, 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, 2025 or as of September 30, 2025. ​ Fair value is the price that would be received in the sale of 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 at quoted prices in active markets for identical assets and liabilities. The “Level 2” category includes assets and liabilities from observable inputs other than quoted market prices. The “Level 3” category includes assets and liabilities for which valuation techniques 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, 2025 September 30, 2025 ​ Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets—Insurance company contracts ​ $ — ​ $ 54,437 ​ $ — ​ $ 54,437 ​ $ — ​ $ 58,801 ​ $ — ​ $ 58,801 Assets – Interest rate swap contract ​ $ — ​ $ 932 ​ $ — ​ $ 932 ​ $ — ​ $ 620 ​ $ — ​ $ 620 Liabilities—Convertible notes ​ $ — ​ $ 472,770 ​ $ — ​ $ 472,770 ​ $ — ​ $ 505,974 ​ $ — ​ $ 505,974 Liabilities—Contingent consideration ​ $ — ​ $ — ​ $ 19,086 ​ $ 19,086 ​ $ — ​ $ — ​ $ 15,845 ​ $ 15,845 ​ 9 Table of Contents Derivative Instruments and Hedging Activity ​ Our use of derivatives consists of foreign currency forward contracts and an interest rate swap agreement. Our foreign currency 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 also manage our risk to changes in interest rates using derivative instruments. We use fixed interest rate swaps to effectively convert a portion of the variable interest rate payments to fixed interest rate payments. We do not use hedging instruments for speculative purposes. ​ The net gains or losses from our foreign currency forward contracts, which are not designated as hedge instruments, are reported in the consolidated statements of operations, and the amounts reported for the three months ended September 30, 2024 and 2025 were not significant. The fair value of our foreign currency forward 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, 2025 and September 30, 2025, we held foreign currency forward contracts with notional amounts totaling $ 99.9 million and $ 113.4 million, respectively. Unrealized gains and losses from our foreign currency forward contracts as of June 30, 2025 and September 30, 2025 were not significant. Our interest rate swap agreement was entered into to improve the predictability of cash flows from interest payments related to our variable, Secured Overnight Financing Rate (“SOFR”)-based debt. The interest rate swap matures in December 2026. The interest rate swap is considered an effective cash flow hedge, and as a result, the net gains or losses on such instrument are reported as a component of other comprehensive income (loss) in our consolidated financial statements and are reclassified as net income when the underlying hedged interest impacts earnings. A qualitative and quantitative assessment of the interest rate swap hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate that the hedge may no longer be highly effective. As of June 30, 2025 and September 30, 2025, the notional amount of the derivative instruments designated as an interest rate swap hedge was $ 175 million. The fair value of the interest rate swap agreement as of June 30, 2025 and September 30, 2025 is recorded in Other assets within the consolidated balance sheet. The effect of the cash flow hedges on other comprehensive income (loss) and earnings for the periods presented was as follows: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ 2024 2025 Total interest and other expense, net presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded ​ $ ( 7,359 ) ​ $ ( 7,398 ) Loss recognized in other comprehensive income (loss), net of tax ​ ​ ( 3,220 ) ​ ​ ( 239 ) Benefit reclassified from accumulated other comprehensive loss to interest expense, net ​ ​ 900 ​ ​ 463 ​ Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and other regulatory bodies that are adopted as of the specified effective dates. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on our Consolidated Financial Statements upon adoption. There were no new pronouncements adopted in the first quarter of fiscal year 2026. Accounting Guidance Not Yet Adopted In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid to or received from federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. We are evaluating the potential impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements which is effective beginning with our Form 10-K for fiscal year 2026. 10 Table of Contents In November 2024, the FASB issued a new standard to expand disclosures about income statement expenses. The guidance requires disaggregation of certain costs and expenses included in each relevant expense caption on our consolidated income statements in a separate note to the financial statements at each interim and annual reporting period, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The standard will be effective for us beginning with our Form 10-K for fiscal year 2028 and interim periods thereafter, with early adoption permitted. We are currently evaluating the impact of this standard on our disclosures. In September 2025, the FASB issued Accounting Standards Update 2025-06 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”) which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this standard on our accounting for internal-use software and related disclosure requirements. 2. Business Combinations Under Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”), the acquisition method of accounting requires us to record assets acquired less liabilities assumed from an acquisition at their estimated fair values at the date of acquisition. Any excess of the total estimated purchase price over the estimated fair value of the net assets acquired 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 on assumptions which are 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 for fair value, which is up to one year from the acquisition date, as additional information that existed at the acquisition date becomes available, we may record adjustments to the preliminary assets acquired and liabilities assumed. Upon the conclusion of the measurement period, any subsequent adjustments are included in earnings. Fiscal Year 2025 Business Acquisitions In September 2024, we (through our Security division) acquired 100 % of the shares of common stock of a privately held provider of critical military, space and surveillance solutions to expand our customer base and offer additional products and services for existing customers, for approximately $ 76.0 million, plus up to $ 24.0 million in potential contingent consideration. We paid $ 75.5 million in cash at the closing of the transaction and recorded a holdback liability of $ 0.5 million which is expected to be released in 2030. The cash paid for this acquisition was financed with borrowings from our credit facility. The acquisition date fair value of the contingent consideration was $ 9.7 million, which, when combined with the amount of cash paid at close and the holdback amount, resulted in total purchase consideration of $ 85.7 million being allocated to the preliminary fair value of assets acquired and liabilities assumed. The acquisition date fair value of total assets acquired, including measurement period adjustments, was $ 113.9 million which comprised accounts receivable of $ 26.1 million, inventory and other current assets of $ 2.7 million, property and equipment of $ 7.0 million, goodwill of $ 30.7 million, other intangible assets of $ 47.3 million and other noncurrent assets of $ 0.1 million. Goodwill includes the value of the assembled workforce, new customers and other future economic benefits which do not qualify for separate recognition. The goodwill recognized for this business acquisition is not deductible for income tax purposes. Other intangible assets include amortizable intangible assets of $ 36.7 million with amortization periods of 7 to 10 years and an indefinite-lived intangible asset of $ 8.1 million. The acquisition date fair value of total liabilities assumed, including measurement period adjustments, was $ 28.2 million, which includes a deferred tax liability of $ 7.3 million that was recognized primarily due to the acquisition of other intangible assets. During the three months ended September 30, 2025, we recorded measurement period adjustments which decreased goodwill by $ 1.4 million due to a decrease in deferred income taxes of $ 1.8 million and an increase in intangible assets of $ 0.1 million, which were partially offset by a decrease in accounts receivable of $ 0.5 million. The measurement period adjustments did not have a significant impact on the consolidated statement of operations. In April 2025, we (through our Security Division) acquired a privately held provider of engineering and structural component services for approximately $ 1.3 million, plus up to $ 0.9 million in potential contingent consideration. The acquisition was financed with cash on hand. The goodwill recognized for this business acquisition is not deductible for income tax purposes. 11 Table of Contents 3. Balance Sheet Details ​ The following tables set forth details of selected balance sheet accounts (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, Accounts receivable, net 2025 2025 Accounts receivable ​ $ 855,494 ​ $ 847,205 Less allowance for doubtful accounts ​ ( 17,751 ) ​ ​ ( 18,974 ) Total ​ $ 837,743 ​ $ 828,231 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, Inventories 2025 2025 Raw materials ​ $ 245,993 ​ $ 259,779 Work-in-process ​ 72,124 ​ ​ 95,346 Finished goods ​ 89,057 ​ ​ 98,909 Total ​ $ 407,174 ​ $ 454,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, Property and equipment, net 2025 2025 Land ​ $ 16,087 ​ $ 16,075 Buildings, civil works and improvements ​ 55,559 ​ ​ 57,290 Leasehold improvements ​ 14,636 ​ ​ 14,433 Equipment, tooling, furniture and fixtures ​ 158,411 ​ ​ 156,284 Computer equipment ​ 24,092 ​ ​ 25,385 Computer software ​ 30,954 ​ ​ 31,077 Computer software implementation in process ​ ​ 4,472 ​ ​ 4,707 Construction in process ​ 7,370 ​ ​ 7,765 Total ​ 311,581 ​ ​ 313,016 Less accumulated depreciation and amortization ​ ( 184,834 ) ​ ​ ( 184,758 ) Property and equipment, net ​ $ 126,747 ​ $ 128,258 ​ Depreciation and amortization expense for property and equipment was $ 6.7 million and $ 5.4 million, respectively, for the three months ended September 30, 2024 and 2025. ​ 4. Goodwill and Intangible Assets ​ The changes in the carrying value of goodwill by segment for the three-month period ended September 30, 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Optoelectronics ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ Security ​ Manufacturing ​ Healthcare ​ ​ ​ ​ Division Division Division Consolidated Balance as of June 30, 2025 ​ $ 266,365 ​ $ 72,323 ​ $ 48,705 ​ $ 387,393 Goodwill adjustments during the period (see Note 2) ​ ( 1,306 ) ​ ​ — ​ ​ — ​ ​ ( 1,306 ) Foreign currency translation adjustment ​ 34 ​ ​ ( 621 ) ​ ​ ( 65 ) ​ ​ ( 652 ) Balance as of September 30, 2025 ​ $ 265,093 ​ ​ 71,702 ​ ​ 48,640 ​ ​ 385,435 ​ 12 Table of Contents Intangible assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ September 30, 2025 ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ ​ ​ ​ ​ Carrying ​ Accumulated ​ Intangibles ​ Carrying ​ Accumulated ​ Intangibles ​ Value Amortization Net Value Amortization Net Amortizable assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Software development costs ​ $ 91,386 ​ $ ( 8,941 ) ​ $ 82,445 ​ $ 95,553 ​ $ ( 9,594 ) ​ $ 85,959 Patents ​ ​ 9,617 ​ ​ ( 4,353 ) ​ ​ 5,264 ​ ​ 9,576 ​ ​ ( 4,321 ) ​ ​ 5,255 Developed technology ​ ​ 99,937 ​ ​ ( 55,865 ) ​ ​ 44,072 ​ ​ 100,013 ​ ​ ( 58,586 ) ​ ​ 41,427 Customer relationships ​ ​ 20,991 ​ ​ ( 9,380 ) ​ ​ 11,611 ​ ​ 18,403 ​ ​ ( 8,044 ) ​ ​ 10,359 Total amortizable assets ​ 221,931 ​ ​ ( 78,539 ) ​ ​ 143,392 ​ ​ 223,545 ​ ​ ( 80,545 ) ​ ​ 143,000 Non-amortizable assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trademarks ​ 39,898 ​ ​ — ​ ​ 39,898 ​ ​ 39,894 ​ ​ — ​ ​ 39,894 Total intangible assets ​ $ 261,829 ​ $ ( 78,539 ) ​ $ 183,290 ​ $ 263,439 ​ $ ( 80,545 ) ​ $ 182,894 ​ Amortization expense related to intangible assets was $ 4.8 million and $ 4.9 million for the three months ended September 30, 2024 and 2025, respectively. ​ At September 30, 2025, the estimated future amortization expense for amortizable intangible assets was as follows (in thousands): ​ Fiscal Year ​ ​ ​ ​ ​ 2026 (remaining 9 months) $ 13,103 2027 ​ 14,817 2028 ​ 14,586 2029 ​ 14,318 2030 ​ ​ 13,092 Thereafter ​ 73,084 Total ​ $ 143,000 ​ 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 each of the three month periods ended September 30, 2024 and 2025, we capitalized software development costs of $ 4.2 million. 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 Topic 606, Revenue from Contracts with Customers (“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 in either Other accrued expenses and current liabilities or Other long-term liabilities. We recognize these contract liabilities as sales after all revenue recognition criteria are met. ​ 13 Table of Contents The table below shows the balance of contract assets and liabilities as of June 30, 2025 and September 30, 2025, including the change between such dates. There were no substantial non-current contract assets for the periods presented. Contract Assets (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, September 30, ​ ​ ​ ​ 2025 2025 Change % Change Unbilled revenue (included in accounts receivable, net) ​ $ 242,742 ​ $ 183,408 ​ $ ( 59,334 ) ​ ( 24 ) % Contract Liabilities (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, September 30, ​ ​ ​ 2025 2025 Change % Change ​ Advances from customers ​ $ 68,184 ​ $ 79,287 ​ $ 11,103 ​ 16 % Deferred revenue—current ​ 77,788 ​ ​ 75,165 ​ ​ ( 2,623 ) ​ ( 3 ) % Deferred revenue—long-term ​ 18,856 ​ ​ 18,619 ​ ​ ( 237 ) ​ ( 1 ) % ​ Contract Assets. Contract assets decreased by approximately $ 59.3 million primarily due to achievement of certain milestones in our Security division giving us the right to invoice customers. ​ Remaining Performance Obligations . Remaining performance obligations related to ASC 606 represent the portion of the 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 September 30, 2025, the portion of the transaction price allocated to remaining performance obligations was approximately $ 875.6 million. We expect to recognize revenue on approximately 55 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter. During the three months ended September 30, 2025, we recognized revenue of $ 36.7 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 separate performance obligations. 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 September 30, ​ 2024 2025 Operating lease cost ​ $ 2,813 ​ $ 3,457 Variable lease cost ​ ​ 194 ​ ​ 286 Short-term lease cost ​ ​ 497 ​ ​ 269 ​ ​ $ 3,504 ​ $ 4,012 ​ 14 Table of Contents Supplemental disclosures related to operating leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Category June 30, 2025 September 30, 2025 ​ Operating lease right of use (“ROU”) assets, net Other assets ​ $ 32,040 ​ $ 30,289 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities, current portion Other accrued expenses and current liabilities ​ $ 11,712 ​ $ 11,750 ​ Operating lease liabilities, long-term Other long-term liabilities ​ ​ 20,977 ​ ​ 19,161 ​ Total operating lease liabilities ​ ​ ​ $ 32,689 ​ $ 30,911 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ ​ ​ ​ ​ ​ ​ 3.3 years ​ Weighted average discount rate ​ ​ ​ ​ ​ ​ ​ 5.2 % ​ Supplemental cash flow information related to operating leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ 2024 2025 Cash paid for operating lease liabilities ​ $ 2,895 ​ $ 3,318 ROU assets obtained in exchange for new lease obligations ​ 252 ​ ​ 308 ​ Maturities of operating lease liabilities at September 30, 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ September 30, 2025 Less than one year ​ $ 12,981 1 – 2 years ​ 10,552 2 – 3 years ​ 4,513 3 – 4 years ​ 2,663 4 – 5 years ​ 1,092 Thereafter ​ 1,452 ​ ​ 33,253 Less: imputed interest ​ ( 2,342 ) Total lease liabilities ​ $ 30,911 ​ ​ 7. Restructuring and Other Charges ​ We endeavor to align our global capacity and infrastructure with demand by our customers and to effectively integrate acquisitions and thereby improve our operational efficiency. ​ During the three months ended September 30, 2025, we recognized $ 2.7 million in restructuring and other charges, which included $ 2.4 million primarily for non-recurring charges in the Security and Healthcare divisions and $ 0.3 million for employee terminations. ​ During the three months ended September 30, 2024, we recognized $ 1.2 million in restructuring and other charges, which included $ 0.6 million in employee terminations, $ 0.2 million for facility closure costs for operational efficiency activities, and $ 0.4 million in acquisition related costs. The following tables summarize restructuring and other charges for the periods set forth below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2024 ​ ​ ​ ​ ​ Optoelectronics and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Manufacturing ​ Healthcare ​ ​ ​ ​ ​ ​ ​ Security Division Division Division Corporate Total Acquisition-related costs ​ $ 350 ​ $ — ​ $ — ​ $ — ​ $ 350 Employee termination costs ​ 123 ​ 304 ​ 152 ​ — ​ 579 Facility closures/consolidation ​ 6 ​ 243 ​ — ​ — ​ 249 Total ​ $ 479 ​ $ 547 ​ $ 152 ​ $ — ​ $ 1,178 ​ 15 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2025 ​ ​ ​ ​ ​ Optoelectronics and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Manufacturing ​ Healthcare ​ ​ ​ ​ ​ ​ ​ Security Division Division Division Corporate Total Acquisition-related costs ​ $ 22 ​ $ — ​ $ — ​ $ — ​ $ 22 Employee termination costs ​ ​ 163 ​ ​ 27 ​ ​ 110 ​ ​ — ​ ​ 300 Other ​ 2,173 ​ — ​ 221 ​ 14 ​ 2,408 Total ​ $ 2,358 ​ $ 27 ​ $ 331 ​ $ 14 ​ $ 2,730 ​ 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 three-month period ended September 30, 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Facility ​ ​ ​ ​ ​ ​ ​ Acquisition- ​ Employee ​ Closure/ ​ Legal ​ ​ ​ ​ ​ Related ​ Termination ​ Consolidation ​ and Other ​ ​ ​ ​ Costs Costs Cost Costs Total Balance as of June 30, 2025 ​ $ — ​ $ 445 ​ $ 623 ​ $ 1,717 ​ $ 2,785 Restructuring and other charges ​ 21 ​ ​ 300 ​ ​ — ​ 2,409 ​ ​ 2,730 Payments, adjustments and reimbursements, net ​ ( 21 ) ​ ​ ( 496 ) ​ ​ ( 493 ) ​ ( 65 ) ​ ​ ( 1,075 ) Balance as of September 30, 2025 ​ $ — ​ $ 249 ​ $ 130 ​ $ 4,061 ​ $ 4,440 ​ ​ 8. Borrowings ​ Revolving Credit Facility ​ In July 2025 we amended and extended our revolving credit facility, now maturing in July 2030, to increase the limit from $ 600 million to $ 725 million and replaced the $ 128.1 million term loan with a $ 100.0 million term loan which were accounted for as a debt modification. 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. Under certain circumstances and subject to certain conditions, we have the ability to increase the revolving credit facility by an amount equal to the greater of $ 300 million or such amount as would not cause our secured leverage ratio to exceed a specified level. Other enhancements include the permitted securitization of certain qualifying assets of up to $ 100 million. Borrowings under the facility bore interest at SOFR plus a margin of 1.25 % as of September 30, 2025 (which margin can range from 1.0 % to 1.75 % based on our consolidated net leverage ratio as defined in the credit facility). 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 0.15 % as of September 30, 2025 (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 September 30, 2025, there were $ 252.1 million of borrowings outstanding under the revolving credit facility, $ 95.4 million outstanding under the letters of credit sub-facility, and $ 98.8 million outstanding under the term loan. As of September 30, 2025, the amount available to borrow under the revolving credit facility was $ 377.5 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 September 30, 2025, we were in compliance with all financial covenants under this credit facility. In September 2022, we entered into an interest rate swap agreement in order to mitigate the interest rate risk on a portion of the interest payments expected to be made on the borrowings outstanding under the revolving credit facility and term loan. Refer to Note 1 for further information relating to the interest rate swap agreement. 16 Table of Contents 2.25 % Convertible Senior Notes Due 2029 ​ In July 2024, we issued an aggregate of $ 350.0 million principal amount of 2.25 % convertible senior notes due in August 2029 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, at an issuance price equal to 97.5 % of the principal amount. The 2029 Notes were issued pursuant to and are governed by an indenture dated July 19, 2024. The proceeds from the issuance of the 2029 Notes were $ 340.4 million, net of the issuance discount and debt issuance costs. The 2029 Notes are unsecured obligations which bear regular interest at 2.25 % per annum payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2025. The 2029 Notes will mature on August 1, 2029, unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The 2029 Notes are convertible into a combination of cash and shares of our common stock, at an initial conversion rate of 5.2090 shares of common stock per $1,000 principal amount of 2029 Notes, which is equivalent to an initial conversion price of approximately $ 191.98 per share of our common stock. The default settlement method is a combination settlement with a specified dollar amount of $ 1,000 per $1,000 principal amount of notes. The conversion rate is subject to customary adjustments for certain dilutive events. We may redeem for cash all or any portion of the 2029 Notes, at our option, on or after August 6, 2027 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 at a redemption price equal to 100 % of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest up to the day before the redemption date. The holders of the 2029 Notes may require us to repurchase the 2029 Notes upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2029 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date. Holders of the 2029 Notes may, at their option, convert all or a portion of their 2029 Notes prior to May 1, 2029, in multiples of $1,000 principal amounts, only (i) during any calendar quarter if our common stock price exceeds 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter, (ii) during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day, (iii) upon the occurrence of specified corporate events or certain distributions on our common stock; or (iv) if we call any or all of the 2029 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called for redemption. On or after May 1, 2029, the 2029 Notes are convertible by the holders thereof at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2029 Notes who convert the 2029 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2029 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate. We accounted for the issuance of the 2029 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives. The following table is a summary of the 2029 Notes as of September 30, 2025 (in thousands): ​ ​ ​ ​ ​ ​ September 30, ​ ​ 2025 Principal amount ​ $ 350,000 Unamortized debt discount and issuance costs ​ ( 7,318 ) Net carrying amount ​ $ 342,682 ​ ​ ​ ​ Fair value (Level 2) ​ $ 505,974 ​ The 2029 Notes were not eligible for conversion as of September 30, 2025. No sinking fund is provided for the 2029 Notes, which means that we are not required to redeem or retire them periodically. As of September 30, 2025 we were in compliance with applicable covenants under the indenture governing the 2029 Notes. 17 Table of Contents For the three months ended September 30, 2025, total interest expense for the 2029 Notes was $ 2.4 million (comprised of $ 2.0 million of contractual interest expense and $ 0.4 million of amortization of debt discount and issuance costs) compared with total interest expense for the 2029 Notes of $ 1.9 million (comprised of $ 1.6 million of contractual interest expense and $ 0.3 million of amortization of debt discount and issuance costs) for the three months ended September 30 2024. The unamortized debt issuance cost is amortized on the effective interest method over the life of the 2029 Notes. 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 September 30, 2025, $ 59.9 million was outstanding under these letter-of-credit facilities. As of September 30, 2025, the total amount available under these credit facilities was $ 35.6 million. ​ Long-term debt consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, ​ 2025 2025 Term loan ​ $ 128,125 ​ $ 98,750 2029 Notes, net ​ ​ 342,231 ​ ​ 342,682 Other long-term debt ​ 1,278 ​ ​ 791 ​ ​ 471,634 ​ ​ 442,223 Less current portion of long-term debt ​ ( 8,130 ) ​ ​ ( 5,379 ) Long-term portion of debt ​ $ 463,504 ​ $ 436,844 ​ Future principal payments of long-term debt by fiscal year as of September 30, 2025 are as follows (in thousands): ​ ​ ​ ​ ​ 2026 (9 months remaining) $ 4,129 2027 ​ 5,263 2028 ​ 5,120 2029 ​ 5,021 2030 ​ ​ 347,690 2031 and thereafter ​ 75,000 Total ​ $ 442,223 ​ ​ 9. Stockholders’ Equity ​ Stock-based Compensation ​ As of September 30, 2025, 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 September 30, ​ 2024 2025 Cost of goods sold ​ $ 244 ​ $ 285 Selling, general and administrative ​ ​ 6,024 ​ ​ 5,753 Research and development ​ ​ 154 ​ ​ 161 Stock-based compensation expense ​ $ 6,422 ​ $ 6,199 ​ As of September 30, 2025, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 0.9 million for stock options and $ 19.9 million for restricted stock units (“RSUs”). We expect to recognize these costs over a weighted average period of 1.8 years with respect to the stock options and 2.2 years with respect to the RSUs. ​ 18 Table of Contents The following summarizes stock option activity during the three months ended September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Weighted-Average ​ Aggregate ​ ​ Number of ​ Exercise ​ Remaining Contractual ​ Intrinsic Value ​ Options Price Term (in thousands) Outstanding at June 30, 2025 60,253 $ 121.41 ​ ​ ​ ​ Granted — ​ ​ — ​ ​ ​ ​ ​ Exercised ( 2,215 ) ​ ​ 98.27 ​ ​ ​ ​ ​ Expired or forfeited — ​ ​ — ​ ​ ​ ​ ​ Outstanding at September 30, 2025 58,038 ​ $ 122.29 ​ 7.7 years ​ $ 7,368 Exercisable at September 30, 2025 ​ 20,387 ​ $ 95.92 6.5 years ​ $ 3,126 ​ The following summarizes RSU award activity during the three months ended September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ Shares Fair Value Nonvested at June 30, 2025 355,396 ​ $ 116.34 Granted 213,773 ​ ​ 223.88 Vested ( 313,580 ) ​ ​ 165.91 Forfeited ( 1,507 ) ​ ​ 110.42 Nonvested at September 30, 2025 254,082 ​ $ 145.67 ​ As of September 30, 2025, there were approximately 1.6 million shares available for grant under the OSI Plan. Under the terms of the OSI Plan, RSUs granted from the pool of shares available for grant reduce the pool by 1.87 shares for each award granted. RSUs forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited. ​ We granted 54,563 and 48,185 performance-based RSUs during the three months ended September 30, 2024 and 2025, 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 280 % 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 ​ In September 2022, our Board of Directors increased the stock repurchase authorization to a total of 2 million shares. This program does not expire unless our Board of Directors acts to terminate the program. The timing and actual numbers of shares to be purchased under this program will depend 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, with the excess purchase price over par value recorded as a reduction of additional paid-in capital. If additional paid-in capital were to be reduced to zero, we would record the remainder of the excess purchase price over par value as a reduction of retained earnings. ​ During the three months ended September 30, 2025, we did no t repurchase any shares of common stock. As of September 30, 2025, there were 1,190,556 shares remaining available for repurchase under the authorized repurchase program. ​ Dividends ​ We have not paid any dividends since the consummation of our initial public offering in 1997 and we do not currently intend to pay any dividends in the foreseeable future. Our Board of Directors will determine the payment of future dividends, if any. Certain of our current bank credit facilities restrict the payment of dividends and future borrowings may contain similar restrictions. ​ 19 Table of Contents 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 obligations, the remaining maximum amount of such potential future payments is $ 42.8 million as of September 30, 2025. ​ Projections and estimated 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, 2025 to September 30, 2025 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, 2025 $ 19,086 Foreign currency translation adjustment ​ ​ ( 42 ) Changes in fair value for contingent earnout obligations ​ ( 2,713 ) Payments on contingent earnout obligations ​ ( 486 ) Ending fair value, September 30, 2025 ​ $ 15,845 ​ Guarantees ​ We are periodically required to provide performance bonds to do business with certain customers. These arrangements are common in the industry and generally have terms ranging between one year and ten years . The bonds are provided by various bonding agencies. However, we are ultimately liable for claims that may occur against them. As of June 30, 2025 and September 30, 2025, we had a maximum financial exposure related to performance bonds of approximately $ 104 million and $ 105 million, respectively. As described in Note 8, we and several of our foreign subsidiaries have issued letters of credit under the revolving credit facility and international bank facilities. These letters of credit are issued to protect various customers, suppliers and government agencies under contractual arrangements and regulatory requirements. We have no history of significant claims and there are no pending matters that would require us to perform under any of these arrangements, and we believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the consolidated financial statements. Accordingly, no liability for any of these arrangements has been recorded as of June 30, 2025 and September 30, 2025. ​ Environmental Contingencies ​ We are subject to various environmental laws. We 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 ​ 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 a breach 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 amount under these indemnification agreements due to, among other factors, 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 September 30, 2025. 20 Table of Contents 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. ​ The following table presents changes in warranty provisions (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ 2024 2025 Balance at beginning of period ​ $ 11,089 ​ $ 11,612 Additions ​ ​ 988 ​ ​ 450 Reductions for warranty repair costs and adjustments ​ ( 719 ) ​ ​ ( 1,498 ) Balance at end of period ​ $ 11,358 ​ $ 10,564 ​ Legal Proceedings We are involved in potential or actual claims, litigation and other 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 non-ordinary course 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 September 30, 2024 and 2025 were 21.9 % and 19.9 %, respectively. During the three months ended September 30, 2024 and 2025, we recognized a net discrete tax benefit of $ 0.5 million and $ 0.9 million, respectively, related to equity-based compensation under ASU 2016-09 and changes in prior-year estimates and uncertain tax positions. ​ 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. We are evaluating the financial impact of OBBBA, which is in effect for the current fiscal year ending June 30, 2026. The legislation will affect the timing and recognition of certain deductions, which, if implemented, could impact our effective tax rate and deferred tax balances in future periods. ​ 21 Table of Contents 12. Segment Information ​ We operate in three identifiable industry segments: (a) security and inspection systems (Security division), (b) optoelectronic devices and manufacturing (Optoelectronics and Manufacturing division) and (c) medical monitoring systems (Healthcare 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. We disclose segment income (loss) from operations as our measure of segment profit/loss, reconciled to consolidated income (loss) from operations. The measure of segment income (loss) from operations excludes restructuring and other charges presented below which are presented to reconcile to consolidated income from operations. Business segment disclosures consider information used by/provided to our chief operating decision maker (“CODM”). Our Chief Executive Officer serves as the CODM. The CODM uses segment income (loss) from operations, as well as the expenses within each segment including cost of sales, selling, general and administrative expenses and research and development expenses, to allocate resources to segments in the budgeting and forecasting process along with periodic ongoing reviews of results and overall activity in the markets where each segment operates. The following tables present our results of operations and identifiable assets by our three industry segments, along with amounts for Corporate/Eliminations, which are reconciled to consolidated amounts (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2024 ​ ​ ​ ​ ​ Optoelectronics ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Security ​ Manufacturing ​ Healthcare ​ Corporate/ ​ ​ ​ ​ Division Division Division Eliminations Consolidated Revenues (1): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ External customer revenue ​ $ 224,314 ​ $ 82,591 ​ $ 37,102 ​ $ — ​ $ 344,007 Revenue between segments ​ — ​ 15,204 ​ — ​ ( 15,204 ) ​ — Total revenues ​ 224,314 ​ 97,795 ​ 37,102 ​ ( 15,204 ) ​ 344,007 Cost of goods sold ​ 142,300 ​ 76,739 ​ 18,243 ​ ( 14,777 ) ​ 222,505 Selling, general and administrative expenses ​ 40,414 ​ 8,606 ​ 13,693 ​ 9,510 ​ 72,223 Research and development expenses ​ 12,265 ​ 1,294 ​ 4,214 ​ — ​ 17,773 Segment income (loss) from operations ​ 29,335 ​ 11,156 ​ 952 ​ ( 9,937 ) ​ 31,506 Restructuring and other charges ​ 479 ​ 547 ​ 152 ​ — ​ 1,178 Income (loss) from operations ​ $ 28,856 ​ $ 10,609 ​ $ 800 ​ $ ( 9,937 ) ​ $ 30,328 Capital expenditures ​ $ 5,470 ​ $ 1,056 ​ $ 383 ​ $ 796 ​ $ 7,705 Depreciation and amortization ​ $ 7,835 ​ $ 1,945 ​ $ 1,270 ​ $ 400 ​ $ 11,450 ​ 22 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2025 ​ ​ ​ ​ ​ Optoelectronics ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Security ​ Manufacturing ​ Healthcare ​ Corporate/ ​ ​ ​ ​ Division Division Division Eliminations Consolidated Revenues (1): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ External customer revenue ​ $ 254,248 ​ $ 89,632 ​ $ 40,743 ​ $ — ​ $ 384,623 Revenue between segments ​ — ​ 19,829 ​ — ​ ( 19,829 ) ​ — Total revenues ​ 254,248 ​ 109,461 ​ 40,743 ​ ( 19,829 ) ​ 384,623 Cost of goods sold ​ 173,345 ​ 86,514 ​ 20,143 ​ ( 18,564 ) ​ 261,438 Selling, general and administrative expenses ​ 36,109 ​ 8,957 ​ 13,060 ​ 8,829 ​ 66,955 Research and development expenses ​ 13,828 ​ 1,237 ​ 5,362 ​ — ​ 20,427 Segment income (loss) from operations ​ 30,966 ​ 12,753 ​ 2,178 ​ ( 10,094 ) ​ 35,803 Restructuring and other charges ​ 2,357 ​ 27 ​ 332 ​ 14 ​ 2,730 Income (loss) from operations ​ $ 28,609 ​ $ 12,726 ​ $ 1,846 ​ $ ( 10,108 ) ​ $ 33,073 Capital expenditures ​ $ 3,562 ​ $ 1,595 ​ $ 1,207 ​ $ 664 ​ $ 7,028 Depreciation and amortization ​ $ 6,927 ​ $ 1,681 ​ $ 1,167 ​ $ 485 ​ $ 10,260 (1) For the three months ended September 30, 2024, one Security division customer accounted for 14 % of consolidated net revenues. For the three months ended September 30, 2025, no customer accounted for 10% or more of the Company’s consolidated net revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ September 30, ​ 2025 2025 Assets (1) —by Segment: ​ ​ ​ ​ ​ ​ Security division ​ $ 1,608,985 ​ $ 1,637,446 Optoelectronics and Manufacturing division ​ 300,405 ​ ​ 290,831 Healthcare division ​ ​ 270,428 ​ ​ 270,883 Corporate/Eliminations (2) ​ 61,439 ​ ​ 99,996 Total ​ $ 2,241,257 ​ $ 2,299,156 (1) As of June 30, 2025 and September 30, 2025, one customer in the Security division accounted for 42 % and 44 % of accounts receivable, net, respectively. (2) 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. ​ 23 Table of Contents