What changed in this filing

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Item 1. Financial Statements

2025-05-02 compared with 2025-01-24 · 128 added, 120 removed, 510 unchanged (33% of the section changed)

28 unchanged sentences

Common stock, $ 0.001 par value— 100,000,000 shares authorized;

issued and outstanding, 17,055,497 shares at June 30, 2024 and 16,745,805 shares at December 31, 2024

issued and outstanding, 17,055,497 shares at June 30, 2024 and 16,788,617 shares at March 31, 2025

Retained earnings

7 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Net revenues:

18 unchanged sentences

(amounts in thousands)

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Other comprehensive income (loss):

9 unchanged sentences

(amounts in thousands, except share data)

Three Months Ended December 31, 2023

Three Months Ended March 31, 2024

Comprehensive

Balance—September 30, 2023

Balance—December 31, 2023

Exercise of stock options

Vesting of RSUs

Shares issued under employee stock purchase program

Stock-based compensation expense

Taxes paid related to net share settlement of equity awards

Other comprehensive income

Balance—December 31, 2023

Three Months Ended December 31, 2024

Other comprehensive loss

Balance—March 31, 2024

Three Months Ended March 31, 2025

Comprehensive

Balance—September 30, 2024

Balance—December 31, 2024

Exercise of stock options

Vesting of RSUs

Shares issued under employee stock purchase program

Stock-based compensation expense

Taxes paid related to net share settlement of equity awards

Other comprehensive loss

Balance—December 31, 2024

Other comprehensive income

Balance—March 31, 2025

OSI SYSTEMS, INC.

2 unchanged sentences

(amounts in thousands, except share data)

Six Months Ended December 31, 2023

Nine Months Ended March 31, 2024

Comprehensive

2 unchanged sentences

Vesting of RSUs

Shares issued under employee stock purchase plan

Shares issued under employee stock purchase program

Stock-based compensation expense

Taxes paid related to net share settlement of equity awards

Other comprehensive income

Balance—December 31, 2023

Six Months Ended December 31, 2024

Other comprehensive loss

Balance—March 31, 2024

Nine Months Ended March 31, 2025

Comprehensive

7 unchanged sentences

Other comprehensive loss

Balance—December 31, 2024

Balance—March 31, 2025

OSI SYSTEMS, INC.

2 unchanged sentences

(amounts in thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

46 unchanged sentences

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.

Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for audited annual financial statements.

In management’s opinion, 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, 2024 filed with the SEC.

The results of operations for the three and six months ended December 31, 2024 are not necessarily indicative of the operating results to be expected for the full 2025 fiscal year or any future periods.

The results of operations for the three and nine months ended March 31, 2025 are not necessarily indicative of the operating results to be expected for the full 2025 fiscal year or any future periods.

Use of Estimates

8 unchanged sentences

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 no dilutive effect of the 2029 Notes for the three and six months ended December 31, 2024.

There was no dilutive effect of the 2029 Notes for the three and nine months ended March 31, 2025 as the average price of our common stock was below the conversion price for each of the quarterly periods in fiscal year 2025.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Net income available to common stockholders

7 unchanged sentences

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 $ 101.6 million at December 31, 2024.

Our cash and cash equivalents totaled $ 95.8 million at March 31, 2025.

Of this amount, approximately 83 % 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 and to a lesser extent in Malaysia, Singapore, and Canada, among other countries.

These foreign funds were held primarily by our subsidiaries in India, the United Kingdom and to a lesser extent in Singapore, Canada, and Malaysia among other countries.

We have cash holdings in financial institutions that exceed insured limits for such financial institutions;

5 unchanged sentences

The fair value of the 2029 Notes are based on observable inputs described below under Level 2.

The fair values of our foreign currency forward contracts were not significant as of June 30, 2024 and December 31, 2024.

The fair values of our foreign currency forward contracts were not significant as of June 30, 2024 and March 31, 2025.

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.

5 unchanged sentences

June 30, 2024

December 31, 2024

March 31, 2025

Assets—Insurance company contracts

4 unchanged sentences

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.

Our foreign currency forward contracts are utilized to partially mitigate certain balance sheet exposures from short-term foreign currency fluctuations.

These contracts have original maturities of up to three months.

3 unchanged sentences

The net gains or losses from our foreign currency forward contracts, which are not designated as hedge instruments, are reported in our consolidated statements of operations.

The amounts reported in the consolidated statements of operations for the three and six months ended December 31, 2023 and 2024 were not significant.

The amounts reported in the consolidated statements of operations for the three and nine months ended March 31, 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, 2024 and December 31, 2024, we held foreign currency forward contracts with notional amounts totaling $ 96.4 million and $ 79.4 million, respectively.

Unrealized gains and losses from our foreign currency forward contracts as of June 30, 2024 and December 31, 2024 were not significant.

As of June 30, 2024 and March 31, 2025, we held foreign currency forward contracts with notional amounts totaling $ 96.4 million and $ 37.4 million, respectively.

Unrealized gains and losses from our foreign currency forward contracts as of June 30, 2024 and March 31, 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.

2 unchanged sentences

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, 2024 and December 31, 2024, 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 contract as of as of June 30, 2024 and December 31, 2024 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 (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

As of June 30, 2024 and March 31, 2025, the notional amount of the interest rate swap hedge derivative instrument was $ 175 million.

The fair value of the interest rate swap agreement as of June 30, 2024 and March 31, 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 March 31,

Nine Months Ended March 31,

Total interest and other expense, net presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded

4 unchanged sentences

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 six months of fiscal year 2025.

There were no new pronouncements adopted in the first nine months of fiscal year 2025.

In November 2023, the FASB issued Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis.

2 unchanged sentences

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 the income tax rate reconciliations and income taxes paid.

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.

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.

2 unchanged sentences

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.

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.

Business Combinations

17 unchanged sentences

The preliminary valuation of the assets acquired, liabilities assumed and contingent consideration in the acquisition is subject to revision.

During the three months ended December 31, 2024, we recorded measurement period adjustments which increased goodwill by $ 3.3 million due to a decrease in net working capital of $ 4.2 million, net of deferred income taxes of $ 0.9 million.

The measurement period adjustments did not have an impact on the consolidated statement of operations.

During the nine months ended March 31, 2025, we recorded measurement period adjustments which increased goodwill by $ 3.1 million due to a decrease in net working capital of $ 4.4 million and an increase in deferred income taxes of $ 1.0 million, which were partially offset by an increase in intangible assets of $ 2.3 million.

The measurement period adjustments did not have a significant impact on the consolidated statement of operations.

If additional information becomes available, we may further revise the preliminary purchase price allocation as soon as practical, but no later than one year from the acquisition date.

Revenue from this acquired business was $ 21.7 million from the acquisition date through December 31, 2024.

Revenue from this acquired business was $ 50.7 million from the acquisition date through March 31, 2025.

Fiscal Year 2024 Business Acquisitions

6 unchanged sentences

Balance Sheet Details

The following tables set forth details of selected balance sheet accounts (in thousands):

Accounts receivable, net

4 unchanged sentences

Finished goods

The following tables set forth details of selected balance sheet accounts (in thousands):

Property and equipment, net

9 unchanged sentences

Property and equipment, net

Depreciation and amortization expense for property and equipment was $ 4.6 million and $ 5.0 million for the three months ended December 31, 2023 and 2024, respectively, and $ 9.5 million and $ 11.7 million for the six months ended December 31, 2023 and 2024, respectively.

Depreciation and amortization expense for property and equipment was $ 5.1 million and $ 5.0 million for the three months ended March 31, 2024 and 2025, respectively, and $ 14.6 million and $ 16.7 million for each of the nine months ended March 31, 2024 and 2025.

Goodwill and Intangible Assets

The changes in the carrying value of goodwill by segment for the six-month period ended December 31, 2024 were as follows (in thousands)

The changes in the carrying value of goodwill by segment for the nine-month period ended March 31, 2025 were as follows (in thousands):

Optoelectronics

3 unchanged sentences

Foreign currency translation adjustment

Balance as of December 31, 2024

Balance as of March 31, 2025

Intangible assets consisted of the following (in thousands):

June 30, 2024

December 31, 2024

March 31, 2025

Amortizable assets:

5 unchanged sentences

Total intangible assets

Amortization expense related to intangible assets was $ 5.7 million and $ 5.6 million for the three months ended December 31, 2023 and 2024, respectively.

Amortization expense related to intangible assets was $ 10.4 million for each of the six-month periods ended December 31, 2023 and 2024.

During the six months ended December 31, 2024, intangible assets of $ 43.9 million were from the business acquisition described in Note 2.

At December 31, 2024, the estimated future amortization expense for intangible assets was as follows (in thousands):

Amortization expense related to intangible assets was $ 5.5 million and $ 5.6 million for the three months ended March 31, 2024 and 2025, respectively.

For each of the nine months ended March 31, 2024 and 2025, amortization expense related to intangible assets was $ 15.9 million.

During the nine months ended March 31, 2025, intangible assets of $ 46.2 million were from the business acquisition described in Note 2.

At March 31, 2025, the estimated future amortization expense for intangible assets was as follows (in thousands):

2025 (remaining 3 months)

4 unchanged sentences

Amortizable assets that have not yet begun to be amortized are included in Thereafter in the table above.

For the three months ended December 31, 2023 and 2024, we capitalized software development costs in the amounts of $ 4.0 million and $ 4.6 million, respectively.

For the six months ended December 31, 2023 and 2024, we capitalized software development costs in the amounts of $ 8.0 million and $ 8.8 million, respectively.

For the three months ended March 31, 2024 and 2025, we capitalized software development costs in the amounts of $ 4.3 million and $ 4.2 million, respectively.

For the nine months ended March 31, 2024 and 2025, we capitalized software development costs in the amounts of $ 12.3 million and $ 13.0 million, respectively.

Contract Assets and Liabilities

7 unchanged sentences

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, 2024 and December 31, 2024, including the change between the periods.

The table below shows the balance of contract assets and liabilities as of June 30, 2024 and March 31, 2025, including the change between the periods.

There were no substantial non-current contract assets for the periods presented.

9 unchanged sentences

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 December 31, 2024, the portion of the transaction price allocated to remaining performance obligations was approximately $ 776.1 million.

As of March 31, 2025, the portion of the transaction price allocated to remaining performance obligations was approximately $ 822.5 million.

We expect to recognize revenue on approximately 45 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter.

During the six months ended December 31, 2024, we recognized revenue of $ 51.5 million from contract liabilities existing at the beginning of the period.

During the nine months ended March 31, 2025, we recognized revenue of $ 66.6 million from contract liabilities existing at the beginning of the period.

Practical Expedients.

3 unchanged sentences

The components of operating lease expense were as follows (in thousands):

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Operating lease cost

4 unchanged sentences

June 30, 2024

December 31, 2024

March 31, 2025

Operating lease ROU assets, net

7 unchanged sentences

Supplemental cash flow information related to operating leases was as follows (in thousands):

Six Months Ended December 31,

Nine Months Ended March 31,

Cash paid for operating lease liabilities

ROU assets obtained in exchange for new lease obligations

Maturities of operating lease liabilities at December 31, 2024 were as follows (in thousands):

December 31, 2024

Maturities of operating lease liabilities at March 31, 2025 were as follows (in thousands):

March 31, 2025

Less than one year

2 unchanged sentences

Restructuring and Other Charges

We endeavor to align our global capacity and infrastructure with demand by our customers as well as to fully integrate acquisitions and thereby improve operational efficiency.

During the three months ended December 31, 2024, we recognized $ 0.2 million in restructuring and other charges primarily for acquisition-related costs.

During the six months ended December 31, 2024, we recognized $ 1.4 million in restructuring and other charges, which included $ 0.6 million in acquisition related costs, $ 0.2 million for facility closure costs for operational efficiency activities, and $ 0.6 million for employee terminations.

During the three months ended December 31, 2023, we recognized $ 1.0 million in restructuring and other charges, which included $ 0.2 million in acquisition related costs, $ 0.3 million in legal charges, $ 0.3 million for facility closure costs for operational efficiency improvements, and $ 0.2 million for employee terminations.

During the six months ended December 31, 2023, we recognized $ 1.5 million in restructuring and other charges, which included $ 0.4 million in acquisition related costs, $ 0.4 million in legal charges, $ 0.3 million for facility closure costs for operational efficiency improvements, and $ 0.3 million for employee terminations.

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, 2025, we recognized $ 2.3 million in restructuring and other charges, which included $ 1.8 million in employee terminations and $ 0.5 million for facility closure costs.

During the nine months ended March 31, 2025, we recognized $ 3.6 million in restructuring and other charges, which included $ 0.6 million in acquisition related costs, $ 0.8 million for facility closure costs for operational efficiency activities, and $ 2.3 million for employee terminations.

During the three months ended March 31, 2024, we recognized $ 1.0 million in restructuring and other charges, which primarily included $ 0.5 million for facility closure costs for operational efficiency activities, and $ 0.5 million for employee terminations.

During the nine months ended March 31, 2024, we recognized $ 2.5 million in restructuring and other charges, which included $ 0.8 million for facility closure costs for operational efficiency activities, $ 0.8 million for employee terminations, $ 0.4 million in acquisition related costs, and $ 0.4 million in legal charges.

The following tables summarize restructuring and other charges (benefits), net for the periods set forth below (in thousands):

Three Months Ended December 31, 2023

Three Months Ended March 31, 2024

Optoelectronics and

5 unchanged sentences

Legal costs, net

Three Months Ended December 31, 2024

Three Months Ended March 31, 2025

Optoelectronics and

1 unchanged sentence

Security Division

Acquisition-related costs

Acquisition-related costs (recoveries), net

Employee termination costs

Legal costs, net

Six Months Ended December 31, 2023

Facility closures/consolidation

Nine Months Ended March 31, 2024

Optoelectronics and

5 unchanged sentences

Legal costs, net

Six Months Ended December 31, 2024

Nine Months Ended March 31, 2025

Optoelectronics and

4 unchanged sentences

Facility closures/consolidation

Legal costs, net

The accrued liability for restructuring and other charges is included in other accrued expenses and current liabilities in our condensed consolidated balance sheets.

The changes in the accrued liability for restructuring and other charges for the six-month period ended December 31, 2024 were as follows (in thousands):

Legal costs (reimbursements), net

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, 2025 were as follows (in thousands):

Consolidation

1 unchanged sentence

Restructuring and other charges, net

Payments and adjustments, net

Balance as of December 31, 2024

Payments, adjustments and reimbursements, net

Balance as of March 31, 2025

Revolving Credit Facility

2 unchanged sentences

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 facility bear interest at SOFR plus a margin of 1.5 % as of December 31, 2024 (which margin can range from 1.0 % to 1.75 % based on our consolidated net leverage ratio as defined in the credit facility).

Borrowings under the facility bear interest at SOFR plus a margin of 1.5 % as of March 31, 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 bears a commitment fee of 0.20 % as of December 31, 2024 (which fee can range from 0.10 % to 0.25 % based on our consolidated net leverage ratio as defined in the credit facility).

The unused portion of the facility bears a commitment fee of 0.20 % as of March 31, 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 December 31, 2024, there were $ 236 million of borrowings outstanding under the revolving credit facility, $ 78.6 million outstanding under the letters of credit sub-facility, and $ 131.9 million outstanding under the term loan.

As of December 31, 2024, the amount available to borrow under the revolving credit facility was $ 285.4 million.

As of March 31, 2025, there were $ 156.0 million of borrowings outstanding under the revolving credit facility, $ 75.1 million outstanding under the letters of credit sub-facility, and $ 130.0 million outstanding under the term loan.

As of March 31, 2025, the amount available to borrow under the revolving credit facility was $ 368.9 million.

Loan amounts under the revolving credit facility may be borrowed, repaid and re-borrowed during the term.

2 unchanged sentences

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 December 31, 2024, we were in compliance with all financial covenants under this credit facility.

In September 2022, we entered into an interest rate swap 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.

As of March 31, 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 details.

17 unchanged sentences

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 December 31, 2024 (in thousands):

The following table is a summary of the 2029 Notes as of March 31, 2025 (in thousands):

Principal amount

2 unchanged sentences

Fair value (Level 2)

The 2029 Notes were not eligible for conversion as of December 31, 2024.

The 2029 Notes were not eligible for conversion as of March 31, 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 December 31, 2024 we were in compliance with applicable financial covenants under the indenture governing the 2029 Notes.

For the three months ended December 31, 2024, total interest expense for the 2029 Notes was $ 2.4 million, which consisted of $ 2.0 million of contractual interest expense and $ 0.4 million of amortization of debt discount and issuance costs.

For the six months ended December 31, 2024, total interest expense for the 2029 Notes was $ 4.3 million, which consisted of $ 3.5 million of contractual interest expense and $ 0.8 million of amortization of debt discount and issuance costs.

As of March 31, 2025 we were in compliance with applicable financial covenants under the indenture governing the 2029 Notes.

For the three months ended March 31, 2025, total interest expense for the 2029 Notes was $ 2.4 million, which consisted of $ 2.0 million of contractual interest expense and $ 0.4 million of amortization of debt discount and issuance costs.

For the nine months ended March 31, 2025, total interest expense for the 2029 Notes was $ 6.8 million, which consisted of $ 5.5 million of contractual interest expense and $ 1.3 million of amortization of debt discount and issuance costs.

The unamortized debt issuance cost is amortized on the effective interest method over the life of the 2029 Notes.

2 unchanged sentences

dollars, primarily for the issuance of letters of credit.

As of December 31, 2024, $ 68.0 million was outstanding under these letter-of-credit facilities.

As of December 31, 2024, the total amount available under these credit facilities was $ 22.8 million.

As of March 31, 2025, $ 68.0 million was outstanding under these letter-of-credit facilities.

As of March 31, 2025, the total amount available under these credit facilities was $ 24.7 million.

Long-term debt consisted of the following (in thousands):

3 unchanged sentences

Long-term portion of debt

Future principal payments of long-term debt by fiscal year as of December 31, 2024 are as follows (in thousands):

Future principal payments of long-term debt by fiscal year as of March 31, 2025 are as follows (in thousands):

2025 (3 months remaining)

2 unchanged sentences

Stock-based Compensation

As of December 31, 2024, we maintained the Amended and Restated 2012 Incentive Award Plan (the “OSI Plan”) as a stock-based employee compensation plan.

As of March 31, 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 December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Cost of goods sold

2 unchanged sentences

Stock-based compensation expense

As of December 31, 2024, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 1.4 million for stock options and $ 20.6 million for restricted stock units (“RSUs”).

As of March 31, 2025, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 1.2 million for stock options and $ 17.4 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 2.2 years with respect to the RSUs.

The following summarizes stock option activity during the six months ended December 31, 2024:

The following summarizes stock option activity during the nine months ended March 31, 2025:

Weighted-Average

4 unchanged sentences

Expired or forfeited

Outstanding at December 31, 2024

Exercisable at December 31, 2024

The following summarizes RSU award activity during the six months ended December 31, 2024:

Outstanding at March 31, 2025

Exercisable at March 31, 2025

The following summarizes RSU award activity during the nine months ended March 31, 2025:

Nonvested at June 30, 2024

Nonvested at December 31, 2024

As of December 31, 2024, there were approximately 1.6 million shares available for grant under the OSI Plan.

Nonvested at March 31, 2025

As of March 31, 2025, there were approximately 1.6 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 75,988 and 80,682 performance-based RSUs during the six months ended December 31, 2023 and 2024, respectively.

We granted 75,988 and 80,682 performance-based RSUs during the nine months ended March 31, 2024 and 2025, respectively.

These performance-based RSU awards are contingent on the achievement of certain performance metrics.

9 unchanged sentences

If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings.

During the six months ended December 31, 2024, we repurchased 531,314 shares of common stock for an aggregate purchase price of approximately $ 80 million.

As of December 31, 2024, there were 1,190,556 shares remaining available for repurchase under the authorized repurchase program.

During the nine months ended March 31, 2025, we repurchased 531,314 shares of common stock for an aggregate purchase price of approximately $ 80 million.

As of March 31, 2025, there were 1,190,556 shares remaining available for repurchase under the authorized repurchase program.

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.

5 unchanged sentences

The potential future payments for two agreements with uncapped contingent consideration through fiscal year 2028 are not expected to be significant.

For agreements that contain contingent consideration obligations that are capped, the remaining maximum amount of such potential future payments is $ 56.5 million as of December 31, 2024.

For agreements that contain contingent consideration obligations that are capped, the remaining maximum amount of such potential future payments is $ 54.5 million as of March 31, 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, 2024 to December 31, 2024 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):

The following table provides a roll-forward from June 30, 2024 to March 31, 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, 2024

Business acquisition (Note 2)

Business acquisitions (Note 2)

Foreign currency translation adjustment

1 unchanged sentence

Payments on contingent earnout obligations

Ending fair value, December 31, 2024

Ending fair value, March 31, 2025

Environmental Contingencies

10 unchanged sentences

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 December 31, 2024.

We have not recorded any liability for costs related to contingent indemnification obligations as of March 31, 2025.

Product Warranties

6 unchanged sentences

The following table presents changes in warranty provisions (in thousands):

Six Months Ended December 31,

Nine Months Ended March 31,

Balance at beginning of period

17 unchanged sentences

As such, there can be significant volatility in interim tax provisions.

The effective tax rates for the six months ended December 31, 2023 and 2024 were 21.0 % and 22.9 %, respectively.

During the six months ended December 31, 2023, we recognized a net discrete tax benefit of $ 0.6 million, related to equity-based compensation under ASU 2016-09 and a benefit of $ 2.3 million from changes in prior year tax estimates.

During the six months ended December 31, 2024 we recognized a net discrete tax benefit of $ 0.8 million, related to equity-based compensation under ASU 2016-09.

The effective tax rates for three months ended March 31, 2024 and 2025 were 22.6 % and 14.3 %, respectively.

During the three months ended March 31, 2024 and 2025, we recognized net discrete tax benefits of $ 0.2 million and $ 4.5 million, respectively, related to equity-based compensation under ASU 2016-09 and changes in prior year tax estimates and uncertain tax positions.

The effective tax rates for the nine months ended March 31, 2024 and 2025 were 21.7 % and 19.5 %, respectively.

During the nine months ended March 31, 2024 and 2025, we recognized net discrete tax benefits of $ 0.8 million and $ 1.3 million, respectively, related to equity-based compensation under ASU 2016-09 and $ 2.3 million and $ 4.0 million, respectively, for changes in prior year tax estimates and uncertain tax positions.

Segment Information

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenues (1), (2) —by Segment:

13 unchanged sentences

Eliminations (4)

(1) For the three and six-month periods ended December 31, 2023, one customer in the Security division accounted for 18 % and 14 %, respectively, of consolidated net revenues.

(2) For the three and six-month periods ended December 31, 2024, one customer in the Security division accounted for 10 % and 12 %, respectively, of consolidated net revenues.

(1) For the three months ended March 31, 2024, one Security division customer accounted for 26 % of net revenues.

For the nine months ended March 31, 2024, two Security division customers accounted for 13 % and 12 % of consolidated net revenues, respectively.

(2) For the three and nine-month periods ended March 31, 2025, one customer in the Security division accounted for 14 % and 13 %, respectively, of consolidated net revenues.

(3) As of June 30, 2024, two customers in the Security division accounted for 39 % and 10 %, respectively, of accounts receivable, net.

As of December 31, 2024, two customers in the Security division accounted for 37 % and 13 %, respectively, of accounts receivable, net.

As of March 31, 2025, one customer in the Security division accounted for 44 % of accounts receivable, net.

(4) 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.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements