OSI Systems (OSIS) 10-Q 28 Apr 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2016	Apr. 26, 2016
Document and Entity Information
Entity Registrant Name	OSI SYSTEMS INC
Entity Central Index Key	1,039,065
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		18,895,330
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
Current assets:
Cash and cash equivalents	$ 97,425	$ 47,593
Accounts receivable, net	159,787	178,519
Inventories	291,092	230,421
Deferred taxes	43,466	44,887
Prepaid expenses and other current assets	53,057	40,101
Total current assets	644,827	541,521
Property and equipment, net	187,204	225,703
Goodwill	122,297	98,167
Intangible assets, net	58,373	50,413
Other assets	62,601	63,870
Total assets	1,075,302	979,674
Current liabilities:
Bank lines of credit	125,000
Current portion of long-term debt	2,759	2,801
Accounts payable	84,655	61,932
Accrued payroll and related expenses	29,818	33,169
Advances from customers	59,918	41,389
Deferred revenue	34,796	47,787
Income taxes payable	7,595	9,610
Other accrued expenses and current liabilities	61,442	52,593
Total current liabilities	405,983	249,281
Long-term debt	6,770	8,556
Deferred income taxes	68,887	65,435
Other long-term liabilities	61,543	74,623
Total liabilities	$ 543,183	$ 397,895
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.001 par value - authorized, 100,000,000 shares; issued and outstanding, 19,716,507 shares at June 30, 2015 and 18,893,137 shares at March 31, 2016	$ 212,371	$ 279,212
Retained earnings	333,087	312,831
Accumulated other comprehensive loss	(13,339)	(10,264)
Total stockholders' equity	532,119	581,779
Total liabilities and stockholders' equity	$ 1,075,302	$ 979,674

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Jun. 30, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, shares issued	18,893,137	19,716,507
Common stock, shares outstanding	18,893,137	19,716,507

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net revenues:
Products	$ 148,730	$ 155,915	$ 419,398	$ 503,224
Services	62,074	59,460	188,795	188,377
Total net revenues	210,804	215,375	608,193	691,601
Cost of goods sold:
Products	102,929	107,019	290,036	340,809
Services	37,816	35,752	112,063	114,672
Total cost of goods sold	140,745	142,771	402,099	455,481
Gross profit	70,059	72,604	206,094	236,120
Operating expenses:
Selling, general and administrative	39,233	37,970	122,767	130,046
Research and development	12,945	12,559	37,871	38,469
Impairment, restructuring and other charges	4,537	3,620	15,634	6,425
Total operating expenses	56,715	54,149	176,272	174,940
Income from operations	13,344	18,455	29,822	61,180
Interest and other expense, net	(666)	(812)	(2,083)	(2,508)
Income before income taxes	12,678	17,643	27,739	58,672
Provision for income taxes	3,335	4,415	7,483	15,954
Net income	$ 9,343	$ 13,228	$ 20,256	$ 42,718
Net income per share:
Basic (in dollars per share)	$ 0.48	$ 0.67	$ 1.03	$ 2.16
Diluted (in dollars per share)	$ 0.47	$ 0.64	$ 1	$ 2.08
Shares used in per share calculation:
Basic (in shares)	19,336	19,801	19,604	19,810
Diluted (in shares)	19,941	20,529	20,261	20,515

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 9,343	$ 13,228	$ 20,256	$ 42,718
Other comprehensive loss, net of tax:
Foreign currency translation adjustment	(599)	(3,775)	(3,263)	(8,909)
Other	79	109	188	309
Other comprehensive loss	(520)	(3,666)	(3,075)	(8,600)
Comprehensive income	$ 8,823	$ 9,562	$ 17,181	$ 34,118

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 20,256	$ 42,718
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	42,544	45,448
Stock based compensation expense	13,582	18,135
Impairment charges	8,741
Other	1,571	5,449
Changes in operating assets and liabilities-net of business acquisitions:
Accounts receivable	21,442	19,817
Inventories	(53,974)	(29,414)
Prepaid expenses and other assets	(17,746)	(11,003)
Accounts payable	21,813	14,212
Advances from customers	(201)	(8,871)
Deferred revenue	(12,890)	(9,797)
Other	(4,902)	1,002
Net cash provided by operating activities	40,236	87,696
Cash flows from investing activities:
Acquisition of property and equipment	(8,965)	(10,113)
Acquisition of businesses, net of cash acquired	(19,565)	(14,687)
Acquisition of intangible and other assets	(4,256)	(5,335)
Net cash used in investing activities	(32,786)	(30,135)
Cash flows from financing activities:
Net borrowings (repayments) on bank lines of credit	125,000	(18,000)
Proceeds from long-term debt	583	1,406
Payments on long-term debt	(2,209)	(2,485)
Proceeds from exercise of stock options and employee stock purchase plan	6,132	3,237
Repurchase of common shares	(73,368)	(23,391)
Taxes paid related to net share settlements of equity awards	(13,187)	(7,050)
Net cash provided by (used in) financing activities	42,951	(46,283)
Effect of exchange rate changes on cash	(569)	(1,068)
Net increase in cash and cash equivalents	49,832	10,210
Cash and cash equivalents-beginning of period	47,593	38,831
Cash and cash equivalents-end of period	97,425	49,041
Cash paid, net during the period for:
Interest	1,563	1,554
Income taxes	$ 20,075	$ 23,246

Basis of Presentation

Basis of Presentation	9 Months Ended
	Mar. 31, 2016
Basis of Presentation
Basis of Presentation	1. Basis of Presentation Description of Business OSI Systems, Inc., together with its subsidiaries (the “Company”), is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. The Company sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace. The Company has three reporting segments: (i) Security, providing security inspection systems, turnkey security screening solutions and related services, (ii) Healthcare, providing patient monitoring, diagnostic cardiology, anesthesia systems and defibrillator products, and related services and (iii) Optoelectronics and Manufacturing, providing specialized electronic components and electronic manufacturing services for the Security and Healthcare Divisions as well as to external original equipment manufacturing clients for applications in the defense, aerospace, medical and industrial markets, among others. Through its Security Division, the Company provides security screening products and related services worldwide. These products fall into the following categories: baggage and parcel inspection; cargo and vehicle inspection, hold (checked) baggage screening, people screening, radiation detection and explosive and narcotics trace detection. In addition to these products, the Company provides site design, installation, training and technical support services to its customers. The Company also provides turnkey security screening solutions, which may include the construction, staffing and long-term operation of security screening checkpoints for its customers. Through its Healthcare Division, the Company designs, manufactures, markets and services patient monitoring, diagnostic cardiology, anesthesia delivery and ventilation systems, defibrillator products, and related supplies and accessories worldwide. These products are used by care providers in critical care, emergency and perioperative areas within hospitals as well as physicians’ offices, medical clinics and ambulatory surgery centers among others. The defibrillators are also used in public facilities. Through its Optoelectronics and Manufacturing Division, the Company designs, manufactures and markets optoelectronic devices and provides electronics manufacturing services worldwide for use in a broad range of applications, including aerospace and defense electronics, security and inspection systems, medical imaging and diagnostic products, telecommunications, computer peripherals, industrial automation systems, automotive diagnostic systems, gaming systems and consumer products. This Division provides products and services to original equipment manufacturers and end users as well as to the Company’s own Security and Healthcare Divisions. Basis of Presentation The condensed consolidated financial statements include the accounts of OSI Systems, Inc. and its 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. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete 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 condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015. The results of operations for the three and nine months ended March 31, 2016 are not necessarily indicative of the operating results to be expected for the full 2016 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for the Company include, but are not limited to, revenue recognition, fair values of assets acquired and liabilities assumed in business combinations, collectability of accounts receivable, market values for inventories reported at lower of cost or market, stock-based compensation expense, income taxes, accrued product warranty costs, contingent liabilities, 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. Actual amounts will likely differ from these estimates and could differ materially. Per Share Computations The Company computes basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. The Company computes diluted earnings per share by dividing net income available to common stockholders by the sum of the weighted average number of common and dilutive potential common shares outstanding. Potential common shares consist of the shares issuable upon the exercise of stock options and restricted stock or unit awards under the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Net income for diluted earnings per share calculation $ $ $ $ Weighted average shares outstanding for basic earnings per share calculation Dilutive effect of stock awards Weighted average shares outstanding for diluted earnings per share calculation Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ Shares excluded from computation of diluted net income per share: Weighted average stock options excluded from computation due to anti-dilutive effect Reclassifications Certain reclassifications have been made to prior year amounts within the condensed consolidated balance sheet and condensed consolidated statement of cash flows to conform to the current year’s presentation. Cash Equivalents The Company considers all highly liquid investments purchased with maturities of approximately three months or less as of the acquisition date to be cash equivalents. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, marketable securities, derivative instruments, accounts receivable, accounts payable and debt instruments. The carrying values of financial instruments, other than long-term debt instruments, are representative of their fair values due to their short-term maturities. The carrying values of the Company’s 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 available to the Company. 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. “Level 1” category includes assets and liabilities at the quoted prices in active markets for identical assets and liabilities. “Level 2” category includes assets and liabilities from observable inputs other than quoted market prices. “Level 3” category includes assets and liabilities whose valuation techniques are unobservable and significant to the fair value measurement. There were no assets where “Level 3” valuation techniques were used. As further discussed in Note 8 to the condensed consolidated financial statements, the Company’s contingent payment obligations related to acquisitions are valued in accordance with “Level 3” valuation techniques. Such obligations were measured at fair value on a recurring basis. The fair values of our financial assets and liabilities as of June 30, 2015 and March 31, 2016 are categorized as follows (in thousands): June 30, 2015 March 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Equity securities $ $ $ — $ $ $ — — $ Insurance company contracts — — — — Interest rate contract — ) — ) — ) — ) Total assets $ $ $ — $ $ $ $ — $ Liabilities — Contingent payment obligations $ — $ — $ $ $ — $ — $ $ Derivative Instruments and Hedging Activity The Company’s use of derivatives consists of an interest rate swap agreement. The interest rate swap agreement was entered into to improve the predictability of cash flows from interest payments related to variable, London Interbank Offered Rate (“LIBOR”)-based debt for the duration of the term loan. The interest rate swap matures in October 2019. The interest rate swap is considered an effective cash flow hedge, and, as a result, the net gains or losses on such instrument were reported as a component of other comprehensive income in the condensed consolidated financial statements and are reclassified as net income when the hedge transaction settles. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are charged while assets are used in service and are computed using the straight-line method over the estimated useful lives of the assets taking into consideration any estimated salvage value. Amortization of leasehold improvements is calculated on the straight-line method over the shorter of the useful life of the asset or the lease term. Leased capital assets are included in property and equipment. Amortization of property and equipment under capital leases is included with depreciation expense. In the event that property and equipment are idle, as a result of excess capacity or the early termination, non-renewal or reduction in scope of a turnkey screening operation, such assets are assessed for impairment on a periodic basis or if any indicators of impairment exist. Certain fixed assets related to the Company’s turnkey security screening program in Mexico are not currently in use. As of March 31, 2016, the net value of these assets is approximately $15 million, which is included in property and equipment in the condensed consolidated balance sheet. Revenue Recognition The Company recognizes revenue from sales of products upon shipment when title and risk of loss passes, and when terms are fixed and collection is probable. Revenue from services includes after-market services, installation and implementation of products, and turnkey security screening services. Generally, revenue from services is recognized when the services are performed. The portion of revenue for the sale attributable to installation is deferred and recognized when the installation service is provided. In an instance where terms of sale include subjective customer acceptance criteria, revenue is deferred until the Company has achieved the acceptance criteria. Concurrent with the revenue recognition, the Company accrues estimated product return reserves and warranty expenses. Critical judgments made by management related to revenue recognition include the determination of whether or not customer acceptance criteria are perfunctory or inconsequential. The determination of whether or not customer acceptance terms are perfunctory or inconsequential impacts the amount and timing of revenue recognized. Critical judgments also include estimates of warranty reserves, which are established based on historical experience and knowledge of the product under warranty. In instances where a contract calls for multiple deliverables and such deliverables qualify as separate units of accounting, the Company may recognize revenue based on the value of the respective deliverables identified in the underlying contract. In connection with the agreement with the Servicio de Administración Tributaria (“SAT”) in Mexico , revenue is recognized based upon proportional performance, measured by the actual number of labor hours incurred divided by the total estimated number of labor hours for the project. The impact of changes in the estimated labor hours to service the agreement is reflected in the period during which the change becomes known. In this agreement, customer billings may be submitted for several separate deliverables including: monthly services, activation of services, training of customer personnel and consultation on the design and location of security scanning operations, among others. In the event that payments received from the customer exceed revenue recognition, deferred revenue is recorded. In the event that revenue recognition exceeds payments received from the customer, unbilled receivables are recorded. Revenues from out-of-warranty service maintenance contracts are recognized ratably over the term of such contracts. For services not derived from specific maintenance contracts, revenues are recognized as the services are performed. Deferred revenue for such services arises from payments received from customers for services not yet performed. On occasion, the Company receives advances from customers that are amortized against future customer payments pursuant to the underlying agreements. Such advances are classified in the condensed consolidated balance sheets as either a current or long-term liability depending on when the Company estimates the corresponding amortization to occur. Business Combinations The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired, and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, and trade names, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. During the three months ended March 31, 2016, the Company acquired all of the outstanding shares of capital stock of a distributor and manufacturer of electronic components in the United Kingdom, and a distributor and manufacturer of flex circuit and touch panel design products in California. The combined purchase prices consisted of cash payments at closing of $17.5 million, holdbacks of $2.6 million for potential indemnity claims and $12.5 million for the fair value of contingent consideration. The indemnity holdbacks are payable in fiscal 2017, if not used for indemnification claims. The combined purchase prices were allocated to the fair values of the net tangible and intangible assets. The combined allocations of intangible assets consisted of $20.4 million of goodwill and $7.8 million of identifiable intangible assets, which was comprised of $1.2 million of technology, $5.5 million of customer relationships, $0.9 million of trademarks and trade names, and $0.2 million of non-compete covenants. Recent Accounting Updates Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) amending revenue recognition requirements for multiple-deliverable revenue arrangements. This update provides guidance on how revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. This determination is made in five steps: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The ASU is effective for fiscal years beginning after December 15, 2017 and for interim reporting periods within that reporting period. Earlier application is permitted only as of fiscal years beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has not yet selected a transition method and is currently evaluating the impact this ASU may have on its financial condition and results of operations. In July 2015, FASB issued an ASU amending some of the guidance on subsequent measurement of inventory. This ASU affects companies that are using first-in, first-out or average cost, or any other methods besides last-in, first out or the retail inventory method. This ASU is effective for fiscal years beginning after December 15, 2016, including interim reporting periods within that reporting period. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In September 2015, FASB issued an ASU simplifying measurement-period adjustments for acquisitions. This update provides guidance on how an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This amendment requires the acquirer to recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined rather than retrospectively. This ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within that reporting period. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In November 2015, FASB issued an ASU amending the classification of deferred taxes. Deferred tax liabilities and assets will now be classified as non-current. Previously, the deferred income tax assets and liabilities had to be separated into current and non-current. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If an entity applies the guidance prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within that reporting period. Earlier application is permitted. The Company has not yet adopted this ASU and its adoption is not expected to have a material effect on the Company’s financial statements. In January 2016, FASB issued an ASU which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within that reporting period. Early application is permitted. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In February 2016, the FASB issued an ASU which affects the accounting for leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The amendment also will require qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within that reporting period. Early application is permitted. The Company has not yet adopted this update and is currently evaluating the impact it may have on its financial condition and results of operations. In April and March 2016, the FASB issued an ASU clarifying the implementation guidance on licensing and the identification of performance obligations considerations, and the implementation guidance on principal versus agent considerations. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within that reporting period, with early adoption permitted as of the original effective date. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In March 2016, the FASB issued an ASU relating to employee share-based payment accounting. This guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within that reporting period. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations.

Balance Sheet Details

Balance Sheet Details	9 Months Ended
	Mar. 31, 2016
Balance Sheet Details
Balance Sheet Details	2. Balance Sheet Details The following tables provide details of selected balance sheet accounts (in thousands): June 30, 2015 March 31, 2016 Accounts receivable $ $ Less allowance for doubtful accounts ) ) Total $ $ June 30, 2015 March 31, 2016 Raw materials $ $ Work-in-process Finished goods Total $ $ Estimated Useful June 30, March 31, Lives 2015 2016 Land N/A $ $ Buildings, civil works and improvements 5 - 40 years Leasehold improvements 1 - 20 years Equipment and tooling 3 - 10 years Furniture and fixtures 3 - 13 years Computer equipment 1 - 5 years Computer software 3 - 10 years Construction in process N/A Total Less accumulated depreciation and amortization ) ) Property and equipment, net $ $ Depreciation expense was approximately $12.5 million and $13.1 million for the three months ended March 31, 2015 and 2016, respectively, and approximately $42.7 million and $39.1 million for the nine months ended March 31, 2015 and 2016, respectively.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets
Goodwill and Intangible Assets	3. Goodwill and Intangible Assets The changes in the carrying value of goodwill for the nine-month period ended March 31, 2016 were as follows (in thousands): Security Healthcare Optoelectronics and Manufacturing Consolidated Balance as of June 30, 2015 $ $ $ $ Goodwill acquired or adjusted during the period — Foreign currency translation adjustment ) ) ) Balance as of March 31, 2016 $ $ $ $ Intangible assets as of June 30, 2015 and March 31, 2016 were as follows (in thousands): June 30, 2015 March 31, 2016 Weighted Average Lives Gross Carrying Value Accumulated Amortization Intangibles Net Gross Carrying Value Accumulated Amortization Intangibles Net Amortizable assets: Software development costs 7 years $ $ $ $ $ $ Patents 17 years Developed technology 11 years Customer relationships/backlog 7 years Total amortizable assets Non-amortizable assets: Trademarks — — Total intangible assets $ $ $ $ $ $ Amortization expense related to intangible assets was $0.8 million and $1.4 million for the three month periods ended March 31, 2015 and 2016, respectively. For the nine months ended March 31, 2015 and 2016, amortization expense was $2.7 million and $3.4 million, respectively. At March 31, 2016, the estimated future amortization expense was as follows (in thousands): Fiscal Years 2016 (remaining 3 months) $ 2017 2018 2019 2020 2021 2022 and thereafter (including assets that have not yet begun to be amortized) Total $ 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, software development costs are amortized on a straight-line basis over the remaining estimated economic life of the product. For the three months ended March 31, 2015 and 2016, the Company capitalized software development costs in the amount of $0.9 million and $0.7 million, respectively. For the nine-month periods ended March 31, 2015 and 2016, the Company capitalized software development costs in the amount of $2.2 million and $2.1 million, respectively.

Borrowings

Borrowings	9 Months Ended
	Mar. 31, 2016
Borrowings
Borrowings	4. Borrowings The Company has a $450 million revolving credit facility maturing May 2019. The credit facility includes a $375 million sub-limit for letters of credit. The Company has the ability to increase the facility by $200 million under certain circumstances. Borrowings under this facility bear interest at LIBOR plus a margin of 1.25% as of March 31, 2016. This margin is determined by the Company’s consolidated leverage ratio and may range from 1.25% to 2.0%. Letters of credit reduce the amount available to borrow by their face value. The unused portion of the facility bears a commitment fee of 0.20% as of March 31, 2016 but this can range from 0.20% to 0.35% based on the Company’s consolidated leverage ratio. The Company’s borrowings under the credit agreement are guaranteed by certain of the Company’s U.S.-based subsidiaries and are secured by substantially all of the assets of the Company and certain subsidiaries. The agreement contains various representations and warranties, affirmative, negative and financial covenants, and conditions of default customary for financing agreements of this type. As of March 31, 2016, there was $125.0 million outstanding under the revolving credit facility and $6.1 million outstanding under the letters-of-credit sub-facility. Several of the Company’s foreign subsidiaries maintain bank lines-of-credit, denominated in local currencies and U.S. dollars, to meet short-term working capital requirements and for the issuance of letters-of-credit. As of March 31, 2016, $34.2 million was outstanding under these letter-of-credit facilities, while no debt was outstanding. As of March 31, 2016, the total amount available under these credit facilities was $20.1 million, with a total cash borrowing sub-limit of $1.4 million. In September 2012, the Company entered into a term loan agreement for $11.1 million to fund the acquisition of land and a building in the state of Washington. The loan, which bears interest at LIBOR plus 1.25%, is payable on a monthly basis over seven years. Concurrent with entering into the floating rate loan, the Company entered into an interest rate swap agreement that effectively locks the interest rate of the loan to 2.2% per annum for the term of the loan. Long-term debt consisted of the following (in thousands): June 30, 2015 March 31, 2016 Term loans $ $ Other long-term debt Less current portion of long-term debt Long-term portion of debt $ $

Impairment, restructuring and o

Impairment, restructuring and other charges	9 Months Ended
	Mar. 31, 2016
Impairment, restructuring and other charges.
Impairment, restructuring and other charges	5. Impairment, restructuring and other charges During the nine months ended March 31, 2016, the Company determined that certain fixed assets will not be used and are permanently impaired. The Company also determined that it is more likely than not that a minority interest investment will not be recovered and that it is appropriate to impair the asset. In addition, the Company accounts for certain nonrecurring charges related to restructuring activities, litigation or other charges as Impairment, restructuring and other charges in the condensed consolidated financial statements. The following table summarizes the impairment, restructuring and other charges (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Impairment of fixed assets $ — $ — $ — $ Impairment of minority interest investment — — — Total impairment charges — — — Employee termination costs Charges related to government contract issues Charges related to class action litigation — — — Legal settlement and related costs — — Acquisition costs — — Other Total impairment, restructuring and other charges $ $ $ $ As of both June 30, 2015 and March 31, 2016, accrued restructuring and other charges were $3.4 million, and are included in Other accrued expenses in the condensed consolidated balance sheets.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Mar. 31, 2016
Stockholders' Equity
Stockholders' Equity	6. Stockholders’ Equity The Company has an active common stock repurchase program. During the nine-month period ended March 31, 2016, the Company repurchased 1,201,402 shares for $73.4 million unde r this program. During the nine- month period ended March 31, 2015, the Company repurchased 116,431 shares for $23.4 million under this program. At March 31, 2016, the Company had authorization from the Board of Directors to repurchase up to approximately 63,000 more shares. In April 2016, the Board of Directors authorized a new common stock repurchase program for the repurchase of an additional 1 million shares. As of March 31, 2016, the Company maintained two share-based employee compensation plans (the “OSI Plans”): the 2012 Incentive Award Plan (“2012 Plan”) and the Amended and Restated 2006 Equity Participation Plan (“2006 Plan”). The Company no longer makes grants under the 2006 Plan. The Company recorded stock-based compensation expense in the condensed consolidated statements of operations as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Cost of goods sold $ $ $ $ Selling, general and administrative Research and development Stock-based compensation expense before taxes $ $ $ $ Less: related income tax benefit ) ) ) ) Stock-based compensation expense, net of estimated taxes $ $ $ $ As of March 31, 2016, total unrecognized compensation cost related to share-based compensation grants were estimated at $0.9 million for stock options and $16.6 million for restricted stock and restricted stock units (“RSUs”) under the OSI Plans. The Company expects to recognize these costs over a weighted-average period of 1.8 years. The following summarizes stock option activity during the nine months ended March 31, 2016: Number of Options Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 $ Granted $ Exercised ) $ Expired or forfeited ) $ Outstanding at March 31, 2016 $ 4.2 years $ Exercisable at March 31, 2016 $ 3.9 years $ The following summarizes restricted stock and RSU award activity during the nine months ended March 31, 2016: Shares Weighted- Average Fair Value Nonvested at June 30, 2015 $ Granted Vested ) Forfeited ) Nonvested at March 31, 2016 $ As of March 31, 2016, there were 2,792,149 shares available for grant under the 2012 Plan. Under the terms of that plan, restricted stock and RSUs granted from the pool of shares available for grant on or after December 12, 2012 reduce the pool by 1.87 shares for each award granted. Restricted stock and RSUs forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited. The Company granted 151,469 and 139,300 performance-based RSUs during the nine months ended March 31, 2015 and 2016, respectively. These performance-based RSUs are contingent on the achievement of certain financial performance metrics. The payout can range from zero to 250% of the original number of shares or units awarded.

Retirement Benefit Plans

Retirement Benefit Plans	9 Months Ended
	Mar. 31, 2016
Retirement Benefit Plans
Retirement Benefit Plans	7. Retirement Benefit Plans The Company sponsors various retirement benefit plans including qualified and nonqualified defined benefit pension plans for its employees. The components of net periodic pension expense are as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Service cost $ $ $ $ Amortization of prior service cost Net periodic pension expense $ $ $ $ For each of the three months ended March 31, 2015 and 2016, there were no contributions made to these defined benefit plans. For the nine months ended March 31, 2015 and 2016, the Company made contributions of $1.0 million and $0.2 million, respectively, to these defined benefit plans. In addition, the Company maintains various defined contribution plans. For each of the three months ended March 31, 2015 and 2016, the Company made contributions of $1.1 million to these defined contribution plans. For the nine months ended March 31, 2015 and 2016, the Company made contributions of $3.3 million and $3.4 million, respectively, to these plans.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Mar. 31, 2016
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Contingent Acquisition Obligations Under the terms and conditions of the purchase agreements associated with certain acquisitions, the Company may be obligated to make additional payments based on the achievement of certain sales or profitability milestones with respect to such acquired businesses. The maximum amount of such future payments under arrangements where contingent consideration is capped was $34 million as of March 31, 2016. In addition, one of the purchase agreements entered into by the Company requires payments to be made through 2022 based on the license of, or sales of products containing the technology of CXR Limited, a company acquired in 2004. For acquisitions that occurred prior to fiscal year 2010, the Company accounts for such contingent payments as an addition to the purchase price of the acquired business. Otherwise, the estimated fair value of these obligations is recorded as a liability at the time of the acquisition in the condensed consolidated balance sheets with subsequent revisions reflected in the condensed consolidated statements of operations. As of June 30, 2015 and March 31, 2016, $17.2 million and $21.8 million, respectively, of contingent payment obligations were included in other liabilities in the condensed consolidated balance sheets. During the nine months ended March 31, 2016, additional contingent consideration of $12.5 million was recorded as a result of two acquisitions completed during the period, $0.8 million of contingent consideration was paid, and the liability was reduced by $7.1 million due to revaluation. Advances from Customers The Company receives advances from customers associated with certain projects. In fiscal 2012, the Company entered into an agreement with the Mexican government to provide a turnkey security screening solution along the country’s borders, and in its ports and airports. Associated with the agreement, the Company was provided an advance totaling $100 million that is scheduled to become fully amortized by the end of fiscal 2017. As of March 31, 2016, $31.3 million of this advance remains outstanding. Environmental Contingencies The Company is subject to various environmental laws. The Company’s practice is to conduct appropriate environmental investigations at its 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, the Company has conducted further environmental assessments consisting of soil and groundwater testing and other investigations deemed appropriate by independent environmental consultants. During one investigation at the Company’s Hawthorne, California facility, the Company discovered soil and groundwater contamination that it believes was the result of unspecified on- and off-site releases occurring prior to the Company’s occupancy. Historical usage of this site includes semiconductor and electronics manufacturing, dating back to the mid-1960s, as well as possible aircraft and related manufacturing dating to the early 1940s. Similar operations, including chemical manufacturing and storage, were conducted at neighboring sites throughout that period and into the 1990s. It is not presently known when the releases occurred or by whom they were caused, though Company records, in conjunction with data obtained from soil and groundwater surveys, support the Company’s assertion that these releases are historical in nature, having occurred prior to the Company’s occupancy. Further, the groundwater contamination is a known regional issue, not limited to the Company’s premises or its immediate surroundings. The Company has filed all requisite reports with the appropriate environmental authorities and continues to cooperate with the local governing agency to develop a complete and accurate characterization of this site. Recent activities include the installation of groundwater monitoring wells, indoor air quality monitoring and additional soil and soil vapor studies. Results from these studies are being evaluated to determine the extent of the on-site releases as well as appropriate and cost-effective remedial action measures. Periodic groundwater monitoring is expected to continue until such time as the governing authority requests further action. The Company has not accrued for loss contingencies relating to the Hawthorne facility or any other environmental matters because it believes that, although unfavorable outcomes may be possible, they are not considered by the Company’s management to be probable and reasonably estimable. If one or more of these environmental matters are resolved in a manner adverse to the Company, the impact on the Company’s business, financial condit ion, results of operations and cash flow could be material. Indemnifications In the normal course of business, the Company has agreed to indemnify certain parties with respect to certain matters. The Company has 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, the Company has entered into indemnification agreements with its directors and certain of its officers. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company has not recorded any liability for costs related to contingent indemnification obligations as of March 31, 2016. Product Warranties The Company offers its customers warranties on many of the products that it sells. 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, the Company records a provision for estimated warranty expenses with a corresponding increase in cost of goods sold. The Company periodically adjusts this provision based on historical experience and anticipated expenses. The Company charges actual expenses of repairs under warranty, including parts and labor, to this provision when incurred. The following table presents changes in warranty provisions (in thousands): Nine Months Ended March 31, 2015 2016 Balance at beginning of period $ $ Additions and adjustments Reductions for warranty repair costs ) ) Balance at end of period $ $ Legal Proceedings Three shareholder derivative complaints (the “Derivative Actions”) have been filed purportedly on behalf of the Company against the members of the Company’s Board of Directors (as individual defendants). Hagan v. Chopra et al. was filed in the United States District Court for the Central District of California (the “Court”) on April 15, 2014, and was subsequently consolidated by the Court with City of Irving Benefit Plan v. Chopra et al. , which was filed on December 29, 2014. Kocen v. Chopra et al. was filed in the Delaware Court of Chancery on July 14, 2015. The Derivative Actions generally assert claims for breach of fiduciary duties and unjust enrichment against the individual defendants on behalf of the Company. Plaintiffs in the Derivative Actions seek unspecified damages, restitution, injunctive relief, attorneys’ and experts’ fees, costs, expenses, and other unspecified relief. While the Company believes that the Derivative Actions are without merit and intends to defend the litigation vigorously, the Company expects to incur costs associated with the defense of the actions which may be covered under the Company’s insurance policy. At this early stage of litigation, the ultimate outcomes of the Derivative Actions are uncertain and the Company cannot reasonably predict the timing or outcomes, or estimate their effect, if any, on its financial statements. The Company is involved in various other claims and legal proceedings arising in the ordinary course of business. In the Company’s opinion after consultation with legal counsel, the ultimate disposition of such proceedings is not likely to have a material adverse effect on its business, financial condition, results of operations or cash flows. The Company has not accrued for loss contingencies relating to such matters because it believes that, although unfavorable outcomes in the proceedings may be 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 the Company, the impact on the Company’s business, financial condition, results of operations and cash flow could be material.

Income Taxes

Income Taxes	9 Months Ended
	Mar. 31, 2016
Income Taxes
Income Taxes	9. Income Taxes The provision for income taxes is determined using an effective tax rate that is subject to fluctuations during the year as new information is obtained. The assumptions used to estimate the annual effective tax rate include factors such as the mix of pre-tax earnings in the various tax jurisdictions in which the Company operates, valuation allowances against deferred tax assets, increases or decreases in uncertain tax positions, utilization of research and development tax credits, changes in or the interpretation of tax laws in jurisdictions where the Company conducts business and certain tax elections. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease in the period such determination is made.

Segment Information

Segment Information	9 Months Ended
	Mar. 31, 2016
Segment Information
Segment Information	10. Segment Information The Company has determined that it operates in three identifiable industry segments: (a) security and inspection systems (Security Division), (b) medical monitoring and anesthesia systems (Healthcare Division) and (c) optoelectronic devices and manufacturing (Optoelectronics and Manufacturing Division). The Company also has 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 product segments. Both the Security and Healthcare Divisions comprise primarily end-user businesses, while the Optoelectronics and Manufacturing Division primarily supplies components and subsystems to original equipment manufacturers, including 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, Summary of Significant Accounting Policies of the Form 10-K for the fiscal year ended June 30, 2015 . The following tables present the operations and identifiable assets by industry segment (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Revenues (1) — by Segment: Security Division $ $ $ $ Healthcare Division Optoelectronics and Manufacturing Division, including intersegment revenues Intersegment revenues elimination ) ) ) ) Total $ $ $ $ Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Operating income (loss) — by Segment: Security Division $ $ $ $ Healthcare Division ) Optoelectronics and Manufacturing Division Corporate ) ) ) ) Eliminations (2) ) ) ) ) Total $ $ $ $ June 30, 2015 March 31, 2016 Assets (1) — by Segment: Security Division $ $ Healthcare Division Optoelectronics and Manufacturing Division Corporate Eliminations (2) ) ) Total $ (1) The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: (a) For each of the three months ended March 31, 2015 and 2016, one customer, SAT in Mexico, accounted for 14% of total net revenues. For the nine months ended March 31, 2015 and 2016, SAT accounted for 13% and 14% of total net revenues, respectively. (b) For the nine-month period ended March 31, 2015, the U.S. Department of Defense, under a Foreign Military Sale, accounted for 10% of net revenues. (c) At March 31, 2016, one international customer accounted for 11% of accounts receivable. No customer accounted for greater than 10% of accounts receivable at June 30, 2015. (2) Eliminations within operating income primarily reflect the change in the elimination of intercompany profit in inventory not-yet-realized. Eliminations in assets reflect the amount of intercompany profits in inventory as of the balance sheet date. Such intercompany profit will be realized when inventory is shipped to the external customers of the Security and Healthcare Divisions.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Mar. 31, 2016
Basis of Presentation
Description of Business	Description of Business OSI Systems, Inc., together with its subsidiaries (the “Company”), is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. The Company sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace. The Company has three reporting segments: (i) Security, providing security inspection systems, turnkey security screening solutions and related services, (ii) Healthcare, providing patient monitoring, diagnostic cardiology, anesthesia systems and defibrillator products, and related services and (iii) Optoelectronics and Manufacturing, providing specialized electronic components and electronic manufacturing services for the Security and Healthcare Divisions as well as to external original equipment manufacturing clients for applications in the defense, aerospace, medical and industrial markets, among others. Through its Security Division, the Company provides security screening products and related services worldwide. These products fall into the following categories: baggage and parcel inspection; cargo and vehicle inspection, hold (checked) baggage screening, people screening, radiation detection and explosive and narcotics trace detection. In addition to these products, the Company provides site design, installation, training and technical support services to its customers. The Company also provides turnkey security screening solutions, which may include the construction, staffing and long-term operation of security screening checkpoints for its customers. Through its Healthcare Division, the Company designs, manufactures, markets and services patient monitoring, diagnostic cardiology, anesthesia delivery and ventilation systems, defibrillator products, and related supplies and accessories worldwide. These products are used by care providers in critical care, emergency and perioperative areas within hospitals as well as physicians’ offices, medical clinics and ambulatory surgery centers among others. The defibrillators are also used in public facilities. Through its Optoelectronics and Manufacturing Division, the Company designs, manufactures and markets optoelectronic devices and provides electronics manufacturing services worldwide for use in a broad range of applications, including aerospace and defense electronics, security and inspection systems, medical imaging and diagnostic products, telecommunications, computer peripherals, industrial automation systems, automotive diagnostic systems, gaming systems and consumer products. This Division provides products and services to original equipment manufacturers and end users as well as to the Company’s own Security and Healthcare Divisions.
Basis of Presentation	Basis of Presentation The condensed consolidated financial statements include the accounts of OSI Systems, Inc. and its 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. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete 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 condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015. The results of operations for the three and nine months ended March 31, 2016 are not necessarily indicative of the operating results to be expected for the full 2016 fiscal year or any future periods.
Use of Estimates	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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for the Company include, but are not limited to, revenue recognition, fair values of assets acquired and liabilities assumed in business combinations, collectability of accounts receivable, market values for inventories reported at lower of cost or market, stock-based compensation expense, income taxes, accrued product warranty costs, contingent liabilities, 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. Actual amounts will likely differ from these estimates and could differ materially.
Per Share Computations	Per Share Computations The Company computes basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. The Company computes diluted earnings per share by dividing net income available to common stockholders by the sum of the weighted average number of common and dilutive potential common shares outstanding. Potential common shares consist of the shares issuable upon the exercise of stock options and restricted stock or unit awards under the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Net income for diluted earnings per share calculation $ $ $ $ Weighted average shares outstanding for basic earnings per share calculation Dilutive effect of stock awards Weighted average shares outstanding for diluted earnings per share calculation Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ Shares excluded from computation of diluted net income per share: Weighted average stock options excluded from computation due to anti-dilutive effect
Reclassifications	Reclassifications Certain reclassifications have been made to prior year amounts within the condensed consolidated balance sheet and condensed consolidated statement of cash flows to conform to the current year’s presentation.
Cash Equivalents	Cash Equivalents The Company considers all highly liquid investments purchased with maturities of approximately three months or less as of the acquisition date to be cash equivalents.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, marketable securities, derivative instruments, accounts receivable, accounts payable and debt instruments. The carrying values of financial instruments, other than long-term debt instruments, are representative of their fair values due to their short-term maturities. The carrying values of the Company’s 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 available to the Company. 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. “Level 1” category includes assets and liabilities at the quoted prices in active markets for identical assets and liabilities. “Level 2” category includes assets and liabilities from observable inputs other than quoted market prices. “Level 3” category includes assets and liabilities whose valuation techniques are unobservable and significant to the fair value measurement. There were no assets where “Level 3” valuation techniques were used. As further discussed in Note 8 to the condensed consolidated financial statements, the Company’s contingent payment obligations related to acquisitions are valued in accordance with “Level 3” valuation techniques. Such obligations were measured at fair value on a recurring basis. The fair values of our financial assets and liabilities as of June 30, 2015 and March 31, 2016 are categorized as follows (in thousands): June 30, 2015 March 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Equity securities $ $ $ — $ $ $ — — $ Insurance company contracts — — — — Interest rate contract — ) — ) — ) — ) Total assets $ $ $ — $ $ $ $ — $ Liabilities — Contingent payment obligations $ — $ — $ $ $ — $ — $ $
Derivative Instruments and Hedging Activity	Derivative Instruments and Hedging Activity The Company’s use of derivatives consists of an interest rate swap agreement. The interest rate swap agreement was entered into to improve the predictability of cash flows from interest payments related to variable, London Interbank Offered Rate (“LIBOR”)-based debt for the duration of the term loan. The interest rate swap matures in October 2019. The interest rate swap is considered an effective cash flow hedge, and, as a result, the net gains or losses on such instrument were reported as a component of other comprehensive income in the condensed consolidated financial statements and are reclassified as net income when the hedge transaction settles.
Property and Equipment	Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are charged while assets are used in service and are computed using the straight-line method over the estimated useful lives of the assets taking into consideration any estimated salvage value. Amortization of leasehold improvements is calculated on the straight-line method over the shorter of the useful life of the asset or the lease term. Leased capital assets are included in property and equipment. Amortization of property and equipment under capital leases is included with depreciation expense. In the event that property and equipment are idle, as a result of excess capacity or the early termination, non-renewal or reduction in scope of a turnkey screening operation, such assets are assessed for impairment on a periodic basis or if any indicators of impairment exist. Certain fixed assets related to the Company’s turnkey security screening program in Mexico are not currently in use. As of March 31, 2016, the net value of these assets is approximately $15 million, which is included in property and equipment in the condensed consolidated balance sheet.
Revenue Recognition	Revenue Recognition The Company recognizes revenue from sales of products upon shipment when title and risk of loss passes, and when terms are fixed and collection is probable. Revenue from services includes after-market services, installation and implementation of products, and turnkey security screening services. Generally, revenue from services is recognized when the services are performed. The portion of revenue for the sale attributable to installation is deferred and recognized when the installation service is provided. In an instance where terms of sale include subjective customer acceptance criteria, revenue is deferred until the Company has achieved the acceptance criteria. Concurrent with the revenue recognition, the Company accrues estimated product return reserves and warranty expenses. Critical judgments made by management related to revenue recognition include the determination of whether or not customer acceptance criteria are perfunctory or inconsequential. The determination of whether or not customer acceptance terms are perfunctory or inconsequential impacts the amount and timing of revenue recognized. Critical judgments also include estimates of warranty reserves, which are established based on historical experience and knowledge of the product under warranty. In instances where a contract calls for multiple deliverables and such deliverables qualify as separate units of accounting, the Company may recognize revenue based on the value of the respective deliverables identified in the underlying contract. In connection with the agreement with the Servicio de Administración Tributaria (“SAT”) in Mexico , revenue is recognized based upon proportional performance, measured by the actual number of labor hours incurred divided by the total estimated number of labor hours for the project. The impact of changes in the estimated labor hours to service the agreement is reflected in the period during which the change becomes known. In this agreement, customer billings may be submitted for several separate deliverables including: monthly services, activation of services, training of customer personnel and consultation on the design and location of security scanning operations, among others. In the event that payments received from the customer exceed revenue recognition, deferred revenue is recorded. In the event that revenue recognition exceeds payments received from the customer, unbilled receivables are recorded. Revenues from out-of-warranty service maintenance contracts are recognized ratably over the term of such contracts. For services not derived from specific maintenance contracts, revenues are recognized as the services are performed. Deferred revenue for such services arises from payments received from customers for services not yet performed. On occasion, the Company receives advances from customers that are amortized against future customer payments pursuant to the underlying agreements. Such advances are classified in the condensed consolidated balance sheets as either a current or long-term liability depending on when the Company estimates the corresponding amortization to occur.
Business Combinations	Business Combinations The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired, and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, and trade names, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. During the three months ended March 31, 2016, the Company acquired all of the outstanding shares of capital stock of a distributor and manufacturer of electronic components in the United Kingdom, and a distributor and manufacturer of flex circuit and touch panel design products in California. The combined purchase prices consisted of cash payments at closing of $17.5 million, holdbacks of $2.6 million for potential indemnity claims and $12.5 million for the fair value of contingent consideration. The indemnity holdbacks are payable in fiscal 2017, if not used for indemnification claims. The combined purchase prices were allocated to the fair values of the net tangible and intangible assets. The combined allocations of intangible assets consisted of $20.4 million of goodwill and $7.8 million of identifiable intangible assets, which was comprised of $1.2 million of technology, $5.5 million of customer relationships, $0.9 million of trademarks and trade names, and $0.2 million of non-compete covenants.
Recent Accounting Updates Not Yet Adopted	Recent Accounting Updates Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) amending revenue recognition requirements for multiple-deliverable revenue arrangements. This update provides guidance on how revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. This determination is made in five steps: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The ASU is effective for fiscal years beginning after December 15, 2017 and for interim reporting periods within that reporting period. Earlier application is permitted only as of fiscal years beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has not yet selected a transition method and is currently evaluating the impact this ASU may have on its financial condition and results of operations. In July 2015, FASB issued an ASU amending some of the guidance on subsequent measurement of inventory. This ASU affects companies that are using first-in, first-out or average cost, or any other methods besides last-in, first out or the retail inventory method. This ASU is effective for fiscal years beginning after December 15, 2016, including interim reporting periods within that reporting period. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In September 2015, FASB issued an ASU simplifying measurement-period adjustments for acquisitions. This update provides guidance on how an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This amendment requires the acquirer to recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined rather than retrospectively. This ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within that reporting period. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In November 2015, FASB issued an ASU amending the classification of deferred taxes. Deferred tax liabilities and assets will now be classified as non-current. Previously, the deferred income tax assets and liabilities had to be separated into current and non-current. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If an entity applies the guidance prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within that reporting period. Earlier application is permitted. The Company has not yet adopted this ASU and its adoption is not expected to have a material effect on the Company’s financial statements. In January 2016, FASB issued an ASU which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within that reporting period. Early application is permitted. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In February 2016, the FASB issued an ASU which affects the accounting for leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The amendment also will require qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within that reporting period. Early application is permitted. The Company has not yet adopted this update and is currently evaluating the impact it may have on its financial condition and results of operations. In April and March 2016, the FASB issued an ASU clarifying the implementation guidance on licensing and the identification of performance obligations considerations, and the implementation guidance on principal versus agent considerations. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within that reporting period, with early adoption permitted as of the original effective date. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations. In March 2016, the FASB issued an ASU relating to employee share-based payment accounting. This guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within that reporting period. The Company has not yet adopted this ASU and is currently evaluating the impact it may have on its financial condition and results of operations.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	9 Months Ended
	Mar. 31, 2016
Basis of Presentation
Schedule of computation of basic and diluted earnings per share	The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Net income for diluted earnings per share calculation $ $ $ $ Weighted average shares outstanding for basic earnings per share calculation Dilutive effect of stock awards Weighted average shares outstanding for diluted earnings per share calculation Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ Shares excluded from computation of diluted net income per share: Weighted average stock options excluded from computation due to anti-dilutive effect
Summary of fair values of financial assets and liabilities	The fair values of our financial assets and liabilities as of June 30, 2015 and March 31, 2016 are categorized as follows (in thousands): June 30, 2015 March 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Equity securities $ $ $ — $ $ $ — — $ Insurance company contracts — — — — Interest rate contract — ) — ) — ) — ) Total assets $ $ $ — $ $ $ $ — $ Liabilities — Contingent payment obligations $ — $ — $ $ $ — $ — $ $

Balance Sheet Details (Tables)

Balance Sheet Details (Tables)	9 Months Ended
	Mar. 31, 2016
Balance Sheet Details
Schedule of selected balance sheet accounts	The following tables provide details of selected balance sheet accounts (in thousands): June 30, 2015 March 31, 2016 Accounts receivable $ $ Less allowance for doubtful accounts ) ) Total $ $ June 30, 2015 March 31, 2016 Raw materials $ $ Work-in-process Finished goods Total $ $ Estimated Useful June 30, March 31, Lives 2015 2016 Land N/A $ $ Buildings, civil works and improvements 5 - 40 years Leasehold improvements 1 - 20 years Equipment and tooling 3 - 10 years Furniture and fixtures 3 - 13 years Computer equipment 1 - 5 years Computer software 3 - 10 years Construction in process N/A Total Less accumulated depreciation and amortization ) ) Property and equipment, net $ $

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets
Schedule of carrying value of goodwill	The changes in the carrying value of goodwill for the nine-month period ended March 31, 2016 were as follows (in thousands): Security Healthcare Optoelectronics and Manufacturing Consolidated Balance as of June 30, 2015 $ $ $ $ Goodwill acquired or adjusted during the period — Foreign currency translation adjustment ) ) ) Balance as of March 31, 2016 $ $ $ $
Schedule of intangible assets	Intangible assets as of June 30, 2015 and March 31, 2016 were as follows (in thousands): June 30, 2015 March 31, 2016 Weighted Average Lives Gross Carrying Value Accumulated Amortization Intangibles Net Gross Carrying Value Accumulated Amortization Intangibles Net Amortizable assets: Software development costs 7 years $ $ $ $ $ $ Patents 17 years Developed technology 11 years Customer relationships/backlog 7 years Total amortizable assets Non-amortizable assets: Trademarks — — Total intangible assets $ $ $ $ $ $
Schedule of estimated future amortization expense	At March 31, 2016, the estimated future amortization expense was as follows (in thousands): Fiscal Years 2016 (remaining 3 months) $ 2017 2018 2019 2020 2021 2022 and thereafter (including assets that have not yet begun to be amortized) Total $

Borrowings (Tables)

Borrowings (Tables)	9 Months Ended
	Mar. 31, 2016
Borrowings
Schedule of long-term debt	Long-term debt consisted of the following (in thousands): June 30, 2015 March 31, 2016 Term loans $ $ Other long-term debt Less current portion of long-term debt Long-term portion of debt $ $

Impairment, restructuring and22

Impairment, restructuring and other charges (Tables)	9 Months Ended
	Mar. 31, 2016
Impairment, restructuring and other charges.
Summary of impairment, restructuring and other charges	The following table summarizes the impairment, restructuring and other charges (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Impairment of fixed assets $ — $ — $ — $ Impairment of minority interest investment — — — Total impairment charges — — — Employee termination costs Charges related to government contract issues Charges related to class action litigation — — — Legal settlement and related costs — — Acquisition costs — — Other Total impairment, restructuring and other charges $ $ $ $

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Mar. 31, 2016
Stockholders' Equity
Schedule of stock-based compensation expense recorded in the condensed consolidated statements of operations	The Company recorded stock-based compensation expense in the condensed consolidated statements of operations as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Cost of goods sold $ $ $ $ Selling, general and administrative Research and development Stock-based compensation expense before taxes $ $ $ $ Less: related income tax benefit ) ) ) ) Stock-based compensation expense, net of estimated taxes $ $ $ $
Summary of stock option activity	Number of Options Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at June 30, 2015 $ Granted $ Exercised ) $ Expired or forfeited ) $ Outstanding at March 31, 2016 $ 4.2 years $ Exercisable at March 31, 2016 $ 3.9 years $
Summary of restricted stock award and RSU award activity	Shares Weighted- Average Fair Value Nonvested at June 30, 2015 $ Granted Vested ) Forfeited ) Nonvested at March 31, 2016 $

Retirement Benefit Plans (Table

Retirement Benefit Plans (Tables)	9 Months Ended
	Mar. 31, 2016
Retirement Benefit Plans
Schedule of net periodic pension expense	The components of net periodic pension expense are as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Service cost $ $ $ $ Amortization of prior service cost Net periodic pension expense $ $ $ $

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Mar. 31, 2016
Commitments and Contingencies
Schedule of changes in warranty provisions	The following table presents changes in warranty provisions (in thousands): Nine Months Ended March 31, 2015 2016 Balance at beginning of period $ $ Additions and adjustments Reductions for warranty repair costs ) ) Balance at end of period $ $

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Mar. 31, 2016
Segment Information
Schedule of operations and identifiable assets by industry segment	The following tables present the operations and identifiable assets by industry segment (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Revenues (1) — by Segment: Security Division $ $ $ $ Healthcare Division Optoelectronics and Manufacturing Division, including intersegment revenues Intersegment revenues elimination ) ) ) ) Total $ $ $ $ Three Months Ended March 31, Nine Months Ended March 31, 2015 2016 2015 2016 Operating income (loss) — by Segment: Security Division $ $ $ $ Healthcare Division ) Optoelectronics and Manufacturing Division Corporate ) ) ) ) Eliminations (2) ) ) ) ) Total $ $ $ $ June 30, 2015 March 31, 2016 Assets (1) — by Segment: Security Division $ $ Healthcare Division Optoelectronics and Manufacturing Division Corporate Eliminations (2) ) ) Total $ (1) The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: (a) For each of the three months ended March 31, 2015 and 2016, one customer, SAT in Mexico, accounted for 14% of total net revenues. For the nine months ended March 31, 2015 and 2016, SAT accounted for 13% and 14% of total net revenues, respectively. (b) For the nine-month period ended March 31, 2015, the U.S. Department of Defense, under a Foreign Military Sale, accounted for 10% of net revenues. (c) At March 31, 2016, one international customer accounted for 11% of accounts receivable. No customer accounted for greater than 10% of accounts receivable at June 30, 2015. (2) Eliminations within operating income primarily reflect the change in the elimination of intercompany profit in inventory not-yet-realized. Eliminations in assets reflect the amount of intercompany profits in inventory as of the balance sheet date. Such intercompany profit will be realized when inventory is shipped to the external customers of the Security and Healthcare Divisions.

Basis of Presentation (Details)

Basis of Presentation (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares	Mar. 31, 2015USD ($)$ / sharesshares	Mar. 31, 2016USD ($)item$ / sharesshares	Mar. 31, 2015USD ($)$ / sharesshares
Description of Business
Number of operating segments | item			3
Computation of basic and diluted earnings per share
Net income for diluted earnings per share calculation | $	$ 9,343	$ 13,228	$ 20,256	$ 42,718
Weighted average shares outstanding-for basic earnings per share calculation	19,336	19,801	19,604	19,810
Dilutive effect of stock awards (in shares)	605	728	657	705
Weighted average shares outstanding-for diluted earnings per share calculation	19,941	20,529	20,261	20,515
Basic net income per share (in dollars per share) | $ / shares	$ 0.48	$ 0.67	$ 1.03	$ 2.16
Diluted net income per share (in dollars per share) | $ / shares	$ 0.47	$ 0.64	$ 1	$ 2.08
Shares excluded from computation of diluted net income per share:
Weighted average stock options excluded from computation due to anti-dilutive effect	70	49	39	43

Basis of Presentation - Fair Va

Basis of Presentation - Fair Value (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Jun. 30, 2015
Property and equipment
Net value of turnkey security screening program assets at Mexico	$ 15,000
Business Combinations
Goodwill	122,297	$ 98,167
Series of Individually Immaterial Business Acquisitions
Business Combinations
Cash payments at closing	17,500
Goodwill	20,400
Intangible assets acquired	7,800
Series of Individually Immaterial Business Acquisitions | Indemnity holdbacks
Business Combinations
Contingent consideration	2,600
Series of Individually Immaterial Business Acquisitions | Fair value
Business Combinations
Contingent consideration	12,500
Recurring
Fair value of financial instruments
Equity securities	317	2,441
Insurance company contracts	20,651	20,100
Interest rate contract	(22)	(41)
Total assets	20,946	22,500
Liabilities - Contingent payment obligations	21,832	17,175
Recurring | Level 1
Fair value of financial instruments
Equity securities	317	291
Total assets	317	291
Recurring | Level 2
Fair value of financial instruments
Equity securities		2,150
Insurance company contracts	20,651	20,100
Interest rate contract	(22)	(41)
Total assets	20,629	22,209
Recurring | Level 3
Fair value of financial instruments
Total assets	0	0
Liabilities - Contingent payment obligations	21,832	$ 17,175
Technology | Series of Individually Immaterial Business Acquisitions
Business Combinations
Intangible assets acquired	1,200
Customer relationships | Series of Individually Immaterial Business Acquisitions
Business Combinations
Intangible assets acquired	5,500
Trademarks and trade names | Series of Individually Immaterial Business Acquisitions
Business Combinations
Intangible assets acquired	900
Non-compete covenants | Series of Individually Immaterial Business Acquisitions
Business Combinations
Intangible assets acquired	$ 200

Balance Sheet Details (Details)

Balance Sheet Details (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Jun. 30, 2015
Accounts receivable
Accounts receivable	$ 165,406		$ 165,406		$ 184,419
Less allowance for doubtful accounts	(5,619)		(5,619)		(5,900)
Total	159,787		159,787		178,519
Inventories
Raw materials	139,631		139,631		131,373
Work-in-process	46,749		46,749		45,386
Finished goods	104,712		104,712		53,662
Total	291,092		291,092		230,421
Property and equipment
Property and equipment, gross	385,560		385,560		390,900
Less: accumulated depreciation and amortization	(198,356)		(198,356)		(165,197)
Property and equipment, net	187,204		187,204		225,703
Depreciation expense	13,100	$ 12,500	39,100	$ 42,700
Land
Property and equipment
Property and equipment, gross	14,498		14,498		14,419
Buildings, civil works and improvements
Property and equipment
Property and equipment, gross	169,259		$ 169,259		170,373
Buildings, civil works and improvements | Minimum
Property and equipment
Estimated Useful Lives			5 years
Buildings, civil works and improvements | Maximum
Property and equipment
Estimated Useful Lives			40 years
Leasehold improvements
Property and equipment
Property and equipment, gross	9,086		$ 9,086		9,991
Leasehold improvements | Minimum
Property and equipment
Estimated Useful Lives			1 year
Leasehold improvements | Maximum
Property and equipment
Estimated Useful Lives			20 years
Equipment and tooling
Property and equipment
Property and equipment, gross	149,304		$ 149,304		152,518
Equipment and tooling | Minimum
Property and equipment
Estimated Useful Lives			3 years
Equipment and tooling | Maximum
Property and equipment
Estimated Useful Lives			10 years
Furniture and fixtures
Property and equipment
Property and equipment, gross	3,360		$ 3,360		3,475
Furniture and fixtures | Minimum
Property and equipment
Estimated Useful Lives			3 years
Furniture and fixtures | Maximum
Property and equipment
Estimated Useful Lives			13 years
Computer equipment
Property and equipment
Property and equipment, gross	18,381		$ 18,381		17,147
Computer equipment | Minimum
Property and equipment
Estimated Useful Lives			1 year
Computer equipment | Maximum
Property and equipment
Estimated Useful Lives			5 years
Computer software
Property and equipment
Property and equipment, gross	16,439		$ 16,439		16,612
Computer software | Minimum
Property and equipment
Estimated Useful Lives			3 years
Computer software | Maximum
Property and equipment
Estimated Useful Lives			10 years
Construction in process
Property and equipment
Property and equipment, gross	$ 5,233		$ 5,233		$ 6,365

Goodwill and Intangible Asset30

Goodwill and Intangible Assets (Details) $ in Thousands	9 Months Ended
	Mar. 31, 2016USD ($)
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 98,167
Goodwill acquired or adjusted during the period	25,188
Foreign currency translation adjustment	(1,058)
Balance at the end of the period	122,297
Security Division
Changes in the carrying amount of goodwill
Balance at the beginning of the period	29,730
Goodwill acquired or adjusted during the period	1,634
Foreign currency translation adjustment	14
Balance at the end of the period	31,378
Healthcare Division
Changes in the carrying amount of goodwill
Balance at the beginning of the period	43,182
Foreign currency translation adjustment	(312)
Balance at the end of the period	42,870
Optoelectronics and Manufacturing Division
Changes in the carrying amount of goodwill
Balance at the beginning of the period	25,255
Goodwill acquired or adjusted during the period	23,554
Foreign currency translation adjustment	(760)
Balance at the end of the period	$ 48,049

Goodwill and Intangible Asset31

Goodwill and Intangible Assets - Intangible (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Jun. 30, 2015
Amortizable assets:
Gross Carrying Value	$ 58,949		$ 58,949		$ 53,853
Accumulated Amortization	14,453		14,453		16,428
Total	44,496		44,496		37,425
Total intangible assets
Gross Carrying Value	72,826		72,826		66,841
Intangible assets, net	58,373		58,373		50,413
Amortization expense	1,400	$ 800	3,400	$ 2,700
Estimated future amortization expense
2016 (remaining 6 months)	2,271		2,271
2,017	7,792		7,792
2,018	7,711		7,711
2,019	6,282		6,282
2,020	6,254		6,254
2,021	3,717		3,717
2022 and thereafter, including assets that have not yet begun to be amortized	10,469		10,469
Total	44,496		44,496		37,425
Trademarks
Non-amortizable assets:
Gross Carrying Value	13,877		$ 13,877		$ 12,988
Software development costs
Intangible assets
Weighted Average Lives			7 years		7 years
Amortizable assets:
Gross Carrying Value	21,522		$ 21,522		$ 24,631
Accumulated Amortization	3,330		3,330		7,500
Total	18,192		18,192		17,131
Estimated future amortization expense
Total	18,192		18,192		$ 17,131
Capitalized software development costs	700	$ 900	$ 2,100	$ 2,200
Patents
Intangible assets
Weighted Average Lives			17 years		17 years
Amortizable assets:
Gross Carrying Value	8,033		$ 8,033		$ 7,206
Accumulated Amortization	1,191		1,191		994
Total	6,842		6,842		6,212
Estimated future amortization expense
Total	6,842		$ 6,842		$ 6,212
Developed technology
Intangible assets
Weighted Average Lives			11 years		11 years
Amortizable assets:
Gross Carrying Value	15,449		$ 15,449		$ 13,397
Accumulated Amortization	5,537		5,537		4,528
Total	9,912		9,912		8,869
Estimated future amortization expense
Total	9,912		$ 9,912		$ 8,869
Customer relationships/backlog
Intangible assets
Weighted Average Lives			7 years		7 years
Amortizable assets:
Gross Carrying Value	13,945		$ 13,945		$ 8,619
Accumulated Amortization	4,395		4,395		3,406
Total	9,550		9,550		5,213
Estimated future amortization expense
Total	$ 9,550		$ 9,550		$ 5,213

Borrowings (Details)

Borrowings (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2016	Jun. 30, 2015	Sep. 30, 2012
Borrowings
Amount outstanding	$ 125,000
Term loans	7,406	$ 8,935
Other long-term debt	2,123	2,422
Long-term debt	9,529	11,357
Less current portion of long-term debt	2,759	2,801
Long-term portion of debt	6,770	$ 8,556
Revolving credit facility
Borrowings
Maximum borrowing capacity	450,000
Sub-limit available for letters of credit	375,000
Increase in the credit agreement's borrowing capacity available under certain circumstances	$ 200,000
Unused commitment fee (as a percent)	0.20%
Amount outstanding	$ 125,000
Amount outstanding under lines-of-credit	$ 6,100
Revolving credit facility | Minimum
Borrowings
Unused commitment fee (as a percent)	0.20%
Revolving credit facility | Maximum
Borrowings
Unused commitment fee (as a percent)	0.35%
Revolving credit facility | LIBOR
Borrowings
Variable basis rate	LIBOR
Interest rate margin (as a percent)	1.25%
Revolving credit facility | LIBOR | Minimum
Borrowings
Interest rate margin (as a percent)	1.25%
Revolving credit facility | LIBOR | Maximum
Borrowings
Interest rate margin (as a percent)	2.00%
Bank lines-of-credit
Borrowings
Amount outstanding	$ 0
Amount outstanding under lines-of-credit	34,200
Available credit facility	20,100
Total cash borrowing sub-limit	$ 1,400
Seven-year term loan due in fiscal 2020
Borrowings
Principal amount			$ 11,100
Term of loan	7 years
Effective interest rate (as a percent)	2.20%
Seven-year term loan due in fiscal 2020 | LIBOR
Borrowings
Variable basis rate	LIBOR
Interest rate margin (as a percent)	1.25%

Impairment, restructuring and33

Impairment, restructuring and other charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Jun. 30, 2015
Impairment, Restructuring and Other Charges [Line Items]
Impairment of fixed assets			$ 5,888
Impairment of minority interest investment			2,853
Total impairment charges			8,741
Employee termination costs	$ 2,158	$ 1,606	2,700	$ 1,930
Charges related to government contract issues	496	1,848	496	3,614
Charges related to class action litigation				625
Legal settlement and related costs	125		1,843
Acquisition costs	1,438		1,438
Other	320	166	416	256
Total impairment, restructuring and other charges	4,537	$ 3,620	15,634	$ 6,425
Other accrued expenses
Impairment, Restructuring and Other Charges [Line Items]
Accrued restructuring and other charges	$ 3,400		$ 3,400		$ 3,400

Stockholders' Equity (Details)

Stockholders' Equity (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016USD ($)shares	Mar. 31, 2015USD ($)	Mar. 31, 2016USD ($)itemshares	Mar. 31, 2015USD ($)shares	Apr. 30, 2016USD ($)
Share Repurchase Program
Number of shares repurchased | shares			1,201,402	116,431
Stock repurchased, authorized amount					$ 1,000
Value of shares repurchased			$ 73,400	$ 23,400
Number of repurchased shares authorized | shares	63,000		63,000
Number of share-based employee compensation plans | item			2
Stock-based compensation expense before taxes	$ 4,828	$ 6,057	$ 13,582	18,135
Less: related income tax benefit	(1,850)	(2,344)	(5,184)	(7,105)
Stock-based compensation expense, net of estimated taxes	2,978	3,713	$ 8,398	11,030
Stock-based compensation, other disclosures
Weighted-average period			1 year 9 months 18 days
Stock Options
Stock-based compensation, other disclosures
Unrecognized compensation cost	900		$ 900
Restricted stock and RSU
Stock-based compensation, other disclosures
Unrecognized compensation cost	16,600		16,600
Cost of good sold
Share Repurchase Program
Stock-based compensation expense before taxes	302	278	899	773
Selling, general and administrative
Share Repurchase Program
Stock-based compensation expense before taxes	4,456	5,718	12,475	17,206
Research and development
Share Repurchase Program
Stock-based compensation expense before taxes	$ 70	$ 61	$ 208	$ 156

Stockholders' Equity - Stock Op

Stockholders' Equity - Stock Option Activity (Details 2) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Number of Options
Outstanding at the beginning of the period (in shares)	1,012,650
Granted (in shares)	33,088
Exercised (in shares)	(106,974)
Expired or forfeited (in shares)	(5,347)
Outstanding at the end of the period (in shares)	933,417
Exercisable at the end of the period (in shares)	858,961
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 27.30
Granted (in dollars per share)	74.48
Exercised (in dollars per share)	28.03
Expired or forfeited (in dollars per share)	65.21
Outstanding at the end of the period (in dollars per share)	28.67
Exercisable at the end of the period (in dollars per share)	$ 25.31
Weighted-Average Remaining Contractual Term
Outstanding at the end of the period	4 years 2 months 12 days
Exercisable at the end of the period	3 years 10 months 24 days
Aggregate Intrinsic Value
Outstanding at the end of the period	$ 34,753
Exercisable at the end of the period	$ 34,545
Shares
Nonvested at the beginning of the period (in shares)	659,906
Granted (in shares)	332,701
Vested (in shares)	(389,617)
Forfeited (in shares)	(48,312)
Nonvested at the end of the period (in shares)	554,678
Weighted-Average Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 63.75
Granted (in dollars per share)	73.12
Vested (in dollars per share)	65.24
Forfeited (in dollars per share)	67.66
Nonvested at the end of the period (in dollars per share)	$ 67.99
Performance-based restricted stock units
Shares
Granted (in shares)	139,300	151,469
Performance-based restricted stock units | Minimum
Weighted-Average Fair Value
Payout as a percentage of the original number of shares awarded or units awarded, which are converted into shares of the Company's common stock	0.00%
Performance-based restricted stock units | Maximum
Weighted-Average Fair Value
Payout as a percentage of the original number of shares awarded or units awarded, which are converted into shares of the Company's common stock	250.00%
2012 Plan
Weighted-Average Fair Value
Securities available for grant	2,792,149
2012 Plan | Restricted stock and RSU
Weighted-Average Fair Value
Number of shares available for grant reduced for each award granted	1.87
Number of shares available for grant increased for each award forfeited and returned	1.87

Retirement Benefit Plans (Detai

Retirement Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net Periodic Benefit Costs
Service cost	$ 213	$ 249	$ 638	$ 779
Amortization of prior service cost	105	202	315	606
Net periodic pension expense	318	451	953	1,385
Contributions made by the entity to the defined benefit plans	0	0	200	1,000
Contributions made by the entity to defined contribution plans	$ 1,100	$ 1,100	$ 3,400	$ 3,300

Commitments and Contingencies37

Commitments and Contingencies (Details) $ in Thousands	9 Months Ended
	Mar. 31, 2016USD ($)item	Mar. 31, 2015USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2012USD ($)
Contingent Acquisition Obligations
Maximum amount of future payments under contingent consideration	$ 34,000
Payments of additional contingent consideration	12,500
Payments of contingent consideration	$ 800
Number of acquisitions | item	2
Reductions in fair value of contingent payment obligations	$ 7,100
Environmental Contingencies
Number of investigations discovering soil and groundwater contamination at Hawthorne, CA facility | item	1
Changes in provision for warranties
Balance at beginning of period	$ 12,738	$ 11,923
Warranty claims provision	8,596	3,314
Settlements made	(7,361)	(3,047)
Balance at end of period	13,973	$ 12,190
Mexican government
Advances from Customers
Advances from customers	31,300			$ 100,000
Other liabilities
Contingent Acquisition Obligations
Contingent payment obligations	$ 21,800		$ 17,200
Royalty payments
Contingent Acquisition Obligations
Purchase agreements containing royalty payments, number | item	1

Segment Information (Details)

Segment Information (Details)	9 Months Ended
	Mar. 31, 2016item
Segment Information
Number of identifiable industry segments	3

Segment Information - Operation

Segment Information - Operations and Identifiable Assets (Details 2) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2016USD ($)	Mar. 31, 2015USD ($)	Mar. 31, 2016USD ($)customer	Mar. 31, 2015USD ($)	Jun. 30, 2015USD ($)customer
Operations and identifiable assets by industry segment
Total revenues	$ 210,804	$ 215,375	$ 608,193	$ 691,601
Income (loss) from operations	13,344	$ 18,455	29,822	$ 61,180
Segments assets	$ 1,075,302		$ 1,075,302		$ 979,674
Servicio de Administracin Tributaria in Mexico | Revenue | Customer
Operations and identifiable assets by industry segment
Percentage of benchmark derived from specified source	14.00%	14.00%	14.00%	13.00%
International customers | Accounts receivable
Operations and identifiable assets by industry segment
Number Of Customers | customer			1		0
International customers | Accounts receivable | Customer
Operations and identifiable assets by industry segment
Percentage of benchmark derived from specified source			11.00%
U.S. Department of Defense | Revenue | Customer
Operations and identifiable assets by industry segment
Percentage of benchmark derived from specified source				10.00%
Corporate
Operations and identifiable assets by industry segment
Segments assets	$ 107,443		$ 107,443		$ 125,174
Operating Segments | Security Division
Operations and identifiable assets by industry segment
Total revenues	110,550	$ 99,164	300,680	$ 349,608
Income (loss) from operations	14,554	13,266	29,723	50,926
Segments assets	552,664		552,664		470,808
Operating Segments | Healthcare Division
Operations and identifiable assets by industry segment
Total revenues	49,113	59,383	156,126	176,710
Income (loss) from operations	(188)	3,707	6,130	11,258
Segments assets	202,924		202,924		223,412
Operating Segments | Optoelectronics and Manufacturing Division
Operations and identifiable assets by industry segment
Total revenues	61,306	65,291	184,414	199,912
Income (loss) from operations	5,325	5,008	14,078	13,701
Segments assets	216,640		216,640		164,922
Operating Segments | Corporate
Operations and identifiable assets by industry segment
Income (loss) from operations	(6,077)	(3,498)	(19,182)	(13,748)
Eliminations
Operations and identifiable assets by industry segment
Total revenues	(10,165)	(8,463)	(33,027)	(34,629)
Income (loss) from operations	(270)	$ (28)	(927)	$ (957)
Segments assets	$ (4,369)		$ (4,369)		$ (4,642)