OSIS - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the OSI Systems Inc.

First Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Alan Edrick, Chief Financial Officer. begin. may you Sir,

Alan Edrick

President morning and Executive you quarter of Vice here the the fiscal Chopra, and Good Angeles Systems in I’m home OSI we and OSI joining call. welcome Alan conference I’m of our Deepak with Edrick, President Champion today first CEO. and you. Headquartered for Los Dodgers thank World us. Systems and Lakers, Thank XXXX and to CFO you

review you fiscal We and join can our are we our for financial results as outlook that XXXX. discuss and pleased operational us updated

to Before Litigation any like forward-looking company on the will of we and that Act Reform statement wishes information discuss include in forward-looking our remind statements discussion currently advantage based Securities update QX take respect Safe results, the subsequent of are or XXXX such Harbor information company I All today’s the to to made to would forward-looking provisions on forward-looking of obligation and statements. or statements call this Private otherwise. everyone the new available events based undertakes no with

During describing company’s today’s and both to the results. measures, financial call, refer non-GAAP we when GAAP

first overview of a outlook our I updated and non-GAAP reconciliation today’s will company’s of GAAP and and a quarter a summary turn regarding discussion XXXX. to business. then for the the XXXX fiscal refer our fiscal an then over for of of and more finish call will results results with begin performance financial quantitative regarding measures detail the with Deepak earnings financial information of For for please measures figures, I those the to release. our of

of to COVID-XX hard pandemic. continuing working the are mitigate the impact We

the our to of remains our at preserving commitments on partners position customers employees. while long-term OSI and priorities deliver to company for the Our safety and success our Systems to

will we highlights. into jump some Now

pandemic, earnings of negative most fiscal on revenues of XX% XXXX per the we non-GAAP $X.X of impact Security our First, share division. up the despite record QX notably achieved in from QX

in reported XXXX last the to Second, in year-over-year XX.X% X.X% QX fiscal increase margin to period we in compared same significant a year. adjusted operating the

The in the Third, in was increase the bookings were book backlog start first XX% X.X, strong to year. ratio since to leading a of QX the bill fiscal very quarter.

of Finally, resulting flow we operating had another quarter $XX cash record flow first million. conversion quarter of strong in cash

Before turn the over to diving results, me more Deepak. deeply our into let financial call

Deepak Chopra

quarter across the you, good Thank Alan Overall, Alan performance, strong continued our despite we and and flow has earnings all of pleased first divisions fiscal impact COVID-XX. bookings are robust and morning. with as cash XXXX featuring mentioned

bookings X.X solid fiscal quarter, the book-to-bill a Our These half performance in strong QX’s for $XXX with of second led the to book-to-bill QX ratio of significant million the for pipeline ratio. bookings with enter We security starting a a about Talking into X.X each in continuing opportunities. XXXX, whole near-term for company, division’s Security backlog. were the division, position XXXX. fiscal growth

somewhat before, stretched not in We many the context been patterns. surprisingly, pandemic the order markets demand of as in the from mentioned improvement we have are seeing cycle have although historical end

technologies. Though faces We we have rapid order Airport And check the continue improve that during had CT International announce RTT Orion capacity. very machines Aviation, detection significant upgrade market systems the travel, impact very wins. QX Dual improvement customers previously for are as newer to this XXX a of explosive RTT certain international their opportunity COVID-XX machine DHL challenges cargo customer. quarter, on to screening airport screening and for had if to baggage were passenger announced taking important are airports In and not a the our infrastructure, and million multiple This scan signs XXX win to for several the an booking Machine. Hamad trace XXXs we notable provide infrastructure we a air involving an in due Qatar. seeing new contract Air Energy was pleased been the $XX to their aviation

As globally continues market mentioned the market the previous Air calls, and in cargo earlier growth. to logistics show

and ports had borders, area. QX continue in For in important several to wins reach. we this our expand We

During vehicle the provide announced for systems. MXX win our inspection quarter, cargo Mobile energy a $XX Eagle we contract million to high and

to award provide In an addition, announced we the Middle trace and and million earlier parcel both in including screening inspection and significant wrapper $XX Eagle and mobile customer cargo, portals our system. detection from baggage vehicle machines multiple this a week, platforms stationery, scan international East

Based installation, we support that that could fiscal and provide also project record of current customer’s will QX maintenance, on follow-on beyond. timeline, training XXXX in and beginning some continuing revenues and fiscal cushion contract. We this believe under into this XXXX we

internationally We continue work that customers the projects prospective critical on to in U.S. various with stages of and vendor selection. at are

Albania because to bookings sight well. remain in been government Puerto have by of On quarter, the very some Rico services, But well line with government positive September significant the significant you we in and do their in delayed. as circumstances, XX, strong, In we turnkey Typically, these are opportunities placed. but of of we continue to the opportunities have our ending contracts addition by and know, these in last several demand U.S. the evidenced U.S. year-end see international purchases

June Guatemala for at We reaching a for contract commenced forward Mexico optimistic has the we us materialized in not expired in part the Port operations remain conference of last Santos Tomasch XXXX but in and our although program also Castilla, call.

new executing and operation wound So looking we to have other down globally. forward turnkey programs on this

strong due about in U.S. bookings the pipeline sales opportunities very strength our in of including overall to are little and in talk guidance and the a security bit spite business, in will the robust Mexico. more of a it. our Alan We international raising shutdown

solid adjusted and us helped Opto’s and results the achieve operating and base Manufacturing year the strong generating uncertain income. delivered of times. record enters over division reach with customer during to Opto QX with The the QX again positive revenues, diversity backlog. Moving Optoelectronic has division, prior these results a Furthermore, growth X% geographic record

strong continue forward move fiscal fiscal to a with to Opto year. expect We XXXX

the the capitalize Finally, management increasing in division, on labs, increased over global great fiscal operations and QX the done books by income sales progress continue job part X-fold of ratio achieved Higher drove we the operating of a where X. for up patient basis comparison QX first space ships, pandemic. team a over and and typically quarter demand XX% in in strong products book the quarter has business a XXXX. with the division to in Healthcare This to benefit of demand. as with discussing growth its on monitoring bill healthcare much same The to supply chain which were

resources product to enhance management and families. in and have significant continue We and technologies to next remote new products several across year patient this R&D monitoring launch our slated invest for

momentum remainder our back hand laying pleased performance financial you. for industries We the we Alan the of various Security our the and will very call opening the continues level. look strong Opto groundwork the future happy to high With Overall, the the for I to the with before call our management. QX is XXXX. are challenges. with in over We division detail and business in performance. by talk to through OEM industry’s work questions. execute to execution a customers the performing strong am as for current is at Healthcare forward with I Thank about that, in Healthcare physical more bookings

Alan Edrick

you, Deepak. Thank

quarter Now greater fiscal review XXXX financial first the I detail. in will results our for

saw were Healthcare strong rebounded with portfolio fiscal the of manufacturing $XXX accessories. the of Our revenues divisions, incremental in as as $XXX mentioned, of first up channels a million XX% acquisition XXXX contract and by our sizable across growth fiscal QX security. sales with reduction in from Deepak growth in challenges revenues in group increased completed strong in geographic second in revenues million compared QX. and XXXX. year-over-year, to in division year monitoring Healthcare small quarter sales revenues from our We major as last sales Opto patient QX sales year-over-year the increased organic third-party strength as quarter significantly but pandemic-related supplies well XX% in half a driven and all prior Opto

a the significant largely due with aviation in the the were QX down to impact pandemic, strong, year-over-year, to Security a backlog. of growth division we extremely Security XX% As uncertain saw with sales X.X however, in expected, revenue and book in bookings of and reduction cargo customers. bill in

generally which XXXX Our of was Security stronger the margin gross gross margin points the XXX increase XX.X% of scale increase margins in margin driven U.S. gross strong Healthcare to revenue and margin with fiscal each was than QX international XX.X% sales. expansion Healthcare featuring of the due in Divisions. by basis QX The sales, our from economies associated up of carry

our favorable greater operational division’s results addition, gross our was gross change sales divisions, and a in than mix excellent other by proportion increase margin inherently In X Healthcare notable of overall sales revenue improvement gross in so margin. in in consolidated is an in OSI our was Security The given healthcare execution. the is margin higher and driven a

period volume As mentioned revenue, on mix margin among based will our from on period fluctuate factors. gross and to previous other calls,

diligently sequential QX these of cost uncertain work X% focus in SG&A XXXX Moving across decreasing these fiscal year-over-year efficiencies million each to initiatives the QX and sequentially. pandemic. cost the response a early manage decrease company during year-over-year decrease. XXXX expenses operating prudently and R&D of structure in structure expenses We reflected times. expenses, to in were X% $XX.X improve to its towards of with fiscal results divisions a representing our and adjusted heightened XX% the of X% our and end were The in

remain reductions dedicate as an and $X.X of our focused R&D Healthcare restructuring We In primarily impairment MSET contract million in charge. of to in we view exit the XXXX, resources the the vital QX of recorded was associated Security other we long-term streamline and to fiscal to product charge particularly cost and with innovative continue success This structure. workforce as to considerable on our other development, which business. we

fiscal taxes, of environment period last given interest-rate other from a flow Moving strong QX to interest $X.X million $X.X declining and in of the since prior cash net to and year. and because in year the decreased million interest borrowings, XXXX same expense reduced

XXXX in QX was QX tax the XX.X% of fiscal prior the compared $X.X effective of million impact On $X.X fiscal compared XX.X% benefits to QX our discrete of year recognized in to tax in fiscal discrete XXXX. comparable million of tax excluding XXXX the We items, rate tax in side, period.

result, in of we QX a fiscal a benefit of QX XXXX of provision recorded tax X.X% rate of under reported compared tax in a negative to XXXX. XX.X% GAAP As fiscal

the QX in adjusted of to turn our X.X% Overall, as non-GAAP to QX We discussion in and of favorable year line sound by control division adjusted in Security fiscal in our operational adjusted XX.X% face to XXXX defined XXXX. mix operating in our expansion pleased latest the fiscal quarter, increased especially execution, quarter a a top operating of compared operating revenues, in the The of margin significant headwinds. in improved prior Let’s with margin to release. margin XX.X% press XX.X% margin, our driven of were overall actions. now first cost from the

operating XX% in our expansion, of of revenues. significant by primarily a less last margin from sound healthcare reduction fiscal structure reported adjusted to These fiscal driven cost cost in QX execution. operational leveraging Opto by X% partially of XX.X% XXXX, in in fiscal a than the in customer fixed and division to offset margin were QX and controls, in security from last year Healthcare driven mix of strong improved in operating division sales, QX QX year part favorable with XX.X% doubling by XXXX, improvements more the in Our the

before, in about Moving and with cash flow, same the out as flow very QX inventory of $XX despite was in in This first $X.X prepare sales cash we $XX $XX quarter collections this and as depreciation flow, payments. million. stretch quarter we over produced In for increasing in million, fiscal generation. million the customers million QX, while a strong prior-year DSO to period. operating mentioned cash due of growth was higher as achieved was amortization was CapEx certain to timing compared

buyback program flow cash stock conversion of our part was exceptionally Our strong. allocation our overall were capital again We as strategy. active with

the During leaving under X.X under fiscal we shares shares buyback to million QX program, repurchase current repurchased XXX,XXX of approximately available our program. XXXX,

Our with modest no debt fiscal net maturities and XXXX. leverage balance strong is sheet significant until

guidance. to turn let’s Finally,

Though amount fiscal the announced August initial that Our both year. fiscal in raise modest contract. earnings XXXX strength range did given as contract and nonetheless the and are the replacing recently associated quarter of of XXXX potential a contract sales guidance revenues of Mexico the for pleased we first in in business turnkey the our Mexico, expired materialize, not with XXXX, remainder guidance our fiscal and to outlook for our results earnings our included

we result, $X.XX non-GAAP to $X.XXX guidance earnings to $X.X a the to increasing our to billion. As $X.XX guidance billion are from to range per billion $X.XX of $X.XX per to the are increasing from Similarly, of share $X.XX share. diluted share, range billion per revenue $X.XX we

see in amortization this year positive as second EPS reflects non-GAAP effects range and in proceeds the COVID-XX our the of have we impairment as We revenue will in excludes as believe The headwinds of the strong XXXX our discrete the non-cash and interest intangible then momentum of items. other estimates currently revenue well as anticipated continue reasonable to uncertainties expect the stemming the associated as impact of pandemic acquired we pandemic, potential expense but tax the We variables. to included duration as other non-GAAP guidance guidance pandemic given assets scope Security restructuring quarter and tax by and supported backlog. earnings believe and their the well division, charges, diluted fiscal build and from

efforts in and OSI, extent to and currently challenging to to impact steadfastly from continue innovative Actual remain filings. times, while investment acquisitions, However, financial share materially the may development to our anticipated in growth also solutions. estimates company’s In our of believe guidance. we which cost and the ranges and could diluted structure. continue other face of focused these on through our vary leadership these and our anticipated will difficult products COVID-XX SEC and could is in from managing product the acutely impact vary discussed to strategic the business non-GAAP the in due results enable revenues per also earnings the reflected uncertainties our risks We providing predict

like of happy At value thank OSI would the in and our we we to call dedication would contributing Finally safety take open for questions. face time, to Systems while to a uncertainty. to be to this opportunity this and creation and maintaining commitment of customers its our importantly, team the the global supporting for to stakeholders, the

Operator

Thank with [Operator first you. Our Martin from Capital. comes the line of Instructions] ROTH question Jeff

Your line is open.

Jeff Martin

are Thanks. you? and Good Deepak How morning, Alan.

Alan Edrick

Thank Jeff. you. Good,

Jeff Martin

Great.

that, and out the that and and guidance security backing commend a fact could despite you to there through the in you you am assumptions of billings new that’s strong raised I out First as wondering – I really right to of discuss to what driving we right continue factors go all, wanted Mexico what what on out guidance performance and is see. same or particularly your to in in quarter the degree if things the saw are start pushed within nice the the if QX changing the are factors? be segment, to to

Deepak Chopra

we it’s whether installation, challenge and quarter not ultimately, been whether provide that’s that’s also port, in off, conference challenge as in that uncertainty. to of projected compliment. to Deepak sign what said bookings, the it’s here. we we also travel a project actually uncertainty and is at is to equipment, whether that’s continue border sign And think infrastructure for has a the going their off the airport. the is on able Basically, it’s big we be had happen done, the the the crossing, the the challenge a last QX that and customer people to call, to the large works the the place get assemble what civil one, have international to equipment, to the the this to Jeff, to then Thanks last

bit being So, becomes when the the up. pipeline uncertainty know take of a to going they revenue are because able little longer, sign don’t we to

and shipments that a traffic place are. ground self-check as us, one the infrastructure, or hand, video other that this during they self-inspection, stuff are has tender people it facilities, security you used their increased strong, their and very are the doing international, the the up they rules this of increase to quite And their activity for customers, so air all build That the is the new running down, time way are get they is has all continue and stuff, more require because which positive On that especially the so their to demonstrations carriers the know, time, equipment. to getting their activity the the to positive office. and technology they they everybody that – the and house on to want to other means expand using to changing want that cargo is of some is been up – orders,

Jeff Martin

then see That’s but strong Security mentioned to healthcare could is half. great. year? address challenges, Opto should segment, be the should improve you in some going helpful. very that Okay, the progress you year. to which back throughout how this continue And the will sustained QX

Deepak Chopra

the this up continue to are going pandemic whole down. ultimately, am to of more seen in they How to based, I as like platforms to growth, they’re tele, more they for strength continue shot business for going way don’t this we at is done pandemic strength doing global. not I We’ve the its doing that. and this a more do think want long U.S., need the looks people and know, so is take is it. thing building except has not new going Yes, stay that changed to we tele, and slow checkup it’s home,

very All back. when also by people talking of elective monitoring people So some is way second surgeries it coming, week we are month upon week about we depends month. by are are coming about cautiously ultimately some seeing are talking

there taken do again have look monitoring, hospitals to larger to something. are. to opportunities next platforms their some new some upgrade at add that continue the time and And want Alan, opportunities can you what put more using this remote We are this the that shot equipment to

Alan Edrick

that that it covers think I nicely.

Jeff Martin

And allocation remaining you’re should here? You repayment we that Okay. acquisitions cash that with then should How versus of still almost cash having, the your how think of we X.X authorization. flow conversion capital flow and versus on repurchase think debt? about shares have, strong million

Alan Edrick

is this Alan. Jeff, Hey,

a flow at multifold look You’re when which and of we free of none has on at cash been look our we extremely basis right, it mutually capital is allocation, exclusive. strong kind

upfront do at our CapEx. It acquisitions at generation. upon The buyback, and big all look these part simultaneously, the net good strategy, a require do depending look are and stock of actually also reducing debt, new we we our low we of at which at turnkeys means we size then look So leverage with flow an part our course, our looked of we giving cash of four acquisition. could given things the some

and at So to four to looking we continue areas. expect all be

Jeff Martin

taking Great. helpful. That’s Thanks my for questions.

Operator

you. Thank

Our Larry CJS. next line of Solow question comes from with the

Your line open. is

Larry Solow

of gap, level in was long-term basis, bellwether was other for and things of my like high give Good. I half bookings. but of high level? back on and it’s turnkey. you used you the fill any on sounds to in because in could the and just and lot us contributing help Mexico Can contracts, a and a Good your there questions you what little a that afternoon clarify of years bit have terms I don’t year’s thanks I sort just it know from the this the but kind in just know good specific obviously out of break a an for taking several be of you congrats quarter guidance was to maybe partially or that

for So the just get out folks a little to there? color trying more

Alan Edrick

is this Good Larry, Sure, question. Alan.

with XXXX in $XX revenues reduced we Mexico a in we a more guidance for at our XXXXwas thought quarter fiscal our the rate. Embedded fiscal million. but associated year would of three revenues little worth bit have So were than of Mexico

concession that. price to We expected there in some be

noteworthy. no given of we are is strength upon longer in three particularly we guidance we overall raise the including think all that that business are able So the based to divisions

Larry Solow

okay. Right,

exact a basis essentially contract something, to from revenue that looks I by raising we you’re guess. million your $XX out was you’re about take it million $XX So If revenue XX should want specifics, that’s or normal know outsize an on margin, but we type I that contributor give revenue the coming don’t we’ve turnkey How margin. you to got look out? a that at but

Alan Edrick

strong above revenue were achieved is is coming the that that well taking corporate part we’re The the average. that is out. out doing business that and even strong margins delivering margins operating nice So so our earnings

a fiscal little more we Just of into million initially revenue $XX for Mexico. had ‘XX in guidance about of for embedded clarity, the our bit neighborhood

the that So portion came out. that’s

Larry Solow

that Okay, there have is parties it sounds they fair enough. that for to that And taken that enough alternatives, had the at anything come something do year, you that table you just know this this any you’ve it the is qualitatively, other something way can could has moved like it on, point? is back some

Deepak Chopra

large this Deepak optimistic, we only it Good scan, Yes, Larry, They very have still maintain. base rapper in service equipment conference question, the rapper and a can well. which and handle were call, is you of very last still here. said

might still think that we wait any we longer. happen, but not could So it

States. So pandemic, in can Mexico with to tough the with towards they They the have to got we it, environment not wise a economy more priorities traffic other still with at then But crossings stuff, maybe at reducing. but the as discussions pandemic still the look opportunities but North the bigger the border see economy you United do is got basically We it’s than on. move continue. business and decided to

belongs to lying have to want and decide want to what they have has are is do with them of done whenever Mexican anything. sure make very it down that for good equipment there them, it unused, we they job But to to remains intact. they Government it ultimately, equipment decide shutting the we our So

Larry Solow

good move had lot of obviously To okay. Right, a to talk on because things about.

deal of in bookings these strong it like lot timeline sounds of sort So and ‘XX short-term something, big up that the put things the a out called you obviously the, years expect delivery? you next is just bookings this midterm. Like nature on know post think you quarter of are that terms is couple discuss may run can you, the where of of very the I on this, just the but, number XXX, I into over to you XXX

Alan Edrick

Alan. Larry, is this

a take that. at I’ll shot So

The aggregated contract as ‘XX that that mentioned right. to into we you’re we’ll for then million, and begin for we’ve $XX the big quarter be recognize to see million revenues as contract already start fiscal early as The expect So beyond. revenues. well, our in to $XX we and continuing some fourth that Deepak mentioned started

the Sort little go and sort a time remainder Cargo longer of bit have shorter. generally basic and little of inspection vehicle generally a of cargo the go will bookings our lead products some bit a through inspection normal baggage cadence. can of products and

So those two that contracts. and fiscal some their ‘XX ‘XX a besides I of continuing delivered mentioned portion service items with for good in be will beyond fiscal into of some

Deepak Chopra

here. Deepak is And this

of the latter we has it demand. in into to beyond that feel revenue start a the very year this said, of I of lot pandemic Just at what the resulting to stuff year, because are that that Alan and and a U.S. and into go because there end it pushed in government, still as the election on script. lot confident been that travel fiscal restriction is happens and good ‘XX, there and part activity of to of said add and the my right, will time Normally, of is the stuff of about

Larry Solow

some touch and being probably lost $XX $X you’re, focused absolute was operating I right. on your piece the only side, $X spoke in just good security that, revenue basis, amount in think on Great in SG&A a consolidated you cost but profit. on basis of I to million down that to the and where some of think you Right, million a million

that as to would highs sound previous their So the segment margins of all say? I cuts without you’re sort longer-term to starts security is and this back, assume specifically, but hopefully with suppose come guiding revenue exceed fair in I

Alan Edrick

channels, opportunities of lots revenue for it Larry, exactly what expansion, will always the and Yes, the but margin be to right. mix. contributes geographic you’re products Both the

in in focused there that always but of Some which expansion, you’re more opportunities of kind made the strong achieving. are some we team cost is structure is be the made we more nature, variable, of changes for changes permanent, highly the and right on our nature operating in margin will

Larry Solow

free that that’s is, cash flow driving on the room conversion, just of run working us is there I increase, some what’s improvement? some another very just strong And then metrics. your the on think to where remind of lastly, more driven capital Alan, stand you And

Alan Edrick

operating great, flow. great cash flow, cash free Sure,

outstanding pleased driven it. remarks metrics, very Interestingly, that are DSO in being with prepared We our sort not of by up. the working capital mentioned I the is

longer customers some times, just bit these taking pay. in So little a are of to our

flow for opportunity to increase in DSOs when cash to us. bit we So actually an can get back to little free a more normalized That’s level. drops

side, investing picking more in as the are little we’ve of been we a our sales volumes year. here expecting inventory actually up through the be inventory similarly, balance the On bit to

strong cash expect the what’s year, balance really driven we a and going positivity have I metric think throughout of to continued flow. strong working a So profits, been it capital that the has we’re some

Larry Solow

for appreciate thanks Excellent, Great. it. the I call,

Operator

with Our comes question Thank you. next Sheila from [Operator line the Jefferies. Instructions] of Kahyaoglu

Your line is open.

Sheila Kahyaoglu

Hey, good like that in in customer, you morning, of wanted Security good to the about as well involvement I Eastern think I products. afternoon. Deepak, Middle it and of sort the some contract. turnkey terms as ask mentioned sounded

scope you expand ports cargo and you can program talk business? and your that your about just maybe So as

Deepak Chopra

tail. it’s Sheila. it’s to maintenance lot a turnkey is of and going service, continue. a not lot Thank both a it’s of It equipment you, project, cargo it’s installation, It it’s will have and equipment, aviation

years sale XX longer years, you As service. so a term know the equipment for that after and maintenance X, it’s normal of discontinues next that couple a

country of customer this ground Rapiscan. Now, and so that a good particular much the on already doesn’t mean equipment is with

service. $XX infrastructure, our this long-term expand. it, on particular order, right our So yes, it’s product call for continues equipment And it integrated But more, semi-turnkey maintenance, and million to line. training, now, support installation can lead more

Sheila Kahyaoglu

then Alan, was line, the good And Sorry, were top the decline the mixed a could – pretty on despite quarter in on mix all? you. tailwind, thank you tailwind. big the at security Okay, that what very elaborate decrementals in if

Alan Edrick

it’s margin, also. solid the things. across the strong very One, the the generated throughout say some really quarter had other were were various as would I businesses Sure, were successful some extremely product mix control that quite strong Group well. margins, we initiatives the two of in And turnkey then, of contribution our cost basic strong, and operating projects

margins So reductions strong all of in in that revenue led of light to, that as operating mentioned, you segment. very

Sheila Kahyaoglu

just on line. the top then And

You a the reason is U.S. is of fiscal probably the a elections mentioned for the world just think are given upgrades. lot U.S. is Why taking the to time weak, year-end. them would spend, implement I whereas of to pretty government this weak? actually the rest

I of So quite that square away. kind

Deepak Chopra

use to the This is the weak, would wouldn’t word situation. right, political have Deepak, countries different pushed the rest the Sheila. I that of world, I some say

so so to is with Some business some the and it. pandemic, that inspected things other, transport think with definitely the other ports how people we will aviation-related things through into on are more hand, this dependent the people election and continue. to going do various upon travel get with restriction, do more some even, U.S., don’t each they

to to equipment ended, upgrade is border happen. and to airport right, that pushed happen, just it’s be think they have they the requirements though right. to got to need ports, government, of the to upgrades the upgrade are some new has though that to is crossings eminent, year The upgrade The it their I of going done. going pushed the the some

Sheila Kahyaoglu

very you’re is the product thanks quite Okay. cycle, in short that good that Healthcare, you for And momentum the success? seeing these, answering it seen is What but me, last then question driving business. where for mentioned, you’ve did all is

Deepak Chopra

this our It’s central Well, very cardiology bedside business. though into installed is where consolidated next they bought, I most is patient so And what patient they of as in and sits one the infrastructure more our need some patient monitoring, station. seeing data which in call, they the much base all being more also expand, the as need monitoring our space, monitoring, to increase, momentum, it’s not equipment monitoring. right a beds, well-regarded we gets or are larger so bed

Sheila Kahyaoglu

you thank Okay, so much.

Operator

next Our B. Josh Nichols Riley. the Instructions] of comes from [Operator you. line Thank question with

is line Your open.

Josh Nichols

the an year Medical, or expected on Difficulty] – especially of can margin from the exceptionally color say for continued little types of demand? company these [Technical provide you contributions going rate you given the a continue growth quarter significant detail sustain can where to could this is additional forward, strong bit and

Alan Edrick

Alan. is this you. Good Josh, Thank Hey, question.

strong the not We XX% nice in at a year-over-year business a That particularly some to was growth see expect rate. momentum quarter. necessarily Healthcare continuing,

of is the margins In top the a this so business is and and that contribution line. margins, sensitive margins operating terms the to

quarter business. So the to in the to nice particular a revenues or a stay margins extremely would make the top the overall margins extent extent enhance opportunities to line margins, is The the similar grow, were in effect. you sensitive that there less, operating then to similar revenues business, this strong the have the contribution

Josh Nichols

increase the backlog $X that this is are little current of a billion wanted far is how an to you’re of as year year shipments be – to just seeing of as year recognized much how the bit then going expect bit this fiscal to little flow the although some backlog flow, ask, that do because this different, I of I trend And the given guess kind Alan. you expected delayed? in how’s order a Thanks, and

Alan Edrick

backlog months Good portion we’ve remaining a relatively you’re at question. year of of pretty with the the can will the estimates convert these to point It XXXX seen to from fluctuate can to earlier, in X the be through proxy. of From change but that be tends we what roughly fiscal course years. but our of thereafter. similar to of best lot based time Deepak in and year, remaining the and hearing think this upon half the what fiscal past backlog a that the to And time, seems converting good revenue from

Josh Nichols

far some expecting performance good markets things out in then that you’re area? products it operational like as hit Thanks. round Opto as you as just that of seeing specific to areas And out, strength just you’re or on or well. any relative particular Could weakness end looks

Deepak Chopra

it’s good Again, question, Deepak here.

all said and supplier and we always very to has fortunately, broad aerospace, those the base are customer Opto are that a business defense, broad lot have healthcare we OEM a the in not industries, healthcare, very Aerospace, U.S., there a in global, Europe Fortunately, industries, is and defense Europe. traction for it’s it’s for of if healthcare and even just the growth, it’s for also Asia, especially is in showing and U.S. industry.

original the manufacturer, much and also, that other we if that the supply OEM end-product obviously previous But back healthcare on compared So of some requirements. very impacted of because we equipment in in security. saw backlog people push end-users, they are product the our right, incoming quarter, the and would happened but or OEM come, the are or to to slowdown to better, as they that customers result the line there’s hand, other what they is predictability broad-based a can’t is like the suppliers, factories so of that of all pandemic,

we strength. some are happening our that them overall, also lot but in So at this we XX%? XXX%, is little going at Can industry we of on, of them at sometime the we So a can run XX%, places, is challenge impacted. that’s see ourselves showing and run bit international there can automotive them run factories

Josh Nichols

back guys. from Thanks, I’m all That’s in the me. queue.

Operator

questions to to like at you. time. I’m now Thank over no showing I closing back it for remarks. this turn further would Deepak

Deepak Chopra

is with thank you globally, time as Especially the you open, want call. call. so attending a I thank know everyone mentioned, is us all joining us. the market for challenging time employees. this very globally. took This X,XXX to still again for for listen want employees the Thank to much to to Alan I I

a great have We done our and stockholders very to well-being. to have continue to a customers are their thanks job to to very for and sensitive in patients you much. our their Thank They us. trust

Operator

this wonderful today’s you call. Thank disconnect. conference Everyone may day. Ladies for and your a now have participation, concludes you gentlemen,

OSI Systems (OSIS) 1 Nov 202021 Q1 Earnings call transcript