OSI Systems (OSIS) 18 Aug 212021 Q4 Earnings call transcript

Thank you for standing by. And welcome to the OSI Systems Fourth Quarter and Fiscal Year-End 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] As a reminder, today’s program is being recorded. to Vice host Officer. President like Alan today’s would Executive Edrick, and I introduce for your program, And Chief Financial go ahead, Please sir.

us President OSI XXXX year-end Systems. Good you I'm Systems here Executive you. fiscal and Deepak And Welcome President today. Chopra, conference to with joining OSI our Vice of thank and Edrick, CEO. I'm call. fourth CFO Well, and quarter today Alan and morning for thank the

our review today, financial with quarter and you press We operational are and for Earlier results year results. provide financial XXXX. release pleased we outlook our XXXX to and fiscal fourth to our a announcing fiscal our issued

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

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

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

the will of Systems managing continued priority metrics. been to safety of strong partners and the and environment, employees. new are our to across continuing we We on achieved this has major commitments our at delivery where customers fourth In OSI remain records our quarter, our ensuring COVID proud multiple while a

cover will we Now some highlights.

$XXX reported over First, the Opto record impressive the posted results. as quarter divisions a Security revenues, we XX% in and million prior growth representing year fourth

GAAP reported QX earnings adjusted was and a QX DPS in per earnings record up our adjusted non-GAAP share per we diluted and QX diluted record fiscal $X.XX, non-GAAP XX% XXXX. from fiscal Second, non-GAAP share

in full non-GAAP of the $X.XX, XX% year, For we EPS a delivered the year. increase over EPS prior non-GAAP

a full flow in $X fiscal year generated in cash to total quarter. we once of $XXX Fourth, again bringing million. XXXX million fiscal new Third, the for solid QX, flow during were record the operating cash bookings

over X.X. book-to-bill increase and with year our ratio end XXXX record approximately for XX% finally, X.X fiscal billion, a year. the sheet which at leverage is our XXXX entered net us. a with the beginning $X.X is for balance was backlog solid X.X QX, of fiscal a We backlog of in fiscal And nearly XXXX of and full Our fiscal

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

Systems OSI for environment. to Throughout the in employees call, And our our earnings creating fiscal committed you, Alan. COVID our while was call. workplace serving safe the XXXX, Thank customers, again, a ongoing welcome the company conference to

orders XX% starting Discussing Security the XX% Security fourth U.S. XXXX quarter the year-over-year bookings Global from products. through highlights ended backlog the to the increased more $XXX was XXXX much QX and comparable As delivered our over revenues XXXX end with and each increased depth, growth performance solid And we prior a Alan the division's in strong The were with QX QX fiscal team of year, XX% record with mentioned, period. backlog fiscal division international of a to bookings million. some XX% at the growth higher a of prevalent fiscal backlog. division’s XXXX than both division’s the revenue of division, customers. from year-end of QX relating

of During ongoing expanding even we Defense COVID and international agencies Department the logistics. presence were certain our spikes that projects, made quarter, travel with progress with the as successful regions continued in in and affect

IT large well managing turnkey and Our support platform data, and of and is inspection our is proprietary automation implemented that Rico, as use levels. aviation product and at customers with local facilitates authorities platform manage vendors. words, actively and continue CertScan which facilities, programs, our infrastructure are with to software our that to for services and integration for other to team standalone secure Albania equipment slowly interdiction, goods their continuing from utilize activity. tariffs be And in a pre-COVID Worldwide, used platform deployment other airport integration software often CertScan working by activity customers. systems customers this infrastructure. and are their programs CertScan, multiple These return cargo controls is checkpoints traction degrades Guatemala. the in in cyber customs to image the enforcement passenger inspection inspection continues inspection upgrade drug of see Puerto plans software security with perform and in can In our security to utilizing security equipment regarding The

end, air Baggage international of a international units before airport at announced we commercial Screening the RTT to CT airports cargo Our for be Shortly an received deployed system at in numerous Hold is as multiple well order, major at XXX quarter we this installed facilities. as which Asia. week RTT XXX

utilized various of providers the fiscal of packages. UPS, to DHL, expect very volume we announced year said FedEx, last segment in reopening customers, for cargo the continue worldwide the selected and the RTT from the as and economy. such cetera, efficient wins As logistics have screening by et also handle global this We in past, investing to upgrades in air is XXX effectively e-commerce during being growth

opportunities. recurring creates growing inspection ample base revenue equipment of Our installed also

provide international revenue both for customers recurring this and growth support QX from to cargo, repair, Of for note, deployed and are valued an that announced currently full and the $XX at we we year. vehicle quarter, of maintenance, a fiscal systems can in with the services customer contract and platforms to reported maintenance checkpoints. life baggage the continued in support we several inspection during cycle, our multi-year million As provide equipment’s at upgrades

Trace at cargo, We and ASME million under various also contract Rapiscan parcel for announced at Detection service another Systems systems which approximately systems operating critical facility. valued of are a infrastructure $X we and responsible vehicle and continuing

a significant Looking both of U.S. diverse ahead, to pipeline in opportunities international. backlog, the in division addition with XXXX enters healthy fiscal security and

platforms large our the servicing marketplace strong very industrial infrastructure and help in our generally OEM us and approach port currently flexible inspection utilizing that Our in customers. position technology to business. with edge identified to areas upgrades in new puts proven expenditures especially has and could U.S. us cutting generally, at legislation bill The a airport capture

will version business We the run. the from assess a impact long of the impact and for bill the our final have expect in positive to

intercompany division to comparable Optoelectronics in year of on a year, reached the division a the and Optoelectronics. including QX margin. adjusted in The the a revenues the In increase operating of total year. QX intercompany Moving Manufacturing QX, than period for $XXX million XX% generated last revenues XX% over while representing expanding $XX higher revenues million, including prior

a supply purchasing overall the excellent higher gauge through have definitely cases, In lead at but longer chain dynamics times and these costs, an integrated, Opto vertically the As activity sourcing is the working affecting company. we for we few seen are team challenges. is

working a did managing in related safe team environment and maintaining challenges, while pandemic wonderful countries. a to our customers different job Opto meeting commitments Our several

backlog, Opto’s Opto is quarter backlog division year. an division. believe given for ever Our fiscal well-positioned and the that XXXX yearend strong highest another We this for our

Healthcare reported onset degree year about fourth XX% prior result the to revenues of pandemic. Healthcare. quarter, the fiscal the from This driven In strong COVID Moving below fiscal fourth or related that $XX the quarter near very division by derives year. some of of the to quarter was the fourth prior demand heavy the million

approximately quarter, telemetry accessories. and During U.S. patient value order related the hospital we provide monitoring announced million for last an to the that $X

renewed purchasing provide Premier, monitoring We of to GPOs the contract largest patient an important Inc., one in States. United also group to systems the

substantial quarter products diagnostic our cardiology. in core fiscal new and made and monitoring fiscal R&D patient fourth develop in both to and offerings throughout enhance the XXXX, we During investments

rapid launched also QX has demonstrated cardiology with during performance and the in allowing fiscal an or is our We provides expected opportunities. triage growth the that analysis, Overall, I’m in challenges quarter, and initial our the intermittent to event find team suspected which handling grateful also in perseverance COVID XXXX, and to to for screening in LifeScreen related This very system, and fiscal XXXX beyond. Pro pleased product contribute events. arrhythmia

we optionality as may Europe America, North as Our manufacture paying support ability customers sub-assemblies for provides handle is in they and complete how off our it constraints supply us and systems global Asia to and arise. in

our to employees call wellbeing. serving Going that, our over look Alan while continuing their forward, will and I for general our talk take to focus and you. really in detail and guidance be opportunities capitalizing advances recurring and strategic on product and in core portfolio, of notable acquisitions technology revenues, markets, to making on and our care increasing our to financial opening performance Thank With turn to before going more call our wellbeing back about questions. I’m the the forward XXXX. fiscal physical

QX financial results now greater will I Deepak. you, the in Thank review detail.

XX% up geographic cargo channels XX% prior systems. the were across an explosive and our first driven over including growing products, multiple in strong and were of checkpoints Opto year, XXXX, each Security Security million, across months driven sales, year-over-year. by portfolio, $XXX.X the seen of inspection mentioned much continued growth revenues RTT and fiscal As sales QX intercompany earlier, the divisions. Opto nine XX% of in fiscal our year-over-year, including vehicle momentum product revenues by strength of and the increase detection

healthcare X.X%. by to our book-to-bill which in XXXX the the in outset fiscal fourth and in the was year-over-year showed QX partially XX%, QX, growth of largely was divisions for Asian respectively. quarter, sales strength QX, In reduction XX% fiscal these The in fact, two X%, by with XX% Opto’s at book-to-bill at strong our comparison was sales strength similar driven and the XX% revenues international QX Opto featured in offset strength The sales the operations. QX division pandemic.

the fiscal XX.X% slightly from the among QX gross the year, XX%. the due in revenues of divisions. was healthcare mix the prior of For were year primarily three XX.X% sales to The up down margin

Security gross the a on divisions coupled margin places division, in other revenue in Optoelectronics than while QX increased the some consolidated scale margin our was the division gross execution, gross operational which benefited division and Manufacturing the a expanded gross to highest economies no tends carries from margin. to carry we’ve growth to was solid relative pressure The proportion historically two significant Healthcare the of and margin lower there generally sales on And two Healthcare, of other boost as the the of growth sales the given three good the division strong in the of the healthcare While the margin with divisions. margin year-over-year consolidate sales gross divisions.

Our revenue gross period-to-period other margin factors. will among fluctuate on volume and mix from based

last Moving cost such increase manage year-over-year support our quarter travel prior to operating year. increase. expenses during SG&A of worked diligently expenses to each $XX a year, and were expenses our result comparatively in improve across divisions the the the of million and XX.X% XX% prudently in sales were million or in quarter compared development year-over-year increased as in expenses $XX.X expenses. structure. of XX.X% efficiencies of to of sales Research QX compared million the $X.X increased representing to We sales and to a same QX XX%

X.X% X.X% to As of compared a in percentage QX R&D was last of in year. sales, XXXX QX

Healthcare, fiscal $X charges increased in in prior approximately success resources Restructuring long-term million on to year. investment fiscal We R&D XXXX of dedicate focused legal down Security. the to lease $X.X of business. charges important which continue and product and anticipate of remain QX Security notably development, were view inclusive particularly to In our we innovative as XXXX, in we as we other considerable most in from termination R&D QX the million

taxes. interest and to Moving

interest result from QX $X.X million of in other Our in as reduced continued and $X.X net a expense XXXX, borrowings cash decreased light flow. the in of same to prior of million period, strong our year

was QX effective tax QX tax in XX.X% compared XX.X% of the the fiscal XXXX. fiscal to of On in rate side, XXXX,

discrete QX tax XXXX in in period. the was items, fiscal excluding tax a million $X of $X.X However, of non-GAAP rate QX discrete prior XX.X% to million tax of of benefit XXXX. comparable our to compared impact in fiscal tax We XX.X% year XXXX fiscal recognized in benefit QX effective compared of discreet the

XX.X% the discrete effective tax compared prior was For to the in full year XXXX year. fiscal rate XX.X% our excluding items, tax

in a Let’s was non-GAAP adjusted QX that adjusted compared division, non-GAAP increased discussion the to QX year-over-year now Healthcare margin in division a to offset to of favorable where fourth our divisions The of our two margin and in QX the division, Overall, fiscal XXXX QX year. reduction was to year’s logistics operating the turn a operating our of operating margin. and operating in of to prior growth in The fiscal were revenue adjusted increase absorb execution. to The research we operating an in year margin revenue in in our sound and certain comparable coming these operational XX mix operating the our due our driven component at expenses, development. investment quarter adjusted leveraged points in in basis and comparable operating Opto XXXX fixed cost from prior in change the as in XX.X% up strong sales significantly XX% adjusted by in including quarter, prior XX.X% XX% by margin adjusted costs due increases. improved Security margin

million XX% the cash We In revenue in depreciation was operating XXXX, given generated and record for in first $XX.X fourth XXXX $XXX in capital of in XXXX, as the substantial for and leading a fiscal Net result, cash growth investment projections XXXX. to was more fiscal QX revenue was move quarter $X.X the was significant flow. $X CapEx to amortization flow quarter and million in million cash increase Let's working nine fiscal a largely QX months. million. flow the

solid. Our be cash flow conversion to continues

X.X as facility we on for buyback We Under available headroom borrowings QX approximately no XXXX. XX, have under had program, of to shares providing in XXX,XXX repurchased June shares outstanding credit the million We approximately our opportunities. our ample authorization. purchase strategic current stock

approximately is under end X.X the net with guidance. leverage finally, facility of turn of our sheet strong let's balance at Our credit QX. And as to defined

anticipates of the or $X. per company and the to earnings XXXX, the billion range $X.XXX diluted $X.XX year revenues fiscal $X.XX to share, For in billion of non-GAAP range

due guidance the and company on revenue effects, While revenue estimates. charges, currently modest The security non-GAAP of as directional diluted to range, a guidance excludes we Opto total amortization potential impairment, in revenues comp. provide non-GAAP generally with earnings restructuring for guidance a division expense tax growth difficult items. interest EPS year-over-year and basis, in other solid discrete a reasonable well assume a tax and their assets reduction the believe acquired as associated intangible non-cash and We this reflect Healthcare revenue

revenues impact to the from vary could as guidance, the continued impact and to extent of growth COVID-XX scope results in also financial In could anticipated uncertainties share focused estimates face the well given However, discussed as and uncertainties and the filings. strategic predict. remain management is structure. through our to to and duration diluted the continued the difficult businesses times, other currently in materially other actual per and in variables, our and keenly product from our we of pandemic, the these may company's our and which on as reflected potential anticipated earnings acquisitions items SEC And the of other risks cost vary of non-GAAP challenging ranges investment development due

products revenues providing areas OSI have strong We focused continue we enable we we and our mentioned, and in solutions. forward. innovative Deepak and our As on as to our recurring are growing efforts should recurring revenues leadership believe move these

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

the Certainly. from line [Operator Larry CJS Instructions] Our first from question comes Solow of Securities.

question, please. Your

segments direction continued because or strength Thanks on And your with Great. healthcare taking the bit shows I of underlying growth. the fundamentals a after guys. really the morning, and Good afternoon strong good year for think little questions. I in appreciate

numbers, we're specifically, last Security to quarters. been good getting obviously, Just growth, maybe have up the get your two into phenomenal going on catch without some specifically bookings but and segment some

back without So that even do or assumption? revenue and side XXXX fiscal on in sort that to you fiscal think fair the we XXXX Mexico? can of a get levels ballpark Is

question, what QX good and said in Alan Again, last that what appreciate QX QX, especially every it QX, emphasize said, Well, this and what there'll time we us can we the you in comparable, Mexico do, think Without you year. to that word. growth. happened to Yes. what has want be

of cautious account, very, for the strong from We change travel we that we shipping Taking pandemic to else. are week, opportunity and impact basically acceptance, very pipeline, to think things backlog, we and that about strong have a the everything see being great continue week still and into growth.

these and a sound improvement, mentioned how with do XX%, margin, are for question have bit. the XX%, sticking close you between year think part view if on this? And maybe trends we at the move Okay. look, years, can not been or operating an again, perhaps I for basically think, I sustainable or full and see numbers? you Maybe exactly, But the obviously higher XX% around to you these in mix the the Security least some five segment quarter, not incremental XX% adjusted mixed but execution, Alan, XX% and just last operational we of – could basis, obviously little the and

at that'll change economies our all to that is in of of as but the operating XX% And believe level and a we terrific mix those particularly move we annual opportunity recurring quarter-to-quarter continued quarter. on basis. can revenues Security a focused from there expansion. Yes. only the an coupled perspective, expand with bit the little was QX some margins being our higher managing revenues, revenues goal where some cost from the revenues a on and the said, scale. do benefit Great Larry. business, to and with the to of in We forward, growth, But overall line structure product of on question, margin revenues. growth sustain, on quality top geographic in always show high more businesses, focus is bit a The of margin And not but

It's on we said. very that before add Deepak here, focused very revenues And product, important. on portion. what Alan are we This product is to said the as just is to mix much important recurring

and to continue should that the CertScan more important software that an more, portion margin. platform business and get tools and better look implemented at We doing is as have secondly other software is we are that the get and accepted and they of becoming our relatively

million in Okay. diverse April, the XX.XX I'm think I and opportunities you you Security. participating in. IDIQ were strong know I mistaken, of And awards mentioned already guys additional Is pipeline this pending you hopefully several of there's customs on be coming If of the still Deepak, – guys of XXX there's out this back will from why part Which top right. sort CBP, in the backlog not border of understanding protection. that correct? And

now good very to more activity. that it. is year-end, question. to-date good [indiscernible] lot And key Definitely up a Very true. there IDIQ going That's on government much you're the that be to becoming even

of DoD opportunities we very it. that for places the including and positioned other the well there positioned, are in are world. rest are We And other well

on a just more a to this Alan, strong $X I on obviously bit close take one may the cash I again think free there. If Okay. just year, share, really flow,

so the bit growth thoughts As little that the flow security any on slow working maybe bit or you to on down of XXXX, little does look more might a use we free might a return and create cash to capital that? side out

think a it's at side, to Larry, of are chain receivable I from increased an we're the XXXX, challenges and that Yes, facing. we're sort keeping would that on higher of side bit capital well the world support on management, little an supply in growth observation, inventory given some prudent a as anticipate as levels global working fiscal risk that astute with a the anticipating that and where inventory we companies level many of the

So on cash overall overall that would have flow. the some impact

you. we So with agree

Thanks appreciate great. a I guys. call the Congrats lot. Okay, again.

Thank you.

you. Thank

next line Our comes the from of Capital. Brian Imperial Ruttenbur question from

please. question, Your

and Great Great. A quarter year. of questions. couple

about I on maybe pullouts was you talk the Can that the some them, First have related of of Can forward to of you Afghanistan. DoD little you believe revenues your how the the from all, going that's work did were going personnel and status talk DoD, the impact you on about, a some going guys? doing. – bit to to ground you

of pick it Good answer main country. I'll subcontractors question, all of up yesterday, then the Brian. focus portion and to Again, they all places. and as couple are Alan people rest. are That news Good and been days. the on is safer last the first safely welcome. can sound for the airlifted And our had was our our and out of safe

Brian, And the to of question. second part your

years as So become decreasing over revenues previous our our a north of Afghanistan $XX million. been taking place. of In a fiscal the were the XXXX, had bit has revenues withdrawals year portion

embedded really maybe or in no As months fiscal but revenues, we at the a our fiscal first so, significant revenues any million XXXX, saw in for XXXX. Afghanistan is beyond not guidance we that of looked couple anticipating X.X in we're that

very Okay. much. Thank you

the turnkey us CertScan you anticipate terms Can on are some those recurring revenue. CertScan XXXX, where question Or levels range fiscal Next give kind in XXXX, programs? you in of talk two is what XXXX? and revenue you and for of about turnkey, from from

this take question. Brian, is Yes. I'll Alan. the

and we're a it looking good opportunity as we go a tremendous us for at So as forward. question

happy of revenue is an I healthcare, to for our could our business, as to revenues core we're company is but fiscal revenue It's revenue, recurring to Opto a and CertScan, excluding our security about we goal and what that at percentage fiscal generally not percentage of as revenues individual quite percentage. at continue While recurring prior Deepak say year. substantially the kind was recurring items And XX% nice moved increasing like as we increase potentially XXXX don't look on specific higher the are margins. our sources and provide which revenue as products, That's XXXX great with. manufacturing mentioned, only beyond, clearly of over we recurring a

So about very excited that.

So very good question.

Okay.

that Deepak. I I – let apologize, So just could break if down. me

were something. going to say on. Go You

maybe Well, I'm the about you, onto just next anticipating but from said you CertScan. question it, add to

all have We much can intelligence a of groups. on just some it, a businesses to data We've very from into expedite software, look our us, only more customers, And our to tracking and to in are CertScan. some the put at but very various been focused implemented learnt which into been readers, it. make at lot it that other compare able stuff and which it good image in by be only efficient turnkey the international the been analysis, built efficient also to license to experience it, for of the into look not it's to into, well artificial the received make that customers not has has U.S. the but manifest

we continue that, training invest the that including we So in believe to and step. long-term,

platform, that with can that what Not growth we but together, which be will integrated be products. it for agnostic our used be products, be just obviously think call way all a could in other it people’s a only opportunity. So we

Great.

those is in as recurring recall So on quick, and revenue, roughly nature, related. just to Healthcare Is maintenance understanding for ballpark real the two I XX% product that you is that recurring follow-up XX% Security lines? the said of

that. Yes, but there, higher that. maintenance probably But bit a be might a but than directionally little than bit the little higher yes,

over we year, Okay. I is quarter a question last was labor. Very on let there the in And people good. other level. SG&A on see increase more that or that’s bonuses SG&A assume of bringing then And just fourth at you it one me because didn’t turn that

in sales. of was a started. a for a additional when of growth reserve our combination the that some last to little bad there an some we first for in And anticipating more expenses just probably bit year, no we’re bit debts, things, on in in as higher did add support terms with accordance for QX Yes. the a of our travel fiscal higher incentive-based in for total strong order We essentially uptick the comp. formulas with Brian. XXXX. little algorithm compensation pandemic Yes, few the the saw people of year. We bad debts that was travel in bit of with had have sort There we or had the allowances It’s

Okay. Very seeing it follow-up be other to a just that Are labor. good. what then you environment? issues Are one inflationary on to looks an seeing with And question like any a you on pay to having industry people seeing maintaining the Are a your with in in. keep performers? issue of of lot flowing been facts more to you them? also lot top There’s a money with

Yes.

labor and a market. any seeing not So competitive material you’re right, But And Brian, OSI we’re we’re world the not that’s point. there labor at to individual there’s seeing some throughout time, are this anything shortages from material to basis. From situations. impact time a

you Thank much. very Great.

you. Thank

of from the line next Jefferies. comes Sheila Our question Kahyaoglu from

please. question, Your

on Ellen little wanted actually for is just a Security this at look more. to Sheila. first Hi, I

levels. pre-COVID close revenues to So

do given peers? So and versus rate dislocation share the in growth market your think you gains how about

Would you repeat well. that it very didn’t question? hear I

Sorry.

how Security, about given Leidos you as in So market, the do gains your to relative such think share SD&A? peers dislocations in growth in rate

want sorry. Hey, add. still – I didn’t do to you

This is Good take Thank it. question. yes, Ellen, Alan. I’ll you. So,

that extremely And our I are, has we’re we’re sales demonstrate that areas. believe is in competitors competitors all product and related our our showing, we are do done job. think think the strong, does relative portfolio our we to with diverse. team your growing our while it growth And question of to we we share product believe market various outstanding was an

various We continue product and geographies gains to have in share segments.

Okay.

I maybe color can some onto it. So put

cargo the And with we it breadth platform government compared was the then that, the and have say couldn’t especially both gives when also we space. we the business in in that a said it have we us are the side, in especially we about a the with well-positioned to leg believe on especially service domestically other to I in solution. echo And the air software proudly that ourselves U.S. question. customers also that competitors consider competitors. cargo cargo are a and in and been present it. international, go technology a can And also received. RTT we has recurring compared data and other product space, to very little giving Sorry our portfolio leader. market results CT of XXX, had up our we There the very lot the technology Definitely, we well area revenue platform, bit diverse scanner understand of our good momentum And that and our any that back very that space, has and our

Great. fiscal And just higher? in a And guidance little the line on revenue roughly you with profitability EPS guidance, think what pieces versus given consensus are do in XXXX? the Thanks. moving about how

Yes.

So through per the revenues where operational us earnings product that share think that were. than consensus projected a we we’ve the mix where allows to efficiencies higher seen, generate and the revenues maybe – the

excited three revenues, that grand into what be play between that does what the our comfortable divisions range. and mix always revenues of lines we’re with what product on will we’ve the share feel the The will So things we that. our per picture about within level really the at revenues provided of of guidance point those quite that mix the But earnings divisions. is this of

historically. to XX% it quarter last was the margins, on XX% just And the to the closer in detrimental, health XX% Great. versus like,

we are – about there? does And the pieces that there? think XXXX moving what do how So how

significantly in for was biggest we in invested the QX R&D. us Really, difference more much Yes.

more the So our product the R&D well on a it new we patient as in to platforms we’re as was the was prior investing to the year, on But that had Deepak a little both products. SG&A. on compared as expense monitoring alluding bit mostly cardiology R&D higher the on

So we an little healthcare invest going throughout for was XXXX in to think perhaps that fiscal a in maybe business. substantial quarter bit that, but the we’re for R&D to continue of resources the anomaly some

me. for it That’s Thanks. Great.

Thank you.

Jeff comes Roth Martin next Our of Capital question from the with line Partners.

Your question, please.

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

great. Thanks, Jeff. Doing

with though. challenges able fiscal months large and some the could give hoping you revenue to from relative in being had security first acceptance was terms nine I in I know recognize acceptance equipment us the of of agencies perspective. year

Just and term for curious throughout that near quarter progressed how what expectation your is acceptance. the

our what as when and to that ability into week, to have risk it, country at get the products the the quarantine happened on Jeff. question installation best got emphasize the to, there But way products. want it. customers right. the did a to customer but the So gates open get risk Yes, focused is inspection to get backlog, to sign or there. that’s not time team that off region, the inspection and nothing do desperate the challenging guarantee Rapiscan COVID terminology, which strong acceptance. site? much to to of that. comment. customer no mentioned, Alan But that word we has when with question, we are a to the also And customer onto the was test pushed and about week time, us such to the we to could that have they product ability our very The The the look general we job and has always up, about managing emphasize, to from as get their the the we come is we the to acceptance there or are that’s the still done and in country, can products. available or people it’s by building installation there I they great are I be gives since done their the thing again, That region want shippers? on are is there’s it, Good the

than that the month but better COVID there, this there’ll to always be look – is changes week. at it Delta XXXX, we they’re you like So it or to call risk week Lambda from it, month, XXXX, or whatever

helpful. That’s Great.

up In on government end budgets, the year. fiscal terms of of the we’re coming

about you For budgets similar fiscal the you XXXX feel into how year? federal level? are And a on to federal government, last expecting heading flash the do budget relative

are very about we confident it. Well,

September, There’ll activity. lot We be the between August mid-year late are more signals getting good and that end.

opening help – comes strongly be as and very year but government port of it up We and us preliminary the will cargo they’re the that crossings, that build this investment end. at a the with is especially we that positioned help long-term. with well big the economy us, about. which that stuff, air infrastructure and for is we talking infrastructure more are still the borders products, We to new the government well of the updating is in are believe positioned in of our an feel infrastructure and made various And and very we agencies believe what bill, the

question, positioned. you’re growth, then on one if segment, obviously more could, very well And the I Optoelectronics Great. rapid

driven Just us the was understand, how by new help logos? growth of curious if activity customer increased versus could you much

I both, question. very good think

growth it has automotive tremendous, positioned. can been over also, Alan sector. are mentioned we mostly demand from done in previous The And coming New calls operations, see specifically has in customers, we you the and very Asia as the our well too. automotive for fantastic, the is all have

to Aerospace names We the the products is of, also is and lots other Healthcare we’re area lots brand making. defense are on of growing. linked that’s of good growing.

well-positioned. some at it, prices looking all be been in to to freight but there’s the of to all, appreciative time, is some at in our also are are to able are they increases, the same very every there’s materials read pricing challenge you there’s places we’ve we we the And increase that problems, cost that it. So customers. day back going material coming where in The pandemic again, shortages,

has strong to not the quarter this that So we would it’s believe are dependent as want be and mentioned. something? margin level the about, a be a always uncertainty happen. strong going upon all, growth, but in at have all a year, would to still the mix The continue to at in we way, Alan, talking to continued going you add there’s maybe but Alan

year up last XX% fiscal side. enter XXXX, very opto earlier on strong year where ended strong backlog mentioned very we a the we record Yes, backlog had with But than more from for it’s as opto. a we

opto we’re So, the of excited about in the throughout opportunities course fiscal for continued XXXX. growth

that our we same competitors for cater time, over our would our in the U.S., portfolio a so very integration, in are Asia, can mentioned, that mention Jeff, aerospace, thing of manufacturing that call, my at whereas vertical UK in broad because other the better customers. position we well And and I’ve the we and as competitors, global product our to the defense, to our and compared and very have and I all is, everything. footprint than in have said place, electronics, needs the which I industries,

XXXX that we the distinct fiscal believe we comes in, business. feel good So, about as opto

missing Security, for Great. point would almost the had with And just narrowly the Thanks another on your time. of the revenue. I quarter record record quarterly just out, you rest

Thank you, Jeff.

you. Thank

Securities. Gulani comes Thank Riley you. question Aman from the next B. Instructions] from [Operator Our line

Your question, please.

year. Hey, quarter. if revenue maybe Deepak significant on in products your congrats another taking you think could for be provide solutions, color fiscal diagnostic more new the for ask of and – Thanks your question and you a do contributor my Alan. on solid of healthcare maybe current how I’d cardiology will cardiology some

question. Good

at everybody's great talking better the and telehealth we at relatively in business make did, relative on continue between margin a focused products patient into story, it’s and that stronger to We be to that about safe the is growth on of And and working and believe smaller are be much growth are portion monitoring care have of and sound the much the since the than the some will same lot the cardiology very side acquisition cardiology grow. cardiology. the but to connectivity cardiology and percentage going we we products time, home new and monitoring, a cardiology, Alan? a feel new technology was a that continue

and new we throughout not with about channel sales in fiscal the United Yes. onto but the we're excited And just cardiology products, very enhanced that, just really to States XXXX. add for fiscal XXXX

we in that so beyond fiscal So pay us. area and very should a for exciting XXXX dividends think nice

fourth And I by turnkey that expected Guatemala full that you mentioned in program – your you this very that That's happen full-scale helpful. turnkey to know at the to is quarter; juncture? ramp as did scale last program quarter,

Yes, it is.

the what it it's expectations. We’re and at doing happy very very, – with, our

Excellent.

Opto in strength called able given auto know question you like I that sort industry chain a some you know be seeing on is I'll I the particular headwinds, jump the last can there. provide auto supply replacement Then Okay. for what's auto, headwinds are you the out that in additional me, the any of driving strength back to the supply chain components that currently? queue. color

they but have automotive electric into traction the new And industry obviously products question, to have a before that and Mexico. at brands same like develop for automotive, the vehicle a very very, been I we've to continue the big mentioned that's this and both platform. brands manufacturing domestic European good it. both And for and and the good positive household continues been for good the time, products, demand be brands, Again got And in very, there. in we Asia

on pass call. I'll again, the Congratulations you. it Thank

Thank you.

does to further This the hand I'd program. today's remarks. Thank session of the management any for question-and-answer to back program conclude like you.

joining for our everyone thank I'm to want I Again, call. emphasize. wondering and

our We pleased end. are with year very, very happy and

in the with of growth, forward both the XXXX caution uncertainty and fiscal to in looking the pandemic. earnings a positive revenue We’re of

is of of customers, employees to it and to – very after our needs at time, very the looking the much, at forward look same it cater safety Our focused our of you the families talking primary much are we at quarter. onto to and goal the that. the to first Thank you

your and And conclude you. gentlemen Thank This you, program. conference. ladies in the today's thank for participation does

may disconnect. now You day. Good