Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Oct. 27, 2016
Document and Entity Information
Entity Registrant Name	OSI SYSTEMS INC
Entity Central Index Key	0001039065
Document Type	10-Q
Document Period End Date	Sep. 30, 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		19,064,008
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 122,966	$ 104,370
Accounts receivable, net	177,857	141,716
Inventories	289,601	273,288
Prepaid expenses and other current assets	45,757	35,944
Total current assets	636,181	555,318
Property and equipment, net	178,830	183,114
Goodwill	242,590	122,819
Intangible assets, net	129,349	56,283
Deferred income taxes	33,921	43,474
Other assets	32,142	30,715
Total assets	1,253,013	991,723
CURRENT LIABILITIES:
Bank lines of credit	339,000	125,000
Current portion of long-term debt	2,681	2,759
Accounts payable	66,129	69,490
Accrued payroll and related expenses	28,458	29,203
Advances from customers	61,016	55,408
Deferred revenue	36,468	29,978
Other accrued expenses and current liabilities	67,596	55,997
Total current liabilities	601,348	367,835
Long-term debt	5,623	6,054
Deferred income taxes	29,123	29,160
Other long-term liabilities	70,212	47,828
Total liabilities	706,306	450,877
Commitments and contingencies (Note 9)
Stockholders' Equity:
Preferred stock, $0.001 par value-authorized, 10,000,000 shares; no shares issued or outstanding
Common stock, $0.001 par value - authorized, 100,000,000 shares; issued and outstanding, 18,912,157 shares at June 30, 2016 and 18,924,189 shares at September 30, 2016	225,020	219,114
Retained earnings	339,665	338,988
Accumulated other comprehensive loss	(17,978)	(17,256)
Total stockholders' equity	546,707	540,846
Total liabilities and stockholders' equity	$ 1,253,013	$ 991,723

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Jun. 30, 2016
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	18,924,189	18,912,157
Common stock, shares outstanding	18,924,189	18,912,157

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Net revenues:
Products	$ 153,457	$ 135,501
Services	67,398	64,549
Total net revenues	220,855	200,050
Cost of goods sold:
Products	113,121	94,317
Services	39,647	37,762
Total cost of goods sold	152,768	132,079
Gross profit	68,087	67,971
Operating expenses:
Selling, general and administrative	43,553	40,393
Research and development	12,478	11,881
Impairment, restructuring and other charges	9,957
Total operating expenses	65,988	52,274
Income from operations	2,099	15,697
Interest and other expense, net	(1,158)	(794)
Income before income taxes	941	14,903
Provision for income taxes	264	4,098
Net income	$ 677	$ 10,805
Earnings per share:
Basic (in dollars per share)	$ 0.04	$ 0.55
Diluted (in dollars per share)	$ 0.03	$ 0.53
Shares used in per share calculation:
Basic (in shares)	18,943	19,734
Diluted (in shares)	19,591	20,474

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income	$ 677	$ 10,805
Other comprehensive income (loss):
Foreign currency translation adjustment	(801)	(1,628)
Other	79	(21)
Other comprehensive loss	(722)	(1,649)
Comprehensive income (loss)	$ (45)	$ 9,156

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 677	$ 10,805
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	15,426	14,063
Stock based compensation expense	5,830	4,465
Impairment charges	5,418
Other	258	(295)
Changes in operating assets and liabilities-net of business acquisitions:
Accounts receivable	(11,412)	13,467
Inventories	10,901	(23,575)
Accounts payable	(8,791)	23,933
Accrued payroll and related expenses	(5,251)	(3,448)
Advances from customers	(10,469)	(5,189)
Deferred revenue	(4,827)	(5,390)
Other	382	(4,024)
Net cash provided by (used in) operating activities	(1,858)	24,812
Cash flows from investing activities:
Acquisition of property and equipment	(2,806)	(2,503)
Acquisition of businesses, net of cash acquired	(186,861)	(782)
Acquisition of intangible and other assets	(1,881)	(958)
Net cash used in investing activities	(191,548)	(4,243)
Cash flows from financing activities:
Net borrowings on bank lines of credit	214,000	45,000
Proceeds from long-term debt	233	34
Payments on long-term debt	(707)	(690)
Proceeds from exercise of stock options and employee stock purchase plan	2,099	3,067
Repurchase of common shares	(2,712)	(21,471)
Taxes paid related to net share settlement of equity awards	(290)	(13,049)
Net cash provided by financing activities	212,623	12,891
Effect of exchange rate changes on cash	(621)	(123)
Net increase in cash and cash equivalents	18,596	33,337
Cash and cash equivalents-beginning of period	104,370	47,593
Cash and cash equivalents-end of period	122,966	80,930
Supplemental disclosure of cash flow information:
Interest	956	305
Income taxes	$ 6,022	$ 5,221

Basis of Presentation

3 Months Ended

Sep. 30, 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 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 and ventilation systems and defibrillators, 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 manufacturer (“OEM”) customers and end users 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 globally. 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 can 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 and defibrillator products and related supplies and accessories globally. These products are used by care providers in critical care, emergency and perioperative areas in 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 OEM customers 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 applicable to interim unaudited financial statements. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for audited 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, 2016. The results of operations for the three months ended September 30, 2016 are not necessarily indicative of the operating results to be expected for the full 2017 fiscal year or any future periods.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for the Company relate to contract revenue, profit and loss recognition, fair values of assets acquired and liabilities assumed in business combinations, market values for inventories reported at lower of cost or market, stock-based compensation expense, income taxes, accrued product warranty costs, and the 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 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 shares and dilutive potential common shares outstanding during the period. Potential common shares consist of the shares issuable upon the exercise of stock options and restricted stock or unit awards under the treasury stock method. Stock options and stock awards to purchase 0.1 million shares of common stock for each of the three months ended September 30, 2015 and September 30, 2016 were excluded from the calculation because to include such options and awards would have been antidilutive.

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

	Three Months Ended September 30,
	2015		2016
Net income available to common stockholders	$	10,805	$	677

Weighted average shares outstanding—basic	19,734		18,943
Dilutive effect of equity awards	740		648

Weighted average shares outstanding—diluted	20,474		19,591

Basic earnings per share	$	0.55	$	0.04

Diluted earnings per share	$	0.53	$	0.03

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 upon sale of an asset or paid upon 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 9 to the condensed consolidated financial statements, the Company’s contingent payment obligations related to acquisitions are valued using “Level 3” valuation techniques. Such obligations are measured at fair value on a recurring basis.

The fair values of the Company’s financial assets and liabilities as of June 30, 2016 and September 30, 2016 are categorized as follows (in thousands):

	June 30, 2016										September 30, 2016
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Equity securities	$	354	$	—		$	—	$	354		$	384	$	—		$	—	$	384
Insurance company contracts	—		21,353			—		21,353			—		22,443			—		22,443
Interest rate contract	—		(31		)	—		(31		)	—		(13		)	—		(13		)

Total assets	$	354	$	21,322		$	—	$	21,676		$	384	$	22,430		$	—	$	22,814

Liabilities—Contingent payment obligations	$	—	$	—		$	17,117	$	17,117		$	—	$	—		$	17,117	$	17,117

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 the Company’s variable, LIBOR-based term loan. The interest rate swap matures in October 2019, which aligns with the maturity of the term loan. The interest rate swap is considered an effective cash flow hedge, and, as a result, the net gains or losses from the periodic fair market revaluation of such instrument were reported as a component of Other comprehensive income (loss) in the condensed consolidated financial statements and are reclassified to interest expense 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 generally 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. Certain fixed assets related to the Company’s turnkey security screening program in Mexico are not currently in use. As of September 30, 2016, the net value of these assets is approximately $15 million, which amount 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 a sale attributable to installation is deferred and recognized when the installation service is provided completed. In an instance where terms of sale include subjective customer acceptance criteria, revenue is deferred until the Company has achieved the acceptance criteria, unless customer acceptance terms are perfunctory or inconsequential. Concurrent with the revenue recognition, the Company accrues reserves for estimated product return and warranty costs. 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 recognition. 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 constitute 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 the SAT 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.

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 current liabilities or long-term liabilities depending on when the Company estimates the corresponding amortization to occur.

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 for 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 such fiscal years. Earlier adoption is permitted only for fiscal years beginning after December 15, 2016, including interim reporting periods within such fiscal years. In May 2016, FASB issued a narrow scope improvement, specifically to clarify two aspects - identifying performance obligations and licensing implementation guidance, to this ASU. The Company has not yet selected a transition method and is currently evaluating the impact this ASU may have on its 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 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 such fiscal year. 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 ASU 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 such fiscal years. Early adoption 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 March 2016, the FASB issued an ASU relating to employee share-based payment accounting. This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including 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 such fiscal years. 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 August 2016, the FASB issued an ASU to address the diverse classifications being applied to cash receipts and payments in the cash flow statement. This ASU addresses eight specific cash flow issues to reduce diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within such fiscal years. 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.

Business Combinations

3 Months Ended

Sep. 30, 2016

Business Combinations

Business Combinations

2. Business Combinations

Under ASU 805, the acquisition method of accounting requires the Company to record assets acquired and liabilities assumed from an acquisition at their estimated fair values at the date of acquisition. Any excess of the total estimated purchase price of over the estimated fair value of the net assets acquired should be recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, trade names, useful lives and discount rates. Management’s estimates of fair value are based 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.

On September 9, 2016, the Company acquired by merger 100 percent ownership interest of American Science and Engineering, Inc. (“AS&E”), a leading provider of detection solutions for advanced cargo, parcel, and personnel inspection. AS&E’s operations are included in the Company’s Security division. The Company financed the total estimated purchase price of $266 million with a combination of cash on hand and borrowing under its existing revolving bank line of credit, as well as the issuance of Company restricted stock units (“RSUs”) to replace RSUs previously issued by AS&E. The Company has estimated that $1.4 million of the fair value of these replacement Company RSU awards pertain to the precombination service period, and therefore, this amount has been included in the total estimated purchase price. Immediately following the close of the acquisition, the Company used $69 million of AS&E’s existing cash on hand to pay down the revolving bank line of credit.

The Company is in the process of finalizing its valuation of all the assets acquired and liabilities assumed. As the amounts recorded for certain assets and liabilities are preliminary in nature, they are subject to adjustment as additional information is obtained about the facts and circumstances that existed at the acquisition date. The final determination of fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date as permitted under GAAP. The AS&E acquisition could necessitate the use of the full one year measurement period to adequately analyze and assess a number of factors used in establishing the asset and liability fair values as of the acquisition date, including receivables, inventory, deferred revenue, property and equipment, contractual obligations, income tax obligations, and certain reserves. Any potential adjustments made could be material in relation to these preliminary values.

The following is a preliminary estimate of the assets acquired and the liabilities assumed by OSI Systems in the acquisition, reconciled to total estimated purchase consideration (in thousands):

Cash and cash equivalents	$	79,195
Accounts receivable	25,048
Inventories	30,439
Other current assets	7,368
Property and equipment	5,834
Intangible assets	74,800
Other long-term assets	201
Accounts payable	(5,273		)
Accrued payroll and related expenses	(4,629		)
Deferred revenues — current	(11,281		)
Advances from customers	(13,785		)
Other accrued expenses and current liabilities	(6,426		)
Deferred revenues - long term	(3,225		)
Deferred income tax liability	(9,455		)
Other long-term liabilities	(18,966		)

Net assets acquired	149,845
Goodwill	116,158

Total consideration	$	266,003

The goodwill is largely attributable to expected synergies between the Company and AS&E and the assembled workforce of AS&E.

Intangible assets are recorded at estimated fair value, as determined by management based on available information, which includes a preliminary valuation prepared by an independent third party. The fair value attributed to the intangible assets acquired was based on preliminary estimates, assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques. The value attributed to goodwill and intangible assets is not deductible for income tax purposes. The following table summarizes the fair value of acquired identifiable intangible assets as of the acquisition date (amounts in thousands):

	Weighted	Gross
	Average	Carrying
	Lives	Value
Amortizable assets:
Developed technology	10 years	$	31,750
Customer relationships/backlog	7 years	27,550

Total amortizable assets		59,300
Non-amortizable assets:
Trademarks and trade names		12,300
IPR&D		3,200

Total intangible assets		$	74,800

The condensed consolidated statements of operations include $14.2 million of revenue and $2.8 million of pre-tax income from AS&E for the period from September 10, 2016 to September 30, 2016.

The following pro forma results are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. The following unaudited pro forma results of operations assume the AS&E acquisition had occurred on July 1, 2015 (in thousands):

	Three Months Ended September 30,
	2015		2016
Revenues	$	224,717	$	238,611

Income (loss) before taxes	$	4,705	$	(27,388	)

Significant pro forma adjustments incorporated into the pro forma results above include the recognition of additional amortization expense related to acquired intangible assets and additional interest expense related to debt incurred to finance the acquisition. In addition, significant non-recurring adjustments include the elimination of non-recurring acquisition-related expenses incurred during the three months ended September 30, 2016.

Other Acquisitions

The Company also completed an acquisition that was determined to be immaterial by management during the three months ended September 30, 2016.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1490-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1524-128463

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
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+ Details

Balance Sheet Details

3 Months Ended

Sep. 30, 2016

Balance Sheet Details

Balance Sheet Details

3. Balance Sheet Details

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

	June 30,			September 30,
	2016			2016
Accounts receivable	$	148,767		$	185,448
Less allowance for doubtful accounts	(7,051		)	(7,591		)

Total	$	141,716		$	177,857

	June 30,		September 30,
	2016		2016
Raw materials	$	133,540	$	140,550
Work-in-process	47,460		63,713
Finished goods	92,288		85,338

Total	$	273,288	$	289,601

	Estimated
	Useful	June 30,			September 30,
	Lives	2016			2016
Land	N/A	$	14,498		$	14,498
Buildings, civil works and improvements	20 - 40 years	170,232			170,766
Leasehold improvements	1 - 12 years	9,015			9,635
Equipment and tooling	3 - 10 years	154,309			159,512
Furniture and fixtures	3 - 13 years	3,314			3,340
Computer equipment	3 - 5 years	17,902			18,562
Computer software	3 - 10 years	17,769			19,113
Construction in process	N/A	4,978			4,349

Total		392,017			399,775
Less accumulated depreciation and amortization		(208,903		)	(220,945		)

Property and equipment, net		$	183,114		$	178,830

Depreciation expense was $13.0 million and $13.3 million for the three months ended September 30, 2015 and 2016, respectively.

Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets

Goodwill and Intangible Assets

4. Goodwill and Intangible Assets

The changes in the carrying value of goodwill for the three month period ended September 30, 2016 are as follows (in thousands):

					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division			Consolidated
Balance as of June 30, 2016	$	32,922	$	42,574	$	47,323		$	122,819
Goodwill acquired or adjusted during the period	120,004		—		—			120,004
Foreign currency translation adjustment	112		10		(355		)	(233		)

Balance as of September 30, 2016	$	153,038	$	42,584	$	46,968		$	242,590

Intangible assets consisted of the following (in thousands):

		June 30, 2016						September 30, 2016
	Weighted	Gross						Gross
	Average	Carrying		Accumulated		Intangibles		Carrying		Accumulated		Intangibles
	Lives	Value		Amortization		Net		Value		Amortization		Net
Amortizable assets:
Software development costs	9 years	$	22,091	$	4,120	$	17,971	$	26,935	$	5,627	$	21,308
Patents	20 years	8,111		1,760		6,351		7,916		1,362		6,554
Developed technology	10 years	12,901		3,969		8,932		39,526		3,398		36,128
Customer relationships/backlog	7 years	14,223		4,862		9,361		40,226		4,317		35,909

Total amortizable assets		57,326		14,711		42,615		114,603		14,704		99,899
Non-amortizable assets:
Trademarks and trade names		13,668		—		13,668		26,250		—		26,250
IPR&D		—		—		—		3,200		—		3,200

Total intangible assets		$	70,994	$	14,711	$	56,283	$	144,053	$	14,704	$	129,349

Amortization expense related to intangible assets was $1.1 million and $2.1 million for the three months ended September 30, 2015 and 2016, respectively. At September 30, 2016, the estimated future amortization expense was as follows (in thousands):

2017 (remaining 9 months)	$	10,627
2018	14,917
2019	14,759
2020	13,048
2021	10,810
2022	8,366
2023 and thereafter, including assets that have not yet begun to be amortized	27,372

Total	$	99,899

Software development costs for software products incurred before establishing technological feasibility are charged to operations. Software development costs incurred after establishing technological feasibility are capitalized on a product by product basis until the product is available for general release to customers at which time amortization begins. Annual amortization, charged to cost of goods sold, is the amount computed using the ratio that current revenues for a product bear to the total current and anticipated future revenues for that product. In the event that future revenues are not estimable, such costs are amortized on a straight line basis over the remaining estimated economic life of the product. Amortizable assets that have not yet begun to be amortized are included in thereafter in the table above. For the three months ended September 30, 2015 and 2016, the Company capitalized software development costs in the amount of $0.4 million and $1.4 million, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Impairment, Restructuring and Other Charges

3 Months Ended

Sep. 30, 2016

Impairment, Restructuring and Other Charges

Impairment, Restructuring and Other Charges

5. Impairment, Restructuring and Other Charges

During the three months ended September 30, 2016, the Company determined that certain assets will not be used and were permanently impaired. In addition, the Company accounts for certain charges related to restructuring activities, litigation, acquisition-related costs and other non-routine 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 September 30,
	2015		2016
Impairment of assets	$	—	$	5,418

Restructuring and other charges:
Acquisition-related costs	—		3,874
Facility closure / consolidation	—		176
Employee termination	—		471
Other	—		18

Total impairment, restructuring and other charges	$	—	$	9,957

Borrowings

3 Months Ended

Sep. 30, 2016

Borrowings

Borrowings

6. Borrowings

The Company has a $450 million revolving credit facility maturing in 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 up to $200 million under certain circumstances. Borrowings under this facility bear interest at LIBOR plus a margin of 1.25% as of September 30, 2016, but this margin can range from 1.25% to 2.0% based on the Company’s consolidated leverage ratio. 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 September 30, 2016, but this fee can range from 0.20% to 0.35% based on the Company’s consolidated leverage ratio. Due to increased borrowings under this facility as a result of the acquisition of AS&E, the borrowing margin and the commitment fee are scheduled to increase to 1.75% and 0.30%, respectively, during the second quarter of fiscal 2017. 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 September 30, 2016, there was $339.0 million outstanding under the revolving credit facility and $33.2 million outstanding under the letters-of-credit sub-facility. As of September 30, 2016, the Company believes that it is in compliance with all related covenants under this credit 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 September 30, 2016, $38.5 million was outstanding under these letter-of-credit facilities, while no debt was outstanding. As of September 30, 2016, the total amount available under these credit facilities was $16.6 million, with a total cash borrowing sub-limit of $1.3 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, 2016			September 30, 2016
Term loans	$	6,847		$	6,370
Other long-term debt	1,966			1,934

	8,813			8,304
Less current portion of long-term debt	(2,759		)	(2,681		)

Long-term portion of debt	$	6,054		$	5,623

Stockholders' Equity

3 Months Ended

Sep. 30, 2016

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

Stock-based Compensation

As of September 30, 2016, the Company maintained two share-based employee compensation plans: the 2012 Incentive Award Plan (“2012 Plan”) and the Amended and Restated 2006 Equity Participation Plan (“2006 Plan”). Upon stockholder approval of the 2012 Plan, the Company ceased to make grants under the 2006 Plan. In addition, pursuant to the acquisition of AS&E, the Company assumed two share-based employee compensation plans: the AS&E 2005 Equity and Incentive Plan (“2005 AS&E Plan”) and the AS&E 2014 Equity and Incentive Plan (“2014 AS&E Plan”). No new RSU grants will be made under the 2005 AS&E Plan and the 2014 AS&E Plan. The 2012 Plan, 2006 Plan, 2005 AS&E Plan and the 2014 AS&E Plan are collectively referred to as the “OSI Plans”.

The Company recorded stock-based compensation expense in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended September 30,
	2015			2016
Cost of goods sold	$	292		$	295
Selling, general and administrative	4,108			5,060
Research and development	65			55

Stock based compensation expense	4,465			5,410
Less: Related income tax benefit	(1,699		)	(2,142		)

Stock based compensation expense, net	$	2,766		$	3,268

As of September 30, 2016, total unrecognized compensation cost related to share-based compensation grants were estimated at $0.6 million for stock options and $29.9 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 three months ended September 30, 2016:

			Weighted Average		Weighted-Average	Aggregate
	Number of		Exercise		Remaining Contractual	Intrinsic Value
	Options		Price		Term	(in thousands)
Outstanding at June 30, 2016	934,112		$	28.67
Granted	328		$	61.17
Exercised	(4,136	)	$	46.97
Expired or forfeited	(2,287	)	$	71.42

Outstanding at September 30, 2016	928,017		$	28.50	3.7 years	$	34,600

Exercisable at September 30, 2016	893,538		$	26.85	3.5 years	$	34,580

The following summarizes restricted stock and RSU award activity during the three months ended September 30, 2016:

			Weighted-
			Average
	Shares		Fair Value
Nonvested at June 30, 2016	530,498		$	67.94
Granted	187,815		$	61.26
Vested	(24,646	)	$	68.71
Replacement RSUs(1)	65,954		$	67.76
Forfeited	(3,362	)	$	70.21

Nonvested at September 30, 2016	756,259		$	66.23

Note 1 – Pursuant to the acquisition of AS&E, the Company assumed unvested RSUs originally granted by AS&E and converted them into RSUs for the Company’s common stock.

As of September 30, 2016, there were approximately 1.7 million shares available for grant under the 2012 Plan. Under the terms of the 2012 Plan, RSUs and restricted stock granted from the pool of shares available for grant reduce the pool by 1.87 shares for each award granted. RSUs and restricted stock forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited.

The Company granted 139,300 and 155,488 performance-based RSUs during the three months ended September 30, 2015 and 2016, respectively. These performance-based RSUs are contingent on the achievement of certain performance metrics. The payout can range from zero to 250% of the original number of shares or units awarded.

Share Repurchase Program

In March 1999, the Board of Directors authorized a stock repurchase program of up to 2 million shares. In each of September 2004 and April 2013, the Board of Directors authorized an additional 1 million shares for repurchase pursuant to this program, and in October 2015, the Board of Directors authorized an additional 500,000 shares for repurchase pursuant to this program. In April 2016, the Board of Directors authorized a new stock repurchase program of up to one million shares. As of September 30, 2016, there were 1,020,763 of available shares that may be repurchased under these programs. These programs do not have expiration dates. Upon repurchase, the shares are restored to the status of authorized but unissued, and the Company records them as a reduction in the number of shares of common stock issued and outstanding in the consolidated financial statements.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 4
-Subparagraph (SAB Topic 4.E)
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.5-02(29))
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-SubTopic 10
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Retirement Benefit Plans

3 Months Ended

Sep. 30, 2016

Retirement Benefit Plans

Retirement Benefit Plans

8. 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 September 30,
	2015		2016
Service cost	$	204	$	224
Interest cost	9		7
Amortization of prior service cost	105		70

Net periodic pension expense	$	318	$	301

For the three months ended September 30, 2015 and 2016, the Company made no contributions to these defined benefit plans.

In addition, the Company maintains various defined contribution plans. For the three months ended September 30, 2015 and 2016, the Company made contributions of $1.1 and $1.2 million, respectively, to these defined contribution plans.

Commitments and Contingencies

3 Months Ended

Sep. 30, 2016

Commitments and Contingencies

Commitments and Contingencies

9. 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 by the acquired operations of certain sales or profitability milestones. The maximum amount of such future payments under arrangements with contingent consideration caps is $33.2 million as of September 30, 2016. In addition, one of the purchase agreements the Company entered into requires royalty payments 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. For acquisitions after fiscal 2009, the estimated fair value of these obligations is recorded as a liability at the time of the acquisition with subsequent revisions recorded in Selling, general and administrative expense in the condensed consolidated financial statements. As of June 30, 2016 and September 30, 2016, $17.1 million of contingent payment obligations are included in Other accrued expenses and current liabilities and Other long-term liabilities in the accompanying condensed consolidated balance sheets.

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 at various locations throughout the country. Associated with the agreement, the Company was provided an advance totaling $100 million. The Company is obligated to provide a guarantee until the advance has been amortized. As of June 30, 2016 and September 30, 2016, $25.0 million and $18.8 million, respectively, of this advance remains outstanding and is included in Advances from customers.

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 condition, 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 September 30, 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):

	Three Months Ended September 30,
	2015			2016
Balance at beginning of period	$	12,738		$	15,948
Additions and adjustments	3,607			2,822
Reductions for warranty repair costs	(3,033		)	(1,474		)

Balance at end of period	$	13,312		$	17,296

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. Following mediation and post-mediation settlement discussions, the parties to the Derivative Actions reached a settlement and have signed a settlement term sheet, which, if approved, would provide for the resolution of all pending claims in both the California and Delaware actions. The settlement reached includes reimbursement of attorneys’ fees, which is expected to be covered by insurance. The Company and the other defendants agreed to the settlement term sheet to avoid further expense, inconvenience, and the distraction and inherent risks of burdensome and protracted litigation. Neither the Company nor the individual defendants conceded any wrongdoing or liability, and continue to believe that they have meritorious defenses to all claims alleged in the Derivative Actions. The settlement is subject to approval by the Court and certain other conditions.

The Company’s recently acquired subsidiary, AS&E, has been the subject of an investigation by the Office of the Inspector General of the U.S. General Services Administration (“GSA”). The investigation relates to AS&E’s discount practices and compliance with the pricing provisions of AS&E’s GSA Schedule contract. The investigation could lead to claims or findings of violations of the False Claims Act in connection with AS&E’s GSA contracting activity. Violations of the False Claims Act could result in the imposition of damages, including up to treble damages, plus civil penalties in some cases, and the Company expects to incur legal costs in connection with the investigation. The Company and AS&E continue to cooperate fully with the investigation and management believes that an appropriate accrual for this uncertainty has been provided in the accompanying condensed consolidated 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 these various other claims 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	3 Months Ended
Income Taxes	Sep. 30, 2016
Income Taxes
Income Taxes	10. 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

3 Months Ended

Sep. 30, 2016

Segment Information

Segment Information

11. 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-product businesses whereas the businesses of the Optoelectronics and Manufacturing division primarily supply components and subsystems to OEM customers, 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, 2016.

The following tables present the operations and identifiable assets by industry segment (in thousands):

	Three Months Ended September 30,
	2015			2016
Revenues (1) — by Segment:
Security division	$	96,410		$	123,709
Healthcare division	51,465			45,650
Optoelectronics and Manufacturing division, including intersegment revenues	62,548			56,954
Intersegment revenues elimination	(10,373		)	(5,458		)

Total	$	200,050		$	220,855

	Three Months Ended September 30,
	2015			2016
Operating income (loss) — by Segment:
Security division	$	12,635		$	9,350
Healthcare division	2,938			(3,264		)
Optoelectronics and Manufacturing division	5,561			4,650
Corporate	(5,202		)	(9,013		)
Eliminations (2)	(235		)	376

Total	$	15,697		$	2,099

	June 30,			September 30,
	2016			2016
Assets (1) — by Segment:
Security division	$	519,068		$	821,192
Healthcare division	200,067			191,754
Optoelectronics and Manufacturing division	211,337			204,450
Corporate	64,970			38,960
Eliminations (2)	(3,719		)	(3,343		)

Total	$	991,723		$	1,253,013

(1)

For the three months ended September 30, 2015 and 2016, one customer, Servicio de Administración Tributaria in Mexico, accounted for 15% and 13% of total net revenues, respectively. No customer accounted for greater than 10% of accounts receivable as of June 30, 2016 and September 30, 2016.

(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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Basis of Presentation (Policies)

3 Months Ended

Sep. 30, 2016

Basis of Presentation

Description of Business

Basis of Presentation

Use of Estimates

Per Share Computations

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

	Three Months Ended September 30,
	2015		2016
Net income available to common stockholders	$	10,805	$	677

Weighted average shares outstanding—basic	19,734		18,943
Dilutive effect of equity awards	740		648

Weighted average shares outstanding—diluted	20,474		19,591

Basic earnings per share	$	0.55	$	0.04

Diluted earnings per share	$	0.53	$	0.03

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 fair values of the Company’s financial assets and liabilities as of June 30, 2016 and September 30, 2016 are categorized as follows (in thousands):

	June 30, 2016										September 30, 2016
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Equity securities	$	354	$	—		$	—	$	354		$	384	$	—		$	—	$	384
Insurance company contracts	—		21,353			—		21,353			—		22,443			—		22,443
Interest rate contract	—		(31		)	—		(31		)	—		(13		)	—		(13		)

Total assets	$	354	$	21,322		$	—	$	21,676		$	384	$	22,430		$	—	$	22,814

Liabilities—Contingent payment obligations	$	—	$	—		$	17,117	$	17,117		$	—	$	—		$	17,117	$	17,117

Derivative Instruments and Hedging Activity

Property and Equipment

Revenue Recognition

Recent Accounting Updates Not Yet Adopted

Basis of Presentation (Tables)

3 Months Ended

Sep. 30, 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 September 30,
	2015		2016
Net income available to common stockholders	$	10,805	$	677

Weighted average shares outstanding—basic	19,734		18,943
Dilutive effect of equity awards	740		648

Weighted average shares outstanding—diluted	20,474		19,591

Basic earnings per share	$	0.55	$	0.04

Diluted earnings per share	$	0.53	$	0.03

Summary of fair values of financial assets and liabilities

The fair values of the Company’s financial assets and liabilities as of June 30, 2016 and September 30, 2016 are categorized as follows (in thousands):

	June 30, 2016										September 30, 2016
	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Assets:
Equity securities	$	354	$	—		$	—	$	354		$	384	$	—		$	—	$	384
Insurance company contracts	—		21,353			—		21,353			—		22,443			—		22,443
Interest rate contract	—		(31		)	—		(31		)	—		(13		)	—		(13		)

Total assets	$	354	$	21,322		$	—	$	21,676		$	384	$	22,430		$	—	$	22,814

Liabilities—Contingent payment obligations	$	—	$	—		$	17,117	$	17,117		$	—	$	—		$	17,117	$	17,117

Business Combinations (Tables)

3 Months Ended

Sep. 30, 2016

Business Combinations

Schedule of assets acquired and liabilities assumed

The following is a preliminary estimate of the assets acquired and the liabilities assumed by OSI Systems in the acquisition, reconciled to total estimated purchase consideration (in thousands):

Cash and cash equivalents	$	79,195
Accounts receivable	25,048
Inventories	30,439
Other current assets	7,368
Property and equipment	5,834
Intangible assets	74,800
Other long-term assets	201
Accounts payable	(5,273		)
Accrued payroll and related expenses	(4,629		)
Deferred revenues — current	(11,281		)
Advances from customers	(13,785		)
Other accrued expenses and current liabilities	(6,426		)
Deferred revenues - long term	(3,225		)
Deferred income tax liability	(9,455		)
Other long-term liabilities	(18,966		)

Net assets acquired	149,845
Goodwill	116,158

Total consideration	$	266,003

Summary of the fair value of acquired identifiable intangible assets as of the acquisition date

The following table summarizes the fair value of acquired identifiable intangible assets as of the acquisition date (amounts in thousands):

	Weighted	Gross
	Average	Carrying
	Lives	Value
Amortizable assets:
Developed technology	10 years	$	31,750
Customer relationships/backlog	7 years	27,550

Total amortizable assets		59,300
Non-amortizable assets:
Trademarks and trade names		12,300
IPR&D		3,200

Total intangible assets		$	74,800

Pro forma results of operations assuming the AS&E acquisition had occurred on July 1, 2015

The following unaudited pro forma results of operations assume the AS&E acquisition had occurred on July 1, 2015 (in thousands):

	Three Months Ended September 30,
	2015		2016
Revenues	$	224,717	$	238,611

Income (loss) before taxes	$	4,705	$	(27,388	)

Balance Sheet Details (Tables)

3 Months Ended

Sep. 30, 2016

Balance Sheet Details

Schedule of selected balance sheet accounts

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

	June 30,			September 30,
	2016			2016
Accounts receivable	$	148,767		$	185,448
Less allowance for doubtful accounts	(7,051		)	(7,591		)

Total	$	141,716		$	177,857

	June 30,		September 30,
	2016		2016
Raw materials	$	133,540	$	140,550
Work-in-process	47,460		63,713
Finished goods	92,288		85,338

Total	$	273,288	$	289,601

	Estimated
	Useful	June 30,			September 30,
	Lives	2016			2016
Land	N/A	$	14,498		$	14,498
Buildings, civil works and improvements	20 - 40 years	170,232			170,766
Leasehold improvements	1 - 12 years	9,015			9,635
Equipment and tooling	3 - 10 years	154,309			159,512
Furniture and fixtures	3 - 13 years	3,314			3,340
Computer equipment	3 - 5 years	17,902			18,562
Computer software	3 - 10 years	17,769			19,113
Construction in process	N/A	4,978			4,349

Total		392,017			399,775
Less accumulated depreciation and amortization		(208,903		)	(220,945		)

Property and equipment, net		$	183,114		$	178,830

Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets

Schedule of carrying amount of goodwill

The changes in the carrying value of goodwill for the three month period ended September 30, 2016 are as follows (in thousands):

					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division			Consolidated
Balance as of June 30, 2016	$	32,922	$	42,574	$	47,323		$	122,819
Goodwill acquired or adjusted during the period	120,004		—		—			120,004
Foreign currency translation adjustment	112		10		(355		)	(233		)

Balance as of September 30, 2016	$	153,038	$	42,584	$	46,968		$	242,590

Schedule of intangible assets

Intangible assets consisted of the following (in thousands):

		June 30, 2016						September 30, 2016
	Weighted	Gross						Gross
	Average	Carrying		Accumulated		Intangibles		Carrying		Accumulated		Intangibles
	Lives	Value		Amortization		Net		Value		Amortization		Net
Amortizable assets:
Software development costs	9 years	$	22,091	$	4,120	$	17,971	$	26,935	$	5,627	$	21,308
Patents	20 years	8,111		1,760		6,351		7,916		1,362		6,554
Developed technology	10 years	12,901		3,969		8,932		39,526		3,398		36,128
Customer relationships/backlog	7 years	14,223		4,862		9,361		40,226		4,317		35,909

Total amortizable assets		57,326		14,711		42,615		114,603		14,704		99,899
Non-amortizable assets:
Trademarks and trade names		13,668		—		13,668		26,250		—		26,250
IPR&D		—		—		—		3,200		—		3,200

Total intangible assets		$	70,994	$	14,711	$	56,283	$	144,053	$	14,704	$	129,349

Schedule of estimated future amortization expense

At September 30, 2016, the estimated future amortization expense was as follows (in thousands):

2017 (remaining 9 months)	$	10,627
2018	14,917
2019	14,759
2020	13,048
2021	10,810
2022	8,366
2023 and thereafter, including assets that have not yet begun to be amortized	27,372

Total	$	99,899

Impairment, Restructuring and Other Charges (Tables)

3 Months Ended

Sep. 30, 2016

Impairment, Restructuring and Other Charges

Summary of the impairment, restructuring and other charges

The following table summarizes the impairment, restructuring and other charges (in thousands):

	Three Months Ended September 30,
	2015		2016
Impairment of assets	$	—	$	5,418

Restructuring and other charges:
Acquisition-related costs	—		3,874
Facility closure / consolidation	—		176
Employee termination	—		471
Other	—		18

Total impairment, restructuring and other charges	$	—	$	9,957

Borrowings (Tables)

3 Months Ended

Sep. 30, 2016

Borrowings

Schedule of long-term debt

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

	June 30, 2016			September 30, 2016
Term loans	$	6,847		$	6,370
Other long-term debt	1,966			1,934

	8,813			8,304
Less current portion of long-term debt	(2,759		)	(2,681		)

Long-term portion of debt	$	6,054		$	5,623

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Stockholders' Equity (Tables)

3 Months Ended

Sep. 30, 2016

Stockholders' Equity

Schedule of stock-based compensation expense recorded in the 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 September 30,
	2015			2016
Cost of goods sold	$	292		$	295
Selling, general and administrative	4,108			5,060
Research and development	65			55

Stock based compensation expense	4,465			5,410
Less: Related income tax benefit	(1,699		)	(2,142		)

Stock based compensation expense, net	$	2,766		$	3,268

Summary of stock option activity

			Weighted Average		Weighted-Average	Aggregate
	Number of		Exercise		Remaining Contractual	Intrinsic Value
	Options		Price		Term	(in thousands)
Outstanding at June 30, 2016	934,112		$	28.67
Granted	328		$	61.17
Exercised	(4,136	)	$	46.97
Expired or forfeited	(2,287	)	$	71.42

Outstanding at September 30, 2016	928,017		$	28.50	3.7 years	$	34,600

Exercisable at September 30, 2016	893,538		$	26.85	3.5 years	$	34,580

Summary of restricted stock award and RSU award activity

			Weighted-
			Average
	Shares		Fair Value
Nonvested at June 30, 2016	530,498		$	67.94
Granted	187,815		$	61.26
Vested	(24,646	)	$	68.71
Replacement RSUs(1)	65,954		$	67.76
Forfeited	(3,362	)	$	70.21

Nonvested at September 30, 2016	756,259		$	66.23

Note 1 – Pursuant to the acquisition of AS&E, the Company assumed unvested RSUs originally granted by AS&E and converted them into RSUs for the Company’s common stock.

Retirement Benefit Plans (Tables)

3 Months Ended

Sep. 30, 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 September 30,
	2015		2016
Service cost	$	204	$	224
Interest cost	9		7
Amortization of prior service cost	105		70

Net periodic pension expense	$	318	$	301

Commitments and Contingencies (Tables)

3 Months Ended

Sep. 30, 2016

Commitments and Contingencies

Schedule of changes in warranty provisions

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

	Three Months Ended September 30,
	2015			2016
Balance at beginning of period	$	12,738		$	15,948
Additions and adjustments	3,607			2,822
Reductions for warranty repair costs	(3,033		)	(1,474		)

Balance at end of period	$	13,312		$	17,296

Segment Information (Tables)

3 Months Ended

Sep. 30, 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 September 30,
	2015			2016
Revenues (1) — by Segment:
Security division	$	96,410		$	123,709
Healthcare division	51,465			45,650
Optoelectronics and Manufacturing division, including intersegment revenues	62,548			56,954
Intersegment revenues elimination	(10,373		)	(5,458		)

Total	$	200,050		$	220,855

	Three Months Ended September 30,
	2015			2016
Operating income (loss) — by Segment:
Security division	$	12,635		$	9,350
Healthcare division	2,938			(3,264		)
Optoelectronics and Manufacturing division	5,561			4,650
Corporate	(5,202		)	(9,013		)
Eliminations (2)	(235		)	376

Total	$	15,697		$	2,099

	June 30,			September 30,
	2016			2016
Assets (1) — by Segment:
Security division	$	519,068		$	821,192
Healthcare division	200,067			191,754
Optoelectronics and Manufacturing division	211,337			204,450
Corporate	64,970			38,960
Eliminations (2)	(3,719		)	(3,343		)

Total	$	991,723		$	1,253,013

(1)

(2)

Basis of Presentation (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2016 USD ($) item $ / shares shares	Sep. 30, 2015 USD ($) $ / shares shares
Description of Business
Number of operating segments \| item	3
Computation of basic and diluted earnings per share
Net income available to common stockholders \| $	$ 677	$ 10,805
Weighted average shares outstanding- basic	18,943	19,734
Dilutive effect of equity awards (in shares)	648	740
Weighted average shares outstanding- diluted	19,591	20,474
Basic earnings per share (in dollars per share) \| $ / shares	$ 0.04	$ 0.55
Diluted earnings per share (in dollars per share) \| $ / shares	$ 0.03	$ 0.53
Shares excluded from computation of diluted net income per share:
Stock option and stock awards excluded from computation due to anti-dilutive effect (in shares)	100	100

Basis of Presentation - Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
Fair value of financial instruments
Liabilities - Contingent payment obligations	$ 17,100	$ 17,100
Property and Equipment
Net value of turnkey security screening program assets at Mexico	15,000
Recurring
Fair value of financial instruments
Equity securities	384	354
Insurance company contracts	22,443	21,353
Interest rate contract	(13)	(31)
Total assets	22,814	21,676
Liabilities - Contingent payment obligations	17,117	17,117
Recurring \| Level 1
Fair value of financial instruments
Equity securities	384	354
Total assets	384	354
Recurring \| Level 2
Fair value of financial instruments
Insurance company contracts	22,443	21,353
Interest rate contract	(13)	(31)
Total assets	22,430	21,322
Recurring \| Level 3
Fair value of financial instruments
Total assets	0	0
Liabilities - Contingent payment obligations	$ 17,117	$ 17,117

Business Combinations - Purchase Price and Allocation (Details) - USD ($) $ in Thousands	Sep. 09, 2016	Sep. 30, 2016	Jun. 30, 2016
Allocation of total consideration to assets acquired and liabilities assumed
Goodwill		$ 242,590	$ 122,819
AS&E
Business Combinations
Percentage of ownership interest acquired	100.00%
Total consideration	$ 266,000
Fair value of replacement RSUs and AS&E's RSU	1,400
Cash on hand to pay down the revolving bank line of credit	$ 69,000
Allocation of total consideration to assets acquired and liabilities assumed
Cash and cash equivalents		79,195
Accounts receivable		25,048
Inventories		30,439
Other current assets		7,368
Property and equipment		5,834
Intangible assets		74,800
Other long-term assets		201
Accounts payable		(5,273)
Accrued payroll and related expenses		(4,629)
Deferred revenues - current		(11,281)
Advances from customers		(13,785)
Other accrued expenses and current liabilities		(6,426)
Deferred revenues - long term		(3,225)
Deferred income tax liability		(9,455)
Other long-term liabilities		(18,966)
Net assets acquired		149,845
Goodwill		116,158
Total consideration		$ 266,003

Business Combinations - Intangible Assets (Details) - AS&E $ in Thousands	3 Months Ended
	Sep. 30, 2016 USD ($)
Business Combinations
Amortizable assets	$ 59,300
Total intangible assets	74,800
Trademarks and trade names
Business Combinations
Non-amortizable assets	12,300
IPR&D
Business Combinations
Non-amortizable assets	$ 3,200
Developed technology
Business Combinations
Weighted Average Useful Lives	10 years
Amortizable assets	$ 31,750
Customer relationships/backlog
Business Combinations
Weighted Average Useful Lives	7 years
Amortizable assets	$ 27,550

Business Combinations - Revenue and Income (Details) - AS&E - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Business Combinations
Amount included in revenue	$ 14,200
Amount included in operating income	$ 2,800
pro forma results of operations assume the AS&E acquisition had occurred on July 1, 2015
Revenues		$ 238,611	$ 224,717
Income (loss) before taxes		$ (27,388)	$ 4,705

Balance Sheet Details (Details) - USD ($) $ in Thousands	3 Months Ended
Balance Sheet Details (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016
Accounts Receivable
Accounts receivable	$ 185,448		$ 148,767
Less allowance for doubtful accounts	(7,591)		(7,051)
Total	177,857		141,716
Inventories
Raw materials	140,550		133,540
Work-in-process	63,713		47,460
Finished goods	85,338		92,288
Total	289,601		273,288
Property and Equipment
Property and equipment, gross	399,775		392,017
Less accumulated depreciation and amortization	(220,945)		(208,903)
Property and equipment, net	178,830		183,114
Depreciation expense	13,300	$ 13,000
Land
Property and Equipment
Property and equipment, gross	14,498		14,498
Buildings, civil works and improvements
Property and Equipment
Property and equipment, gross	$ 170,766		170,232
Buildings, civil works and improvements \| Minimum
Property and Equipment
Estimated Useful Lives	20 years
Buildings, civil works and improvements \| Maximum
Property and Equipment
Estimated Useful Lives	40 years
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 9,635		9,015
Leasehold improvements \| Minimum
Property and Equipment
Estimated Useful Lives	1 year
Leasehold improvements \| Maximum
Property and Equipment
Estimated Useful Lives	12 years
Equipment and tooling
Property and Equipment
Property and equipment, gross	$ 159,512		154,309
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	$ 3,340		3,314
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	$ 18,562		17,902
Computer equipment \| Minimum
Property and Equipment
Estimated Useful Lives	3 years
Computer equipment \| Maximum
Property and Equipment
Estimated Useful Lives	5 years
Computer software
Property and Equipment
Property and equipment, gross	$ 19,113		17,769
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	$ 4,349		$ 4,978

Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2016 USD ($)
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 122,819
Goodwill acquired or adjusted during the period	120,004
Foreign currency translation adjustment	(233)
Balance at the end of the period	242,590
Security Division
Changes in the carrying amount of goodwill
Balance at the beginning of the period	32,922
Goodwill acquired or adjusted during the period	120,004
Foreign currency translation adjustment	112
Balance at the end of the period	153,038
Healthcare Division
Changes in the carrying amount of goodwill
Balance at the beginning of the period	42,574
Foreign currency translation adjustment	10
Balance at the end of the period	42,584
Optoelectronics and Manufacturing Division
Changes in the carrying amount of goodwill
Balance at the beginning of the period	47,323
Foreign currency translation adjustment	(355)
Balance at the end of the period	$ 46,968

Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016
Amortizable assets:
Gross Carrying Value	$ 114,603		$ 57,326
Accumulated Amortization	14,704		14,711
Total	99,899		42,615
Total intangible assets
Gross Carrying Value	144,053		70,994
Total intangible assets	129,349		56,283
Amortization expense	2,100	$ 1,100
Trademarks and trade names
Non-amortizable assets:
Gross Carrying Value	26,250		13,668
IPR&D
Non-amortizable assets:
Gross Carrying Value	$ 3,200
Software development costs
Intangible assets
Weighted Average Lives	9 years
Amortizable assets:
Gross Carrying Value	$ 26,935		22,091
Accumulated Amortization	5,627		4,120
Total	$ 21,308		17,971
Patents
Intangible assets
Weighted Average Lives	20 years
Amortizable assets:
Gross Carrying Value	$ 7,916		8,111
Accumulated Amortization	1,362		1,760
Total	$ 6,554		6,351
Developed technology
Intangible assets
Weighted Average Lives	10 years
Amortizable assets:
Gross Carrying Value	$ 39,526		12,901
Accumulated Amortization	3,398		3,969
Total	$ 36,128		8,932
Customer relationships/backlog
Intangible assets
Weighted Average Lives	7 years
Amortizable assets:
Gross Carrying Value	$ 40,226		14,223
Accumulated Amortization	4,317		4,862
Total	$ 35,909		$ 9,361

Goodwill and Intangible Assets - Intangible Amortization (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016
Estimated future amortization expense
2017 (remaining 9 months)	$ 10,627
2018	14,917
2019	14,759
2020	13,048
2021	10,810
2022	8,366
2023 and thereafter, including assets that have not yet begun to be amortized	27,372
Total	99,899		$ 42,615
Software development costs
Estimated future amortization expense
Total	21,308		$ 17,971
Capitalized software development costs	$ 1,400	$ 400

Impairment, Restructuring and Other Charges (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2016 USD ($)
Impairment, Restructuring and Other Charges
Impairment of assets	$ 5,418
Acquisition-related costs	3,874
Facility closure / consolidation	176
Employee termination	471
Other	18
Total impairment, restructuring and other charges	$ 9,957

Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended
Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2012
Borrowings
Amount outstanding		$ 339,000	$ 125,000
Term loans		6,370	6,847
Other long-term debt		1,934	1,966
Total		8,304	8,813
Less current portion of long-term debt		(2,681)	(2,759)
Long-term portion of debt		5,623	$ 6,054
Revolving credit facility
Borrowings
Maximum borrowing capacity		450,000
Sub-limit available for letters of credit		$ 375,000
Unused commitment fee (as a percent)	0.30%	0.20%
Amount outstanding		$ 339,000
Amount outstanding under letters-of-credit		$ 33,200
Revolving credit facility \| Minimum
Borrowings
Unused commitment fee (as a percent)		0.20%
Revolving credit facility \| Maximum
Borrowings
Increase in the credit agreement's borrowing capacity available under certain circumstances		$ 200,000
Unused commitment fee (as a percent)		0.35%
Revolving credit facility \| LIBOR
Borrowings
Interest rate margin (as a percent)	1.75%	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 letters-of-credit		38,500
Available credit facility		16,600
Total cash borrowing sub-limit		$ 1,300
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%

Stockholders' Equity - Stock-based Compensation (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2016 USD ($) $ / shares item shares	Sep. 30, 2015 USD ($) shares
Stock-based Compensation
Number of share-based employee compensation plans \| item	2
Number of share-based employee compensation plans assumed from the acquisition of AS&E \| item	2
Stock based compensation expense \| $	$ 5,410	$ 4,465
Less: Related income tax benefit \| $	(2,142)	(1,699)
Stock based compensation expense, net \| $	$ 3,268	$ 2,766
Weighted-average period	1 year 9 months 18 days
Number of Options
Outstanding at the beginning of the period (in shares)	934,112
Granted (in shares)	328
Exercised (in shares)	(4,136)
Expired or forfeited (in shares)	(2,287)
Outstanding at the end of the period (in shares)	928,017
Exercisable at the end of the period (in shares)	893,538
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) \| $ / shares	$ 28.67
Granted (in dollars per share) \| $ / shares	61.17
Exercised (in dollars per share) \| $ / shares	46.97
Expired or forfeited (in dollars per share) \| $ / shares	71.42
Outstanding at the end of the period (in dollars per share) \| $ / shares	28.50
Exercisable at the end of the period (in dollars per share) \| $ / shares	$ 26.85
Weighted-Average Remaining Contractual Term
Outstanding at the end of the period	3 years 8 months 12 days
Exercisable at the end of the period	3 years 6 months
Aggregate Intrinsic Value
Outstanding at the end of the period \| $	$ 34,600
Exercisable at the end of the period \| $	34,580
Stock Options
Stock-based Compensation
Unrecognized compensation cost \| $	600
Restricted stock and RSU
Stock-based Compensation
Unrecognized compensation cost \| $	$ 29,900
Shares
Nonvested at the beginning of the period (in shares)	530,498
Granted (in shares)	187,815
Vested (in shares)	(24.646)
Replacement RSUs	65,954
Forfeited (in shares)	(3,362)
Nonvested at the end of the period (in shares)	756,259
Weighted-Average Fair Value
Nonvested at the beginning of the period (in dollars per share) \| $ / shares	$ 67.94
Granted (in dollars per share) \| $ / shares	61.26
Vested (in dollars per share) \| $ / shares	$ 68.71
Replacement RSUs \| $ / shares	67.76
Forfeited (in dollars per share) \| $ / shares	$ 70.21
Nonvested at the end of the period (in dollars per share) \| $ / shares	$ 66.23
Performance-based restricted stock units
Shares
Granted (in shares)	155,488	139,300
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	1,700,000
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
2005 AS&E Plan and the 2014 AS&E Plan \| RSU
Number of Options
Granted (in shares)	0
Cost of good sold
Stock-based Compensation
Stock based compensation expense \| $	$ 295	$ 292
Selling, general and administrative
Stock-based Compensation
Stock based compensation expense \| $	5,060	4,108
Research and development
Stock-based Compensation
Stock based compensation expense \| $	$ 55	$ 65

Stockholders' Equity - Share Repurchase Program (Details) - shares	Sep. 30, 2016	Apr. 30, 2016	Oct. 31, 2015	Apr. 30, 2013	Sep. 30, 2004	Mar. 31, 1999
Share Repurchase Program
Number of repurchased shares authorized		1,000,000	500,000	1,000,000	1,000,000	2,000,000
Number of available shares may be repurchased	1,020,763

Retirement Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended
Retirement Benefit Plans (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015
Net Periodic Benefit Costs
Service cost	$ 224	$ 204
Interest cost	7	9
Amortization of prior service cost	70	105
Net periodic pension expense	301	318
Contributions made by the entity to the defined benefit plans	0	0
Contributions made by the entity to defined contribution plans	$ 1,200	$ 1,100

Commitments and Contingencies (Details) $ in Thousands	3 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Sep. 30, 2016 USD ($) item	Sep. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2012 USD ($)
Contingent Acquisition Obligations
Maximum amount of future payments under contingent consideration	$ 33,200
Contingent payment obligations	$ 17,100		$ 17,100
Environmental Contingencies
Number of investigations discovering soil and groundwater contamination at Hawthorne, CA facility \| item	1
Changes in provision for warranties
Warranty provision at beginning of period	$ 15,948	$ 12,738
Additions and adjustments	2,822	3,607
Reductions for warranty repair costs	(1,474)	(3,033)
Warranty provision at end of period	17,296	$ 13,312
Mexican government
Advances from Customers
Advances from customers	$ 18,800		$ 25,000	$ 100,000
Royalty payments
Contingent Acquisition Obligations
Purchase agreements containing royalty payments, number \| item	1

Segment Information - Operations and Identifiable Assets (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2016 USD ($) item customer	Sep. 30, 2015 USD ($) customer	Jun. 30, 2016 USD ($)
Operations and identifiable assets by industry segment
Number of identifiable industry segments \| item	3
Total revenues	$ 220,855	$ 200,050
Income (loss) from operations	2,099	$ 15,697
Segments assets	$ 1,253,013		$ 991,723
Servicio de Administracion Tributaria in Mexico \| Revenue \| Customer
Operations and identifiable assets by industry segment
Number of major customers \| customer	1	1
Percentage of benchmark derived from specified source	13.00%	15.00%
Operating Segments \| Security Division
Operations and identifiable assets by industry segment
Total revenues	$ 123,709	$ 96,410
Income (loss) from operations	9,350	12,635
Segments assets	821,192		519,068
Operating Segments \| Healthcare Division
Operations and identifiable assets by industry segment
Total revenues	45,650	51,465
Income (loss) from operations	(3,264)	2,938
Segments assets	191,754		200,067
Operating Segments \| Optoelectronics and Manufacturing Division
Operations and identifiable assets by industry segment
Total revenues	56,954	62,548
Income (loss) from operations	4,650	5,561
Segments assets	204,450		211,337
Eliminations
Operations and identifiable assets by industry segment
Total revenues	(5,458)	(10,373)
Income (loss) from operations	376	(235)
Segments assets	(3,343)		(3,719)
Corporate
Operations and identifiable assets by industry segment
Income (loss) from operations	(9,013)	$ (5,202)
Segments assets	$ 38,960		$ 64,970