Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Dec. 31, 2019	Jan. 24, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	000-23125
Entity Registrant Name	OSI SYSTEMS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	33-0238801
Entity Address, Address Line One	12525 Chadron Avenue
Entity Address, City or Town	Hawthorne
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90250
City Area Code	(310)
Local Phone Number	978-0516
Title of 12(b) Security	Common Stock
Trading Symbol	OSIS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,305,020
Entity Central Index Key	0001039065
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Dec. 31, 2019	Jun. 30, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 95,056	$ 96,316
Accounts receivable, net	257,385	238,440
Inventories	252,535	273,711
Prepaid expenses and other current assets	43,313	32,432
Total current assets	648,289	640,899
Property and equipment, net	129,588	127,385
Goodwill	309,429	307,108
Intangible assets, net	127,464	132,954
Other assets	87,156	56,518
Total assets	1,301,926	1,264,864
CURRENT LIABILITIES:
Bank lines of credit	91,000	88,000
Current portion of long-term debt	837	804
Accounts payable	106,344	93,500
Accrued payroll and related expenses	38,185	43,521
Advances from customers	32,640	43,227
Other accrued expenses and current liabilities	114,930	112,956
Total current liabilities	383,936	382,008
Long-term debt	262,326	257,752
Deferred income taxes	7,532	7,979
Other long-term liabilities	90,416	65,398
Total liabilities	744,210	713,137
Commitments and contingencies (Note 9)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value-10,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.001 par value-100,000,000 shares authorized; issued and outstanding, 18,167,020 shares at June 30, 2019 and 18,267,574 shares at December 31, 2019	133,566	168,913
Retained earnings	441,270	399,541
Accumulated other comprehensive loss	(17,120)	(16,727)
Total stockholders' equity	557,716	551,727
Total liabilities and stockholders' equity	$ 1,301,926	$ 1,264,864

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Dec. 31, 2019	Jun. 30, 2019
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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	18,267,574	18,167,020
Common stock, shares outstanding	18,267,574	18,167,020

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Net revenues:
Total net revenues	$ 305,342	$ 303,205	$ 596,194	$ 569,454
Cost of goods sold:
Total cost of goods sold	194,569	192,861	386,210	363,197
Gross profit	110,773	110,344	209,984	206,257
Operating expenses:
Selling, general and administrative	63,902	67,097	126,079	128,804
Research and development	14,881	12,805	29,127	26,558
Restructuring and other charges (benefit), net	(929)	(1,265)	(3,028)	2,931
Total operating expenses	77,854	78,637	152,178	158,293
Income from operations	32,919	31,707	57,806	47,964
Interest expense and other expense, net	(4,844)	(5,620)	(9,580)	(10,952)
Income before income taxes	28,075	26,087	48,226	37,012
Provision for income taxes	(7,089)	(6,980)	(6,497)	(8,503)
Net income	$ 20,986	$ 19,107	$ 41,729	$ 28,509
Earnings per share:
Basic (in dollars per share)	$ 1.15	$ 1.06	$ 2.28	$ 1.58
Diluted (in dollars per share)	$ 1.12	$ 1.03	$ 2.22	$ 1.53
Shares used in per share calculation:
Basic (in shares)	18,312	18,085	18,285	18,088
Diluted (in shares)	18,682	18,624	18,783	18,679
Products
Net revenues:
Total net revenues	$ 223,772	$ 225,402	$ 433,533	$ 407,882
Cost of goods sold:
Total cost of goods sold	148,709	150,131	295,051	275,502
Services
Net revenues:
Total net revenues	81,570	77,803	162,661	161,572
Cost of goods sold:
Total cost of goods sold	$ 45,860	$ 42,730	$ 91,159	$ 87,695

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Net income	$ 20,986	$ 19,107	$ 41,729	$ 28,509
Other comprehensive income (loss):
Foreign currency translation adjustment	2,640	(5,388)	(412)	(4,215)
Other	9	9	19	15
Other comprehensive income (loss)	2,649	(5,379)	(393)	(4,200)
Comprehensive income	$ 23,635	$ 13,728	$ 41,336	$ 24,309

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Jun. 30, 2018	$ 169,475	$ 334,745	$ (14,784)	$ 489,436
Balance (in shares) at Jun. 30, 2018	18,032,374
Increase (Decrease) in Shareholders' Equity
Exercise of stock options	$ 789			789
Exercise of stock options (in shares)	49,395
Vesting of RSUs (in shares)	356,705
Shares issued under employee stock purchase program	$ 2,020			2,020
Shares issued under employee stock purchase program (in shares)	39,293
Stock based compensation	$ 13,626			13,626
Repurchase of common stock	$ (21,029)			(21,029)
Repurchase of common stock (in shares)	(288,316)
Taxes paid related to net share settlement of equity awards	$ (12,955)	0	0	(12,955)
Taxes paid related to net share settlement of equity awards (in shares)	(168,544)
Net income		28,509		28,509
Other comprehensive income (loss)			(4,200)	(4,200)
Balance at Dec. 31, 2018	$ 151,926	363,254	(18,984)	496,196
Balance (in shares) at Dec. 31, 2018	18,020,907
Balance at Sep. 30, 2018	$ 156,760	344,147	(13,605)	487,302
Balance (in shares) at Sep. 30, 2018	18,153,123
Increase (Decrease) in Shareholders' Equity
Exercise of stock options	$ 520			520
Exercise of stock options (in shares)	40,361
Vesting of RSUs (in shares)	16,623
Stock based compensation	$ 8,163			8,163
Repurchase of common stock	$ (13,185)			(13,185)
Repurchase of common stock (in shares)	(184,170)
Taxes paid related to net share settlement of equity awards	$ (332)			(332)
Taxes paid related to net share settlement of equity awards (in shares)	(5,030)
Net income		19,107		19,107
Other comprehensive income (loss)			(5,379)	(5,379)
Balance at Dec. 31, 2018	$ 151,926	363,254	(18,984)	496,196
Balance (in shares) at Dec. 31, 2018	18,020,907
Balance at Jun. 30, 2019	$ 168,913	399,541	(16,727)	$ 551,727
Balance (in shares) at Jun. 30, 2019	18,167,020			18,167,020
Increase (Decrease) in Shareholders' Equity
Exercise of stock options	$ 4,032			$ 4,032
Exercise of stock options (in shares)	199,962
Vesting of RSUs (in shares)	387,085
Shares issued under employee stock purchase program	$ 2,065			2,065
Shares issued under employee stock purchase program (in shares)	34,837
Stock based compensation	$ 12,260			12,260
Repurchase of common stock	$ (26,994)			(26,994)
Repurchase of common stock (in shares)	(266,874)
Taxes paid related to net share settlement of equity awards	$ (26,710)	0	0	(26,710)
Taxes paid related to net share settlement of equity awards (in shares)	(254,456)
Net income		41,729		41,729
Other comprehensive income (loss)			(393)	(393)
Balance at Dec. 31, 2019	$ 133,566	441,270	(17,120)	$ 557,716
Balance (in shares) at Dec. 31, 2019	18,267,574			18,267,574
Balance at Sep. 30, 2019	$ 141,049	420,284	(19,769)	$ 541,564
Balance (in shares) at Sep. 30, 2019	18,357,464
Increase (Decrease) in Shareholders' Equity
Exercise of stock options	$ 1,200			1,200
Exercise of stock options (in shares)	32,656
Vesting of RSUs (in shares)	26,219
Stock based compensation	$ 5,844			5,844
Repurchase of common stock	$ (13,732)			(13,732)
Repurchase of common stock (in shares)	(140,823)
Taxes paid related to net share settlement of equity awards	$ (795)			(795)
Taxes paid related to net share settlement of equity awards (in shares)	(7,942)
Net income		20,986		20,986
Other comprehensive income (loss)			2,649	2,649
Balance at Dec. 31, 2019	$ 133,566	$ 441,270	$ (17,120)	$ 557,716
Balance (in shares) at Dec. 31, 2019	18,267,574			18,267,574

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 41,729	$ 28,509
Adjustments to reconcile net income to net cash provided by operating activities, net of effects from acquisitions:
Depreciation and amortization	26,961	28,283
Stock-based compensation expense	12,260	13,626
Deferred income taxes	(53)	(3,308)
Amortization of debt discount and issuance costs	4,646	4,469
Other	877	1,015
Changes in operating assets and liabilities-net of business acquisitions:
Accounts receivable	(19,455)	(13,986)
Inventories	19,930	(2,265)
Prepaid expenses and other assets	(17,646)	(5,863)
Accounts payable	12,739	(9,166)
Accrued payroll and related expenses	(5,381)	(3,760)
Advances from customers	(10,580)	13,676
Other	(6,400)	(10,386)
Net cash provided by operating activities	59,627	40,844
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment	(11,593)	(12,640)
Acquisition of businesses, net of cash acquired	(171)	(18,259)
Acquisition of intangible and other assets	(3,853)	(611)
Net cash used in investing activities	(15,617)	(31,510)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings on bank lines of credit	3,000	36,000
Proceeds from long-term debt	441	817
Payments on long-term debt	(480)	(1,233)
Proceeds from exercise of stock options and employee stock purchase plan	6,097	2,809
Payments of contingent consideration	(1,220)	(1,328)
Repurchases of common stock	(26,994)	(21,029)
Taxes paid related to net share settlement of equity awards	(26,710)	(12,955)
Net cash provided by (used in) financing activities	(45,866)	3,081
Effect of exchange rate changes on cash	596	(1,262)
Net change in cash and cash equivalents	(1,260)	11,153
Cash and cash equivalents-beginning of period	96,316	84,814
Cash and cash equivalents-end of period	95,056	95,967
Cash paid, net during the period for:
Interest	4,242	6,318
Income taxes	$ 9,668	$ 20,711

Basis of Presentation

6 Months Ended

Dec. 31, 2019

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

Description of Business

OSI Systems, Inc., together with our subsidiaries, is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. We sell our products in diversified markets, including homeland security, healthcare, defense and aerospace.

We have three reporting segments: (i) Security, providing security inspection systems and related services, and turnkey security screening solutions; (ii) Healthcare, providing patient monitoring and diagnostic cardiology products and related services and (iii) Optoelectronics and Manufacturing, providing specialized electronic components and electronic manufacturing services for our 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 our Security segment, we provide security screening products and related services internationally. 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, we also provide site design, installation, training and technical support services to our customers. We also provide turnkey security screening solutions, which can include the construction, staffing and long-term operation of security screening checkpoints for our customers.

Through our Healthcare segment, we design, manufacture, market and service patient monitoring and diagnostic cardiology systems and related supplies and accessories internationally. These products are used by care providers in critical care, emergency and perioperative areas within hospitals as well as physicians' offices, medical clinics and ambulatory surgery centers, among others.

Through our Optoelectronics and Manufacturing segment, we design, manufacture and market optoelectronic devices and flex circuits and provide electronics manufacturing services internationally for use in a broad range of applications, including aerospace and defense electronics, X-ray security and inspection systems and medical imaging, chemistry analysis and diagnostics instruments, telecommunications, scanners and industrial automations, automotive diagnostic systems, internet of things (IoT) and consumer wearable products. This division provides products and services to OEM customers and end users as well as to our Security and Healthcare divisions.

Basis of Presentation

The condensed consolidated financial statements include the accounts of OSI Systems, Inc. and our 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 annual financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019 filed with the SEC. The results of operations for the three and six months ended December 31, 2019 are not necessarily indicative of the operating results to be expected for the full 2020 fiscal year or any future periods.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 our company relate to contract revenue, profit and loss recognition, fair values of assets acquired and liabilities assumed in business combinations, values for inventories reported at lower of cost or net realizable value, stock-based compensation expense, income taxes, accrued warranty costs, and the recoverability, useful lives and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill. Changes in estimates are reflected in the periods during which they become known. Due to the inherent uncertainty involved in making estimates, our actual amounts reported in future periods could differ materially from these estimates.

Earnings Per Share Computations

We compute basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. We compute 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 unit awards under the treasury stock method. The underlying equity component of the 1.25% convertible senior notes due 2022 (the “Notes”) discussed in Note 6 to the condensed consolidated financial statements will have a net impact on diluted earnings per share when the average price of our common stock exceeds the conversion price because the principal amount of the Notes is intended to be settled in cash upon conversion. There was no dilutive effect of the Notes for the three and six months ended December 31, 2018 and 2019.

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Net income available to common stockholders	$	19,107	$	20,986	$	28,509	$	41,729

Weighted average shares outstanding—basic		18,085		18,312		18,088		18,285
Dilutive effect of equity awards		539		370		591		498
Weighted average shares outstanding—diluted		18,624		18,682		18,679		18,783

Basic earnings per share	$	1.06	$	1.15	$	1.58	$	2.28
Diluted earnings per share	$	1.03	$	1.12	$	1.53	$	2.22

Shares excluded from diluted earnings per share due to their anti-dilutive effect		126		94		81		85

Cash and Cash Equivalents

We consider all highly liquid investments with maturities of three months or less as of the acquisition date to be cash equivalents.

Our cash and cash equivalents totaled $95.1 million at December 31, 2019. Of this amount, approximately 82% was held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were held primarily by our subsidiaries in Singapore, the United Kingdom, Malaysia and Canada and to a lesser extent in Mexico, Germany, India, and Albania among others. We have cash holdings that exceed insured limits for financial institutions; however, we mitigate this risk by utilizing high credit quality financial institutions throughout the world.

Fair Value of Financial Instruments

Our financial instruments consist primarily of cash and cash equivalents, insurance company contracts, 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 our long-term debt instruments are considered to approximate their fair values, as the interest rates of these instruments are variable or comparable to current rates available to us.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.The "Level 1" category includes assets and liabilities measured at quoted prices in active markets for identical assets and liabilities. The"Level 2" category includes assets and liabilities measured from observable inputs other than quoted market prices.The "Level 3" category includes assets and liabilities for which valuation inputs are unobservable and significant to the fair value measurement. As of June 30, 2019 and December 31, 2019, there were no assets in the "Level 3" category. Our contingent payment obligations related to acquisitions, which are further discussed in Note 9 to the condensed consolidated financial statements, are in the “Level 3” category for valuation purposes.

The fair values of our financial assets and liabilities are categorized as follows (in thousands):


	June 30, 2019								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Insurance company contracts	$	—	$	35,899	$	—	$	35,889	$	—	$	38,625	$	—	$	38,625
Liabilities:
Contingent consideration	$	—	$	—	$	16,577	$	16,577	$	—	$	—	$	16,671	$	16,671

Goodwill Impairment

Goodwill represents the excess purchase price over the estimated fair value of the assets acquired and liabilities assumed in a business combination. Goodwill is allocated to our segments based on the nature of the product line of the acquired business. The carrying value of goodwill is not amortized, but is annually tested for impairment during our second fiscal quarter and more frequently if there is an indicator of impairment. We assess qualitative factors of each of our three reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The assessments conducted as of December 31, 2019 indicated that it is not more likely than not that the fair values of all three reporting units are less than their carrying amounts, including goodwill. Thus, we have determined that there is no goodwill impairment for all three reporting units.

Revenue Recognition

We recognize revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which superseded all prior revenue recognition methods and industry-specific guidance. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

Product Sales. We recognize revenue from sales of products upon shipment or delivery when control of the product transfers to the customer, depending on the terms of each sale, and when collection is probable. In the circumstance where terms of a product sale include subjective customer acceptance criteria, revenue is deferred until we have achieved the acceptance criteria unless the customer acceptance criteria are perfunctory or inconsequential. We generally offer customers payment terms of less than one year. In cases when payment terms extend beyond one year, we consider whether the contract has a significant financing component.

Service Revenue. Revenue from services includes installation and implementation of products and turnkey security screening services and after-market services. Generally, revenue from services is recognized over time as the services are performed. Revenues from out of warranty service maintenance contracts are recognized ratably over the respective terms of such contracts. Deferred revenue for such services arises from payments received from customers for services not yet performed.

Contract Revenue. Sales agreements with customers can be project specific, cover a period of time, and can be renewable periodically. The contracts may contain terms and conditions with respect to payment, delivery, installation, services, warranty and other rights. In certain instances, we consider an accepted customer order, governed by a master sales agreement, to be the contract with the customer when legal rights and obligations exist. Contracts with customers may include the sale of products and services, as discussed in the paragraphs above. In certain instances, contracts can contain multiple performance obligations as discussed in the paragraph below. According to the terms of a sale contract, we may receive consideration from a customer prior to transferring goods to the customer, and we record these prepayments as a contract liability. We also record deferred revenue, typically related to service contacts, when consideration is received before the services have been performed. We recognize contract liabilities and deferred revenue as net sales after all revenue recognition criteria are met.

When determining revenue recognition for contracts, we use judgment based on our understanding of the obligations in each contract. We determine 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.

Multiple Performance Obligations. Certain agreements with customers include the sale of capital equipment involving multiple elements that may include civil works to prepare a site for the installation of equipment, manufacture and delivery of equipment, installation and integration of equipment, training of customer personnel to operate the equipment and after-market service of the equipment. We generally separate multiple elements in a contract into separate performance obligations if those elements are distinct, both individually and in the context of the contract. If multiple promises comprise a series of distinct services which are substantially the same and have the same pattern of transfer, they are combined and accounted for as a single performance obligation.

In cases where obligations in a contract are distinct and thus require separation into multiple performance obligations, revenue recognition guidance requires that contract consideration be allocated to each distinct performance obligation based on its relative standalone selling price. The value allocated to each performance obligation is then recognized as revenue when the revenue recognition criteria for each distinct promise or bundle of promises has been met.

The standalone selling price for each performance obligation is an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the good or service. When there is only one performance obligation associated with a contract, the entire amount of consideration is attributed to that obligation. When a contract contains multiple performance obligations the standalone selling price is first estimated using the observable price, which is generally a list price net of applicable discount or the price used to sell the good or service in similar circumstances. In circumstances when a selling price is not directly observable, we will estimate the standalone selling price using information available to us including our market assessment and expected cost plus margin.

The timetable for fulfilment of each of the distinct performance obligations can range from completion in a short amount of time and entirely within a single reporting period to completion over several reporting periods. The timing of revenue recognition for each performance obligation may be dependent upon several milestones, including physical delivery of equipment, completion of factory acceptance test, completion of site acceptance test, installation and connectivity of equipment, certification of training of personnel and, in the case of after-market service deliverables, the passage of time (typically evenly over the post-warranty period of the service deliverable).

We often provide a guarantee to support our performance under the contract which may contain one or more performance obligations. In the event that customers are permitted to terminate such arrangements, the underlying contract typically requires payment by the customer for deliverables and reimbursement of costs incurred through the date of termination.

We disaggregate revenue by reporting segment (Security, Optoelectronics and Manufacturing, and Healthcare) to depict the nature of revenue in a manner consistent with our business operations and to be consistent with other communications and public filings. Refer to Note 11 to our condensed consolidated financial statements for additional details of revenues by reporting segment.

Contract Assets and Liabilities. We enter into contracts to sell products and provide services, and we recognize contract assets and liabilities that arise from these transactions. We recognize revenue and corresponding accounts receivable according to ASC 606 and, at times, recognize revenue in advance of the time when contracts give us the right to invoice a customer. We may also receive consideration, per the terms of a contract, from customers prior to transferring goods to the customer. We record customer deposits as a contract liability. Additionally, we may receive payments, most typically for service and warranty contracts, at the onset of the contract and before the services have been performed. In such instances, we record a deferred revenue liability. We recognize these contract liabilities as sales after all revenue recognition criteria are met.

The table below shows the balance of our contract assets and liabilities as of June 30, 2019 and December 31, 2019, including the change between the periods (in thousands):


	June 30,		December 31,
Contract Assets:	2019		2019		Change		% Change
Unbilled revenue	$	19,287	$	31,985	$	12,698	66	%


Contract Liabilities:
Advances from customers	$	43,227	$	32,640	$	(10,587)	(24)	%
Deferred revenue—current		33,641		30,171		(3,470)	(10)	%
Deferred revenue—long-term		9,506		8,351		(1,155)	(12)	%

Contract assets increased during the six months ended December 31, 2019 primarily due to satisfaction of performance obligations for explosive detection systems and cargo and vehicle inspection systems in our Security division which have not yet been billed to customers. The net decrease in contract liabilities were primarily due to satisfaction of performance obligations and application of payments against customer billings on cargo and vehicle system contracts in our Security division.

Remaining Performance Obligations. Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations under an original contract with a term greater than one year which are fully or partially unsatisfied at the end of the period. As of December 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $189.2 million. We expect to recognize revenue on approximately 51% of the remaining performance obligations over the next 12 months, and the remainder is expected to be recognized thereafter. During the six months ended December 31, 2019, we recognized revenue of $52.2 million from contract liabilities existing at the beginning of the period.

Practical Expedients. In cases where we are responsible for shipping after the customer has obtained control of the goods, we have elected to treat the shipping activities as fulfillment activities rather than as a separate performance obligation. Additionally, we have elected to capitalize the cost to obtain a contract only if the period of amortization would be longer than one year. We only give consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year.

Lease Accounting

Right of use (“ROU”) assets represent our right to use an underlying asset during the reasonably certain lease terms and lease liabilities represent our obligation to make lease payments arising from the leases. We recognize ROU lease assets and lease liabilities at lease commencement on our consolidated balance sheet based on the present value of lease payments over the lease term using a discount rate determined based on our incremental borrowing rate since the rate implicit in each lease is not readily determinable. We elected the package of practical expedients, which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component. We also elected the hindsight practical expedient, which allows us to use hindsight in determining the lease term. We do not record an ROU asset and corresponding lease liability for leases with an initial term of 12 months or less (“short-term leases”). The terms in our leases may include options to extend or terminate the lease. We recognize ROU assets and liabilities when it is reasonably certain that we will exercise those options. Judgment is required in our assessment as to whether renewal or termination options are reasonably certain to be exercised and factors such as contractual terms compared to current market rates, the importance of the facility and location to our operations, among others, are considered. Lease payments are made in accordance with the lease terms and lease expense, including short-term lease expense, is recognized on a straight-line basis over the lease term.

We lease facilities and certain equipment under various operating lease agreements. The majority of our lease arrangements are comprised of fixed payments while certain of our other leases provide for periodic rent increases. Our leases may contain escalation clauses and renewal options. Most of the leases require us to pay for certain other costs such as common area maintenance and property taxes. Rent expense for leases with periodic rent increases or escalation clauses is recognized on a straight-line basis over the minimum lease term. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. We also have finance leases for fleet vehicles that are not material to the condensed consolidated financial statements.

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


	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Operating lease cost	$	2,597	$	5,246
Variable lease cost		176		314
Short-term lease cost		186		395
	$	2,959	$	5,955

Supplemental balance sheet assets and liabilities related to operating leases were as follows (in thousands):


	Balance Sheet Category	December 31, 2019
Operating lease ROU assets, net	Other assets	$	26,897

Operating lease liabilities, current portion	Other accrued expenses and current liabilities	$	8,159
Operating lease liabilities, long-term	Other long-term liabilities		19,084
Total operating lease liabilities		$	27,243

Weighted average remaining lease term			4.5 years
Weighted average discount rate			4.4%

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


	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Cash paid for operating lease liabilities	$	2,625	$	5,198
ROU assets obtained in exchange for new lease obligations		165		1,479

Maturities of operating lease liabilities under ASC 842 (defined below) at December 31, 2019 were as follows (in thousands):


	December 31, 2019
Less than one year	$	9,109
1 – 2 years		7,024
2 – 3 years		4,499
3 – 4 years		3,301
4 – 5 years		2,539
Thereafter		3,594
		30,066
Less: Imputed interest		(2,823)
Total lease liabilities	$	27,243

Maturities of minimum operating lease liabilities under non-cancelable leases under ASC 840 (defined below) at June 30, 2019 were as follows (in thousands):


	June 30, 2019
Less than one year	$	9,802
1 – 2 years		8,082
2 – 3 years		5,473
3 – 4 years		3,397
4 – 5 years		2,954
Thereafter		4,583
Total lease liabilities	$	34,291

Recently Adopted Accounting Pronouncement

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASC 842”), which requires lessees to recognize ROU assets and lease liabilities, initially measured at present value of the lease payments, on its balance sheet for leases and classified as either financing or operating leases. We adopted ASC 842 on July 1, 2019, using the modified retrospective method, and we elected the package of practical expedients provided in ASC 842. In accordance with ASC 842, we did not restate comparative periods and instead reported comparative prior year periods under ASC 840, “Leases.”

The cumulative effect of the changes made to our July 1, 2019 consolidated condensed balance sheet for the adoption of the new lease standard was as follows (in thousands):


	Balance at		Effect of Adoption		Balance at
Balance Sheet	June 30, 2019		of ASC 842		July 1, 2019
Assets
Other assets	$	56,518	$	30,066	$	86,584
Liabilities
Other accrued expenses and current liabilities	$	112,956	$	8,324	$	121,280
Other long-term liabilities		65,398		21,742		87,140

The adoption of the new lease accounting guidance did not have a material impact to the condensed consolidated statement of operations or the condensed consolidated statement of cash flows for the six months ended December 31, 2019.

Recently Issued Accounting Pronouncements Not Yet Adopted

Income Taxes

On December 18, 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 removes certain exceptions to the general principles of ASC 740, and is intended to improve consistency and simplify GAAP in several other areas of ASC 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities for annual reporting periods beginning after December 15, 2020, and interim periods within those reporting periods. Early adoption is permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the potential impact of adoption of this guidance on our consolidated financial statements.

Retirement Benefit Plans

In August 2018, the FASB issued authoritative guidance under ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU eliminates requirements for certain disclosures and requires additional disclosures under defined benefit pension plans and other post-retirement plans. We are required to adopt this new guidance in the first quarter of fiscal 2021. We are currently evaluating the potential impact of the adoption of this guidance on our consolidated financial statements.

Intangibles

In August 2018, the FASB issued authoritative guidance under ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This ASU requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software and deferred over the non-cancellable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. We are required to adopt this new guidance in the first quarter of fiscal 2021. We are currently evaluating the potential impact of adoption of this guidance on our consolidated financial statements.

Business Combinations

6 Months Ended

Dec. 31, 2019

Business Combinations

Business Combinations

2. Business Combinations

Under ASC 805, Business Combinations, the acquisition method of accounting requires us to record assets acquired less liabilities assumed in an acquisition at their estimated fair values at the date of acquisition. Any excess of the total estimated purchase consideration over the estimated fair value of the assets acquired less liabilities assumed 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. We may record adjustments to the assets acquired and liabilities assumed, with corresponding adjustments to goodwill, during the one-year post-acquisition measurement period as additional information becomes available. Upon the conclusion of the measurement period, any subsequent adjustments are reflected in reported earnings.

Fiscal Year 2020 Business Acquisition

There were no acquisitions during the six months ended December 31,2019.

Fiscal Year 2019 Business Acquisitions

In January 2019, we (through our Security division) completed an acquisition of a privately held sales and services company. The acquisition was financed with cash on hand and was in an amount determined to be insignificant by management.

In August 2018, we (through our Security division) completed an acquisition of a privately held services company for approximately $0.8 million, plus up to approximately $5 million in contingent consideration, which may be earned over a five-year period. The acquisition was financed with cash on hand. The goodwill recognized for this business is not deductible for income tax purposes.

In July 2018, we (through our Optoelectronics and Manufacturing division) acquired an optoelectronics solutions business for $17.5 million, plus up to $1 million in potential contingent consideration. The acquisition was financed with cash on hand and borrowings under our existing revolving bank line of credit. The goodwill recognized for this business is deductible for income tax purposes.

These business acquisitions, individually and in the aggregate, were not material to our consolidated financial statements. Accordingly, pro-forma historical results of operations related to these businesses have not been presented.

Balance Sheet Details

6 Months Ended

Dec. 31, 2019

Balance Sheet Details

Balance Sheet Details

3. Balance Sheet Details

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


	June 30,		December 31,
Accounts receivable, net	2019		2019
Accounts receivable	$	253,504	$	272,285
Less allowance for doubtful accounts		(15,064)		(14,900)
Total	$	238,440	$	257,385

	June 30,		December 31,
Inventories	2019		2019
Raw materials	$	143,697	$	138,915
Work-in-process		67,897		65,458
Finished goods		62,117		48,162
Total	$	273,711	$	252,535


	June 30,		December 31,
Property and equipment, net	2019		2019
Land	$	16,564	$	16,569
Buildings, civil works and improvements		55,391		55,747
Leasehold improvements		8,311		8,734
Equipment and tooling		128,428		135,858
Furniture and fixtures		3,190		2,953
Computer equipment		18,733		19,454
Computer software		20,146		20,140
Computer software implementation in process		8,563		10,156
Construction in process		5,760		6,400
Total		265,086		276,011
Less accumulated depreciation and amortization		(137,701)		(146,423)
Property and equipment, net	$	127,385	$	129,588

Depreciation and amortization expense for property and equipment was $5.2 million and $5.4 million for the three months ended December 31, 2018 and 2019, respectively, and $10.3 million and $10.5 million for the six months ended December 31, 2018 and 2019, respectively.

Goodwill and Intangible Assets

6 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets

Goodwill and Intangible Assets

4. Goodwill and Intangible Assets

The changes in the carrying value of goodwill by segment for the six-month period ended December 31, 2019 are as follows (in thousands):


					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division		Consolidated
Balance as of June 30, 2019	$	200,079	$	40,064	$	66,965	$	307,108
Goodwill adjusted during the period		1,843		—		—		1,843
Foreign currency translation adjustment		(116)		90		504		478
Balance as of December 31, 2019	$	201,806	$	40,154	$	67,469	$	309,429

Intangible assets consisted of the following (in thousands):


		June 30, 2019						December 31, 2019
	Weighted	Gross						Gross
	Average	Carrying		Accumulated		Intangibles		Carrying		Accumulated		Intangibles
	Lives	Value		Amortization		Net		Value		Amortization		Net
Amortizable assets:
Software development costs	8 years	$	29,393	$	(12,747)	$	16,646	$	32,584	$	(14,761)	$	17,823
Patents	19 years		8,688		(1,927)		6,761		9,288		(2,138)		7,150
Developed technology	10 years		53,460		(14,050)		39,410		53,464		(16,780)		36,684
Customer relationships/backlog	7 years		63,101		(22,132)		40,969		62,767		(26,217)		36,550
Total amortizable assets			154,642		(50,856)		103,786		158,103		(59,896)		98,207
Non-amortizable assets:
IPR&D			2,290		—		2,290		2,288		—		2,288
Trademarks			26,878		—		26,878		26,969		—		26,969
Total intangible assets		$	183,810	$	(50,856)	$	132,954	$	187,360	$	(59,896)	$	127,464

Amortization expense related to intangible assets was $5.6 million and $4.5 million for the three-month periods ended December 31, 2018 and 2019, respectively. For the six months ended December 31, 2018 and 2019, amortization expense was $10.9 million and $9.4 million, respectively.

At December 31, 2019, the estimated future amortization expense for intangible assets was as follows (in thousands):


2020 (remaining 6 months)	$	9,308
2021		17,662
2022		15,406
2023		14,104
2024		13,321
Thereafter, including assets that have not yet begun to be amortized		28,406
Total	$	98,207

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 December 31, 2018 and 2019, we capitalized software development costs in the amounts of $0.6 million and $1.9 million, respectively. For the six months ended December 31, 2018 and 2019, we capitalized software development costs in the amount of $1.0 million and $3.2 million, respectively.

Restructuring and Other Charges

6 Months Ended

Dec. 31, 2019

Restructuring and Other Charges

Restructuring and Other Charges

5. Restructuring and Other Charges

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

During the three and six months ended December 31, 2018, we recovered certain legal costs related to class action litigation and government investigations through insurance reimbursements. We incurred additional legal fees related to these matters as well as restructuring charges by the divisions as noted in the tables below. This resulted in a net (benefit) expense of $(1.3) million and $2.9 million for the three and six months ended December 31, 2018, respectively.

During the three and six months ended December 31, 2019, we continued to recover certain legal costs related to class action litigation and government investigations through insurance reimbursement. These reimbursements were partially offset by additional legal fees related to these matters and severance costs associated with headcount reductions. This resulted in a net benefit of $0.9 million and $3.0 million during the three and six months ended December 31, 2019, respectively.

The following table summarizes restructuring and other charges (benefit), net for the periods set forth below (in thousands):


	Three Months Ended December 31, 2018
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	20	$	—	$	20
Employee termination costs		(46)		1,227		26		—		1,207
Facility closures/consolidation		—		2,108		—		—		2,108
Legal costs		—		—		—		(4,600)		(4,600)
Total expensed	$	(46)	$	3,335	$	46	$	(4,600)	$	(1,265)


	Three Months Ended December 31, 2019
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	—	$	—	$	—
Employee termination costs		406		—		30		—		436
Facility closures/consolidation		—		—		—		—		—
Legal costs		—		—		—		(1,365)		(1,365)
Total expensed	$	406	$	—	$	30	$	(1,365)	$	(929)


	Six Months Ended December 31, 2018
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	287	$	—	$	287
Employee termination costs		—		1,418		133		—		1,551
Facility closures/consolidation		—		2,108		—		—		2,108
Legal costs		—		—		—		(1,015)		(1,015)
Total expensed	$	—	$	3,526	$	420	$	(1,015)	$	2,931


	Six Months Ended December 31, 2019
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	—	$	—	$	—
Employee termination costs		406		—		17		71		494
Facility closures/consolidation		—		—		—		—		—
Legal costs		—		—		—		(3,522)		(3,522)
Total expensed	$	406	$	—	$	17	$	(3,451)	$	(3,028)

The changes in the accrued liability for restructuring and other charges for the six-month period ended December 31, 2019 were as follows (in thousands):


	Employee
	Termination		Legal Costs and
	Costs		Settlements		Total
Balance as of June 30, 2019	$	432	$	6,331	$	6,763
Restructuring and other charges (benefit), net		494		(3,522)		(3,028)
(Payments), adjustments and reimbursements, net		(893)		1,527		634
Balance as of December 31, 2019	$	33	$	4,336	$	4,369

Borrowings

6 Months Ended

Dec. 31, 2019

Borrowings

Borrowings

6. Borrowings

Revolving Credit Facility

Under our revolving credit facility, the aggregate committed amount available to us is $535 million. The credit facility matures in April 2024. The credit facility includes a $300 million sub-limit for letters of credit. Under certain circumstances, we have the ability to increase the facility by the greater of $250 million or such amount as would not cause our secured leverage ratio to exceed a specified level. Borrowings under this facility bear interest at LIBOR plus a margin of 1.0% as of December 31, 2019 (which margin can range from 1.0% to 1.75% based on our consolidated net leverage ratio as defined in the credit facility). The LIBOR index is expected to be discontinued by the end of calendar year 2021. The terms of our revolving credit facility allow for a replacement rate if the LIBOR index is discontinued. Letters of credit reduce the amount available to borrow by their face value amounts. The unused portion of the facility bears a commitment fee of 0.10% as of December 31, 2019 (which fee can range from 0.10% to 0.25% based on our consolidated net leverage ratio as defined in the credit facility). Our borrowings under the credit agreement are guaranteed by certain of our U.S.-based subsidiaries and are secured by substantially all of our assets and substantially all the assets of certain of our subsidiaries. The agreement contains various representations and warranties, affirmative, negative and financial covenants and conditions of default. As of December 31, 2019, there was $91.0 million of borrowings outstanding under the revolving credit facility and $53.7 million outstanding under the letters of credit sub facility. The amount available to borrow under the credit facility as of December 31, 2019 was $390.3 million. Loan amounts under the revolving credit facility may be borrowed, repaid and re-borrowed during the term. Although the principal amount of each revolving loan is due and payable in full on the maturity date, we have the right to repay each revolving loan in whole or in part from time to time without penalty. It is our practice to routinely borrow and repay several times per year under this revolving facility. Therefore, borrowings under the credit facility are included in current liabilities. As of December 31, 2019, we were in compliance with all covenants under this credit facility.

1.25% Convertible Senior Notes Due 2022

In February 2017, we issued $287.5 million of the Notes in a private offering. The Notes are governed by an indenture dated February 22, 2017. The maturity for the payment of principal is September 1, 2022. The Notes bear interest at the rate of 1.25% and are payable in cash semiannually in arrears on each March 1 and September 1. The Notes are senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our

subsidiaries, as well as any of our existing and future indebtedness that may be guaranteed by our subsidiaries to the extent of such guarantees (including the guarantees of certain of our subsidiaries under our existing revolving credit facility).

The Notes are convertible prior to March 1, 2022 only upon specified events and during specified periods and are, thereafter convertible, at any time, in each case at an initial conversion rate of 9.3056 per $1,000 principal amount of the Notes, which is equal to an initial conversion price of approximately $107.46 per share or a 38.5% premium to our stock price at the time of the issuance. The conversion rate is subject to adjustment upon certain events. Upon conversion, the Notes may be settled, at our election, in shares of our common stock, cash or a combination of cash and shares of common stock. We have initially elected a combination settlement method to satisfy the conversion obligation, which allows us to settle the principal amount of the Notes in cash and to settle the excess conversion value, if any, in shares of common stock, as well as cash in lieu of fractional shares.

We may not redeem the Notes prior to March 6, 2020. Thereafter, we may redeem the Notes if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days. If we undergo a fundamental change, as defined in the indenture for the Notes, subject to certain conditions, holders of the Notes may require us to repurchase all or part of the Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The occurrence of a fundamental change will also result in the Notes becoming immediately convertible. Since the last reported sales price of our Common Stock did not exceed 130% of the conversion price for at least 20 trading days within any applicable period of 30 consecutive trading days during the three months ended December 31, 2019, the Notes are not yet convertible.

Pursuant to ASC 470-20, we allocated the $287.5 million gross proceeds of the Notes between liability and equity components. The initial $242.4 million liability component was determined based on the fair value of similar debt instruments excluding the conversion feature for similar terms and priced on the same day the Notes were issued. The initial $45.1 million equity component represents the debt discount and was calculated as the difference between the fair value of the debt and the gross proceeds of the Notes. Issuance costs of $7.7 million were allocated between debt ($6.5 million) and equity ($1.2 million) components with the portion allocated to the debt presented as an offset against long term debt in the consolidated balance sheet and being amortized as interest expense over the life of the Notes using the effective interest method. The total interest expense recognized for the three and six months ended December 31, 2019 related to the Notes was $3.2 million and $6.4 million, respectively, which consisted of $0.9 million and $1.8 million of contractual interest expense, $2.0 million and $4.0 million of debt discount amortization and $0.3 million and $0.6 million of amortization of debt issuance costs. The total interest expense recognized for the three months and six months ended December 31, 2018 was $3.2 million and $6.3 million, respectively, which consisted of $0.9 million and $1.8 million of contractual interest expense, $2.0 million and $3.9 million of debt discount amortization and $0.3 million and $0.6 million of amortization of debt issuance costs. As of June 30, 2019 and December 31, 2019, the unamortized debt discount was $27.3 million and $23.2 million, respectively, which is being amortized over the remaining contractual term to maturity of the Notes using an effective interest rate of 4.50%. The unamortized debt issuance cost of $3.7 million and $3.1 million as of June 30, 2019 and December 31, 2019, respectively, is amortized on a straight-line basis, which approximates the effective interest method, over the life of the Notes.

Other Borrowings

Several of our foreign subsidiaries maintain bank lines-of-credit, denominated in local currencies and U.S. dollars, primarily for the issuance of letters-of-credit. As of December 31, 2019, $49.8 million was outstanding under these letter-of-credit facilities. As of December 31, 2019, the total amount available under these credit facilities was $18.6 million.

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


	June 30,		December 31,
	2019		2019
1.25% convertible notes due 2022:
Principal amount	$	287,500	$	287,500
Unamortized discount		(27,283)		(23,225)
Unamortized debt issuance costs		(3,722)		(3,134)
		256,495		261,141
Other long-term debt		2,061		2,022
		258,556		263,163
Less current portion of long-term debt		(804)		(837)
Long-term portion of debt	$	257,752	$	262,326

Stockholders' Equity

6 Months Ended

Dec. 31, 2019

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

Stock-based Compensation

As of December 31, 2019, we maintained the Amended and Restated 2012 Incentive Award Plan (the "2012 Plan ") and the Amended and Restated 2006 Equity Participation Plan ("2006 Plan") as stock-based employee compensation plans. No further grants may be made under the 2006 Plan. The 2012 Plan and the 2006 Plan are collectively referred to as the "OSI Plans."

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Cost of goods sold	$	150	$	156	$	356	$	328
Selling, general and administrative		7,833		5,548		12,945		11,633
Research and development		180		140		325		299
Stock-based compensation expense	$	8,163	$	5,844	$	13,626	$	12,260

As of December 31, 2019, total unrecognized compensation cost related to share-based compensation grants under the OSI Plans were estimated at $0.3 million for stock options and $22.8 million for RSUs. We expect to recognize these costs over a weighted average period of 1.6 years with respect to the stock options and 1.7 years for grants of RSUs.

The following summarizes stock option activity during the six months ended December 31, 2019:


		Weighted Average		Weighted-Average	Aggregate
	Number of	Exercise		Remaining Contractual	Intrinsic Value
	Options	Price		Term	(in thousands)
Outstanding at June 30, 2019	515,884	$	33.74
Granted	—		—
Exercised	(199,962)		20.16
Expired or forfeited	(941)		84.93
Outstanding at December 31, 2019	314,981		42.20	2.6 years	$	18,438
Exercisable at December 31, 2019	296,566		39.98	2.3 years		18,019

The following summarizes RSU award activity during the six months ended December 31, 2019:


		Weighted-
		Average
	Shares	Fair Value
Nonvested at June 30, 2019	521,140	$	73.97
Granted	278,060		87.19
Vested	(387,085)		68.56
Forfeited	(8,235)		81.90
Nonvested at December 31, 2019	403,880		88.09

As of December 31, 2019, there were approximately 1.1 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.

We granted 97,514 and 81,621 performance-based RSUs during the six months ended December 31, 2018 and 2019, respectively. These performance based RSU awards are contingent on the achievement of certain performance metrics. The payout related to these awards can range from zero to 280% of the original number of shares or units awarded.

Stock Repurchase Program

In March 2018, the Board of Directors authorized a stock repurchase program of up to 1,000,000 shares. Repurchases may be made from time to time under the program through open-market purchases or privately-negotiated transactions at our discretion. Upon repurchase, the shares are restored to the status of authorized but unissued shares and we record them as a reduction in the number of shares of Common Stock issued and outstanding in our consolidated financial statements.

During the six months ended December 31, 2019, we repurchased 266,874 shares of our common stock. As of December 31, 2019, an additional 295,833 shares were available for repurchase under the current stock repurchase program.

Dividends

We have not paid any cash dividends since the consummation of our initial public offering in 1997 and we do not currently intend to pay any cash dividends in the foreseeable future. Our Board of Directors will determine the payment of future cash dividends, if any. Certain of our current bank credit facilities restrict the payment of cash dividends and future borrowings may contain similar restrictions.

Retirement Benefit Plans

6 Months Ended

Dec. 31, 2019

Retirement Benefit Plans

Retirement Benefit Plans

8. Retirement Benefit Plans

We sponsor various retirement benefit plans including qualified and nonqualified defined benefit pension plans for our employees. The components of net periodic pension expense are as follows (in thousands):


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Service cost	$	98	$	100	$	196	$	200
Interest cost		8		8		16		16
Amortization of prior service cost		14		13		28		26
Net periodic pension expense	$	120	$	121	$	240	$	242

For the three and six months ended December 31, 2018, we made contributions of $1.0 million to these defined benefit plans. For the three and six months ended December 31, 2019, we made no contributions to these defined benefit plans.

We also maintain various defined contribution plans. For the three months ended December 31, 2018 and 2019, we made contributions of $1.3 million and $1.4 million, respectively, to these defined contribution plans. For the six months ended December 31, 2018 and 2019, we made contributions of $3.1 million and $3.2 million, respectively, to these defined contribution plans.

Commitments and Contingencies

6 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Commitments and Contingencies

9. Commitments and Contingencies

Acquisition-Related Contingent Obligations

Under the terms and conditions of the purchase agreements associated with certain acquisitions, we may be obligated to make additional payments based on the achievement of certain sales or profitability milestones through the acquired operations. For agreements that contain contingent consideration caps, the remaining maximum amount of such potential future payments is $26.2 million as of December 31, 2019.

We account for such contingent payments for acquisitions which occurred through the end of fiscal year 2009 as additions to the purchase price of the acquired business. We made $1.3 million of such payments during the three and six months ended December 31, 2018, and $1.1 million and $1.2 million of such payments during the three and six months ended December 31, 2019, respectively.

For acquisitions completed after fiscal 2009, pursuant to Financial Accounting Standard 141R, which was codified into ASC 805, 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 consolidated financial statements. The estimated fair value measurements of contingent earn-out obligations are primarily based on unobservable inputs, which may include projected revenues, gross margins, operating income, and the estimated probability of achieving the earn-outs.

These projections and probabilities are used to estimate future contingent earnout payments, which are discounted back to present value to compute contingent earnout liabilities. The following table provides a roll-forward from June 30, 2019 to December 31, 2019 of the contingent consideration liability, which is included in other accrued expenses and current liabilities, and other long-term liabilities in our consolidated balance sheets (in thousands):


Beginning fair value, June 30, 2019	$	16,577
Addition of contingent earnout obligations		—
Foreign currency translation adjustment		137
Changes in fair value for contingent earnout obligations		(43)
Payments on contingent earnout obligations		—
Ending fair value, December 31, 2019	$	16,671

Environmental Contingencies

We are subject to various environmental laws. Our practice is to conduct appropriate environmental investigations at our 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, we have conducted further environmental assessments consisting of soil and groundwater testing and other investigations deemed appropriate by independent environmental consultants.

We continue to investigate contamination of the soil and groundwater beneath the Hawthorne, California facility that resulted from unspecified on-and off-site releases occurring prior to our occupancy. We believe the releases are of a historical nature and not uncommon to the region in general. We continue to take voluntary actions, in cooperation with the local governing agency, to fully investigate the site in order to develop appropriate remedial actions.

We have not accrued for loss contingencies relating to the Hawthorne facility or any other environmental matters because we believe that, although unfavorable outcomes may be possible, they are not considered by our management to

be probable and reasonably estimable. If one or more of these environmental matters are resolved in a manner adverse to us, the impact on our business, financial condition, results of operations and cash flow could be material.

Indemnifications and Certain Employment-Related Contingencies

In the normal course of business, we have agreed to indemnify certain parties with respect to certain matters. We have 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, we have entered into indemnification agreements with our directors and certain of our 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. We have not recorded any liability for costs related to contingent indemnification obligations as of December 31, 2019.

On December 31, 2017, we and Deepak Chopra, our Chief Executive Officer, entered into an amendment to Mr. Chopra's employment agreement that, among other things, provides for a $13.5 million bonus payment to Mr. Chopra on or within 45 days of January 1, 2024 contingent upon Mr. Chopra's continued employment with us through that date, subject to accelerated payout terms in the event of Mr. Chopra's death or disability. The bonus is recorded in the financial statements over the remaining term of the employment agreement and is included in other long-term liabilities.

Product Warranties

We offer our customers warranties on many of the products that we sell. 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, we record a provision for estimated warranty expenses with a corresponding increase in cost of goods sold. We periodically adjust this provision based on historical experience and anticipated expenses. We charge actual expenses of repairs under warranty, including parts and labor, to this provision when incurred. The current obligation for warranty provision is included in other accrued expenses and current liabilities and the noncurrent portion is included in other long-term liabilities in the consolidated balance sheets.

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


	Six Months Ended December 31,
	2018		2019
Balance at beginning of period	$	21,819	$	21,724
Additions and adjustments		3,975		4,759
Reductions for warranty repair costs		(3,842)		(4,757)
Balance at end of period	$	21,952	$	21,726

Legal Proceedings

In December 2017, a short seller released a report regarding our compliance with the FCPA. Following that report, we and certain of our executive officers have been named as defendants in several lawsuits in the United States District Court for the Central District of California (the "District Court") that were filed in December 2017 and February 2018. Each of the complaints closely tracks the allegations set forth in the short seller's report. All of the actions, which were consolidated by the District Court in March 2018 in an action captioned Arkansas Teacher Retirement System et al. v. OSI Systems, Inc. et al., No. 17 cv 08841, allege violations of Sections 10(b) and 20(a) of the Exchange Act, relating to certain of our public statements and filings with the SEC, and seek damages and other relief based upon the allegations in the complaints. In April 2018 and March 2019, two shareholder derivative complaints were filed purportedly on behalf of the Company against certain members of our Board of Directors (as individual defendants), a former member of our Board of Directors, and a member of management. The derivative actions, which were consolidated by the District Court in November 2019 in an action captioned Kocen and Riley v. Chopra, et al. No. 18 CV 03371, allege, among other things, breach of fiduciary duties relating to the allegations contained in the above-mentioned short seller report and seek damages, restitution, injunctive relief, attorneys' and experts' fees, costs, expenses, and other unspecified relief. We believe that the actions are without merit and intend to defend them vigorously, and we expect to incur costs

associated with defending against these actions. At this early stage of the litigations, the ultimate outcomes are uncertain and we cannot reasonably predict the timing or outcomes, or estimate the amount of loss, if any, or their effect, if any, on our financial statements.

The SEC and the U.S. Department of Justice (“DOJ”) are conducting an investigation of trading in our securities and have each subpoenaed information regarding trading by executives, directors, and employees, as well as our operations and disclosures in and around the time of certain trades. With respect to these trading related matters, in fiscal year 2018, we took action with respect to a senior level employee. At this time, we are unable to predict what, if any, action may be taken by the DOJ or SEC as a result of these trading related investigations, or any penalties or remedial measures these agencies may seek. We place a high priority on compliance with our anticorruption and securities trading policies and are cooperating with each of the government investigations.

We are involved in various other claims and legal proceedings arising in the ordinary course of business. In our opinion after consultation with legal counsel, the ultimate disposition of such proceedings is not likely to have a material adverse effect on our business, financial condition, results of operations or cash flows. We have not accrued for loss contingencies relating to any such matters because we believe that, although unfavorable outcomes in the proceedings are 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 our company, the impact on our business, financial condition, results of operations and cash flows could be material.

Segment Information

6 Months Ended

Dec. 31, 2019

Segment Information

Segment Information

11. Segment Information

We have determined that we operate in three identifiable industry segments: (a) security and inspection systems (Security division), (b) medical monitoring and diagnostic cardiology systems (Healthcare division) and (c) optoelectronic devices and manufacturing (Optoelectronics and Manufacturing division). We also have 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 industry segments. Both the Security and Healthcare divisions comprise primarily end-product businesses whereas the Optoelectronics and Manufacturing division primarily supplies components and subsystems to external OEM customers, as well as 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, 2019.

The following tables set forth the results of operations and identifiable assets by industry segment (in thousands):


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Revenues (1) —by Segment:
Security division	$	188,684	$	202,437	$	358,644	$	391,401
Healthcare division		51,559		41,992		89,832		82,200
Optoelectronics and Manufacturing division, including intersegment revenues		72,019		72,806		142,973		146,444
Intersegment revenues elimination		(9,057)		(11,893)		(21,995)		(23,851)
Total	$	303,205	$	305,342	$	569,454	$	596,194

Income (loss) from operations —by Segment:
Security division	$	26,063	$	28,562	$	49,113	$	48,880
Healthcare division		2,209		1,294		334		4,111
Optoelectronics and Manufacturing division		8,067		9,018		14,892		17,787
Corporate		(4,560)		(6,080)		(15,911)		(13,417)
Eliminations (2)		(72)		125		(464)		445
Total	$	31,707	$	32,919	$	47,964	$	57,806


	June 30,		December 31,
	2019		2019
Assets (3) —by Segment:
Security division	$	793,810	$	815,336
Healthcare division		157,639		193,617
Optoelectronics and Manufacturing division		237,851		241,321
Corporate		79,498		93,612
Eliminations (2)		(3,934)		(41,960)
Total	$	1,264,864	$	1,301,926

(1)For each of the three and six month periods ended December 31, 2018 and December 31, 2019, no customer accounted for greater than 10% of total net revenues.

(2)Eliminations within operating income primarily reflect the change in the elimination of intercompany profit in inventory not-yet-realized and intercompany operating lease expense under ASC 842. Eliminations in assets reflect the amount of intercompany profits in inventory and intercompany ROU assets under ASC 842 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.

(3)One customer accounted for 14% of accounts receivable, net as of December 31, 2019.

Basis of Presentation (Policies)

6 Months Ended

Dec. 31, 2019

Basis of Presentation

Description of Business

Description of Business

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Earnings Per Share Computations

Earnings 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 December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Net income available to common stockholders	$	19,107	$	20,986	$	28,509	$	41,729

Weighted average shares outstanding—basic		18,085		18,312		18,088		18,285
Dilutive effect of equity awards		539		370		591		498
Weighted average shares outstanding—diluted		18,624		18,682		18,679		18,783

Basic earnings per share	$	1.06	$	1.15	$	1.58	$	2.28
Diluted earnings per share	$	1.03	$	1.12	$	1.53	$	2.22

Shares excluded from diluted earnings per share due to their anti-dilutive effect		126		94		81		85

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid investments with maturities of three months or less as of the acquisition date to be cash equivalents.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The fair values of our financial assets and liabilities are categorized as follows (in thousands):


	June 30, 2019								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Insurance company contracts	$	—	$	35,899	$	—	$	35,889	$	—	$	38,625	$	—	$	38,625
Liabilities:
Contingent consideration	$	—	$	—	$	16,577	$	16,577	$	—	$	—	$	16,671	$	16,671

Goodwill Impairment

Goodwill Impairment

Revenue Recognition

Revenue Recognition

The table below shows the balance of our contract assets and liabilities as of June 30, 2019 and December 31, 2019, including the change between the periods (in thousands):


	June 30,		December 31,
Contract Assets:	2019		2019		Change		% Change
Unbilled revenue	$	19,287	$	31,985	$	12,698	66	%


Contract Liabilities:
Advances from customers	$	43,227	$	32,640	$	(10,587)	(24)	%
Deferred revenue—current		33,641		30,171		(3,470)	(10)	%
Deferred revenue—long-term		9,506		8,351		(1,155)	(12)	%

Lease Accounting

Lease Accounting

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


	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Operating lease cost	$	2,597	$	5,246
Variable lease cost		176		314
Short-term lease cost		186		395
	$	2,959	$	5,955

Supplemental balance sheet assets and liabilities related to operating leases were as follows (in thousands):


	Balance Sheet Category	December 31, 2019
Operating lease ROU assets, net	Other assets	$	26,897

Operating lease liabilities, current portion	Other accrued expenses and current liabilities	$	8,159
Operating lease liabilities, long-term	Other long-term liabilities		19,084
Total operating lease liabilities		$	27,243

Weighted average remaining lease term			4.5 years
Weighted average discount rate			4.4%

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


	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Cash paid for operating lease liabilities	$	2,625	$	5,198
ROU assets obtained in exchange for new lease obligations		165		1,479

Maturities of operating lease liabilities under ASC 842 (defined below) at December 31, 2019 were as follows (in thousands):


	December 31, 2019
Less than one year	$	9,109
1 – 2 years		7,024
2 – 3 years		4,499
3 – 4 years		3,301
4 – 5 years		2,539
Thereafter		3,594
		30,066
Less: Imputed interest		(2,823)
Total lease liabilities	$	27,243

Maturities of minimum operating lease liabilities under non-cancelable leases under ASC 840 (defined below) at June 30, 2019 were as follows (in thousands):


	June 30, 2019
Less than one year	$	9,802
1 – 2 years		8,082
2 – 3 years		5,473
3 – 4 years		3,397
4 – 5 years		2,954
Thereafter		4,583
Total lease liabilities	$	34,291

Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncement

Leases

The cumulative effect of the changes made to our July 1, 2019 consolidated condensed balance sheet for the adoption of the new lease standard was as follows (in thousands):


	Balance at		Effect of Adoption		Balance at
Balance Sheet	June 30, 2019		of ASC 842		July 1, 2019
Assets
Other assets	$	56,518	$	30,066	$	86,584
Liabilities
Other accrued expenses and current liabilities	$	112,956	$	8,324	$	121,280
Other long-term liabilities		65,398		21,742		87,140

Recently Issued Accounting Pronouncements Not Yet Adopted

Income Taxes

Retirement Benefit Plans

Intangibles

Basis of Presentation (Tables)

6 Months Ended

Dec. 31, 2019

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 December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Net income available to common stockholders	$	19,107	$	20,986	$	28,509	$	41,729

Weighted average shares outstanding—basic		18,085		18,312		18,088		18,285
Dilutive effect of equity awards		539		370		591		498
Weighted average shares outstanding—diluted		18,624		18,682		18,679		18,783

Basic earnings per share	$	1.06	$	1.15	$	1.58	$	2.28
Diluted earnings per share	$	1.03	$	1.12	$	1.53	$	2.22

Shares excluded from diluted earnings per share due to their anti-dilutive effect		126		94		81		85

Summary of fair values of financial assets and liabilities

The fair values of our financial assets and liabilities are categorized as follows (in thousands):


	June 30, 2019								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Insurance company contracts	$	—	$	35,899	$	—	$	35,889	$	—	$	38,625	$	—	$	38,625
Liabilities:
Contingent consideration	$	—	$	—	$	16,577	$	16,577	$	—	$	—	$	16,671	$	16,671

Schedule of contract assets and contract liabilities

The table below shows the balance of our contract assets and liabilities as of June 30, 2019 and December 31, 2019, including the change between the periods (in thousands):


	June 30,		December 31,
Contract Assets:	2019		2019		Change		% Change
Unbilled revenue	$	19,287	$	31,985	$	12,698	66	%


Contract Liabilities:
Advances from customers	$	43,227	$	32,640	$	(10,587)	(24)	%
Deferred revenue—current		33,641		30,171		(3,470)	(10)	%
Deferred revenue—long-term		9,506		8,351		(1,155)	(12)	%

Schedule of components of operating lease expense

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


	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Operating lease cost	$	2,597	$	5,246
Variable lease cost		176		314
Short-term lease cost		186		395
	$	2,959	$	5,955

Schedule of supplemental balance sheet assets and liabilities related to operating leases

Supplemental balance sheet assets and liabilities related to operating leases were as follows (in thousands):


	Balance Sheet Category	December 31, 2019
Operating lease ROU assets, net	Other assets	$	26,897

Operating lease liabilities, current portion	Other accrued expenses and current liabilities	$	8,159
Operating lease liabilities, long-term	Other long-term liabilities		19,084
Total operating lease liabilities		$	27,243

Weighted average remaining lease term			4.5 years
Weighted average discount rate			4.4%

Schedule of supplemental cash flow information related to operating leases

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


	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Cash paid for operating lease liabilities	$	2,625	$	5,198
ROU assets obtained in exchange for new lease obligations		165		1,479

Schedule of maturities of operating lease liabilities

Maturities of operating lease liabilities under ASC 842 (defined below) at December 31, 2019 were as follows (in thousands):


	December 31, 2019
Less than one year	$	9,109
1 – 2 years		7,024
2 – 3 years		4,499
3 – 4 years		3,301
4 – 5 years		2,539
Thereafter		3,594
		30,066
Less: Imputed interest		(2,823)
Total lease liabilities	$	27,243

Maturities of minimum operating lease liabilities under non-cancelable leases under ASC 840 (defined below) at June 30, 2019 were as follows (in thousands):


	June 30, 2019
Less than one year	$	9,802
1 – 2 years		8,082
2 – 3 years		5,473
3 – 4 years		3,397
4 – 5 years		2,954
Thereafter		4,583
Total lease liabilities	$	34,291

Schedule of cumulative effect of the changes made to consolidated condensed balance sheet for the adoption of the new lease standard

The cumulative effect of the changes made to our July 1, 2019 consolidated condensed balance sheet for the adoption of the new lease standard was as follows (in thousands):


	Balance at		Effect of Adoption		Balance at
Balance Sheet	June 30, 2019		of ASC 842		July 1, 2019
Assets
Other assets	$	56,518	$	30,066	$	86,584
Liabilities
Other accrued expenses and current liabilities	$	112,956	$	8,324	$	121,280
Other long-term liabilities		65,398		21,742		87,140

Balance Sheet Details (Tables)

6 Months Ended

Dec. 31, 2019

Balance Sheet Details

Schedule of selected balance sheet accounts

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


	June 30,		December 31,
Accounts receivable, net	2019		2019
Accounts receivable	$	253,504	$	272,285
Less allowance for doubtful accounts		(15,064)		(14,900)
Total	$	238,440	$	257,385

	June 30,		December 31,
Inventories	2019		2019
Raw materials	$	143,697	$	138,915
Work-in-process		67,897		65,458
Finished goods		62,117		48,162
Total	$	273,711	$	252,535


	June 30,		December 31,
Property and equipment, net	2019		2019
Land	$	16,564	$	16,569
Buildings, civil works and improvements		55,391		55,747
Leasehold improvements		8,311		8,734
Equipment and tooling		128,428		135,858
Furniture and fixtures		3,190		2,953
Computer equipment		18,733		19,454
Computer software		20,146		20,140
Computer software implementation in process		8,563		10,156
Construction in process		5,760		6,400
Total		265,086		276,011
Less accumulated depreciation and amortization		(137,701)		(146,423)
Property and equipment, net	$	127,385	$	129,588

Goodwill and Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets

Schedule of changes in carrying amount of goodwill

The changes in the carrying value of goodwill by segment for the six-month period ended December 31, 2019 are as follows (in thousands):


					Optoelectronics
					and
	Security		Healthcare		Manufacturing
	Division		Division		Division		Consolidated
Balance as of June 30, 2019	$	200,079	$	40,064	$	66,965	$	307,108
Goodwill adjusted during the period		1,843		—		—		1,843
Foreign currency translation adjustment		(116)		90		504		478
Balance as of December 31, 2019	$	201,806	$	40,154	$	67,469	$	309,429

Schedule of intangible assets

Intangible assets consisted of the following (in thousands):


		June 30, 2019						December 31, 2019
	Weighted	Gross						Gross
	Average	Carrying		Accumulated		Intangibles		Carrying		Accumulated		Intangibles
	Lives	Value		Amortization		Net		Value		Amortization		Net
Amortizable assets:
Software development costs	8 years	$	29,393	$	(12,747)	$	16,646	$	32,584	$	(14,761)	$	17,823
Patents	19 years		8,688		(1,927)		6,761		9,288		(2,138)		7,150
Developed technology	10 years		53,460		(14,050)		39,410		53,464		(16,780)		36,684
Customer relationships/backlog	7 years		63,101		(22,132)		40,969		62,767		(26,217)		36,550
Total amortizable assets			154,642		(50,856)		103,786		158,103		(59,896)		98,207
Non-amortizable assets:
IPR&D			2,290		—		2,290		2,288		—		2,288
Trademarks			26,878		—		26,878		26,969		—		26,969
Total intangible assets		$	183,810	$	(50,856)	$	132,954	$	187,360	$	(59,896)	$	127,464

Schedule of estimated future amortization expense for intangible assets

At December 31, 2019, the estimated future amortization expense for intangible assets was as follows (in thousands):


2020 (remaining 6 months)	$	9,308
2021		17,662
2022		15,406
2023		14,104
2024		13,321
Thereafter, including assets that have not yet begun to be amortized		28,406
Total	$	98,207

Restructuring and Other Charges (Tables)

6 Months Ended

Dec. 31, 2019

Restructuring and Other Charges

Summary of restructuring and other charges (benefit), net

The following table summarizes restructuring and other charges (benefit), net for the periods set forth below (in thousands):


	Three Months Ended December 31, 2018
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	20	$	—	$	20
Employee termination costs		(46)		1,227		26		—		1,207
Facility closures/consolidation		—		2,108		—		—		2,108
Legal costs		—		—		—		(4,600)		(4,600)
Total expensed	$	(46)	$	3,335	$	46	$	(4,600)	$	(1,265)


	Three Months Ended December 31, 2019
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	—	$	—	$	—
Employee termination costs		406		—		30		—		436
Facility closures/consolidation		—		—		—		—		—
Legal costs		—		—		—		(1,365)		(1,365)
Total expensed	$	406	$	—	$	30	$	(1,365)	$	(929)


	Six Months Ended December 31, 2018
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	287	$	—	$	287
Employee termination costs		—		1,418		133		—		1,551
Facility closures/consolidation		—		2,108		—		—		2,108
Legal costs		—		—		—		(1,015)		(1,015)
Total expensed	$	—	$	3,526	$	420	$	(1,015)	$	2,931


	Six Months Ended December 31, 2019
					Optoelectronics and
			Healthcare		Manufacturing
	Security Division		Division		Division		Corporate		Total
Acquisition-related costs	$	—	$	—	$	—	$	—	$	—
Employee termination costs		406		—		17		71		494
Facility closures/consolidation		—		—		—		—		—
Legal costs		—		—		—		(3,522)		(3,522)
Total expensed	$	406	$	—	$	17	$	(3,451)	$	(3,028)

Summary of changes in the accrued liability for restructuring and other charges

The changes in the accrued liability for restructuring and other charges for the six-month period ended December 31, 2019 were as follows (in thousands):


	Employee
	Termination		Legal Costs and
	Costs		Settlements		Total
Balance as of June 30, 2019	$	432	$	6,331	$	6,763
Restructuring and other charges (benefit), net		494		(3,522)		(3,028)
(Payments), adjustments and reimbursements, net		(893)		1,527		634
Balance as of December 31, 2019	$	33	$	4,336	$	4,369

Borrowings (Tables)

6 Months Ended

Dec. 31, 2019

Borrowings

Schedule of long-term debt

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


	June 30,		December 31,
	2019		2019
1.25% convertible notes due 2022:
Principal amount	$	287,500	$	287,500
Unamortized discount		(27,283)		(23,225)
Unamortized debt issuance costs		(3,722)		(3,134)
		256,495		261,141
Other long-term debt		2,061		2,022
		258,556		263,163
Less current portion of long-term debt		(804)		(837)
Long-term portion of debt	$	257,752	$	262,326

- 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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Stockholders' Equity (Tables)

6 Months Ended

Dec. 31, 2019

Stockholders' Equity

Schedule of stock-based compensation expense in the consolidated statements of operations

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Cost of goods sold	$	150	$	156	$	356	$	328
Selling, general and administrative		7,833		5,548		12,945		11,633
Research and development		180		140		325		299
Stock-based compensation expense	$	8,163	$	5,844	$	13,626	$	12,260

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, 2019	515,884	$	33.74
Granted	—		—
Exercised	(199,962)		20.16
Expired or forfeited	(941)		84.93
Outstanding at December 31, 2019	314,981		42.20	2.6 years	$	18,438
Exercisable at December 31, 2019	296,566		39.98	2.3 years		18,019

Summary of RSU award activity


		Weighted-
		Average
	Shares	Fair Value
Nonvested at June 30, 2019	521,140	$	73.97
Granted	278,060		87.19
Vested	(387,085)		68.56
Forfeited	(8,235)		81.90
Nonvested at December 31, 2019	403,880		88.09

Retirement Benefit Plans (Tables)

6 Months Ended

Dec. 31, 2019

Retirement Benefit Plans

Schedule of net periodic pension expense


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Service cost	$	98	$	100	$	196	$	200
Interest cost		8		8		16		16
Amortization of prior service cost		14		13		28		26
Net periodic pension expense	$	120	$	121	$	240	$	242

Commitments and Contingencies (Tables)

6 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Schedule of roll-forward of the contingent consideration liability


Beginning fair value, June 30, 2019	$	16,577
Addition of contingent earnout obligations		—
Foreign currency translation adjustment		137
Changes in fair value for contingent earnout obligations		(43)
Payments on contingent earnout obligations		—
Ending fair value, December 31, 2019	$	16,671

Schedule of changes in warranty provisions

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


	Six Months Ended December 31,
	2018		2019
Balance at beginning of period	$	21,819	$	21,724
Additions and adjustments		3,975		4,759
Reductions for warranty repair costs		(3,842)		(4,757)
Balance at end of period	$	21,952	$	21,726

Segment Information (Tables)

6 Months Ended

Dec. 31, 2019

Segment Information

Schedule of results of operations and identifiable assets by industry segment

The following tables set forth the results of operations and identifiable assets by industry segment (in thousands):


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2019		2018		2019
Revenues (1) —by Segment:
Security division	$	188,684	$	202,437	$	358,644	$	391,401
Healthcare division		51,559		41,992		89,832		82,200
Optoelectronics and Manufacturing division, including intersegment revenues		72,019		72,806		142,973		146,444
Intersegment revenues elimination		(9,057)		(11,893)		(21,995)		(23,851)
Total	$	303,205	$	305,342	$	569,454	$	596,194

Income (loss) from operations —by Segment:
Security division	$	26,063	$	28,562	$	49,113	$	48,880
Healthcare division		2,209		1,294		334		4,111
Optoelectronics and Manufacturing division		8,067		9,018		14,892		17,787
Corporate		(4,560)		(6,080)		(15,911)		(13,417)
Eliminations (2)		(72)		125		(464)		445
Total	$	31,707	$	32,919	$	47,964	$	57,806


	June 30,		December 31,
	2019		2019
Assets (3) —by Segment:
Security division	$	793,810	$	815,336
Healthcare division		157,639		193,617
Optoelectronics and Manufacturing division		237,851		241,321
Corporate		79,498		93,612
Eliminations (2)		(3,934)		(41,960)
Total	$	1,264,864	$	1,301,926

(1)For each of the three and six month periods ended December 31, 2018 and December 31, 2019, no customer accounted for greater than 10% of total net revenues.

(3)One customer accounted for 14% of accounts receivable, net as of December 31, 2019.

Basis of Presentation - Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Feb. 28, 2017
Computation of basic and diluted earnings per share
Net income available to common stockholders	$ 20,986	$ 19,107	$ 41,729	$ 28,509
Weighted average shares outstanding-basic	18,312	18,085	18,285	18,088
Dilutive effect of equity awards	370	539	498	591
Dilutive effect of the Notes				0
Weighted average shares outstanding-diluted	18,682	18,624	18,783	18,679
Basic earnings per share	$ 1.15	$ 1.06	$ 2.28	$ 1.58
Diluted earnings per share	$ 1.12	$ 1.03	$ 2.22	$ 1.53
Weighted average shares excluded from diluted earnings (loss) per share due to their anti-dilutive effect (in thousands)	94	126	85	81
1.25% Convertible Senior Notes Due 2022
Per Share Computations
Interest rate (as a percentage)	1.25%		1.25%		1.25%

Basis of Presentation - Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jun. 30, 2019
Fair Value of Financial Instruments
Liabilities-contingent consideration	$ 16,671	$ 16,577
Recurring
Fair Value of Financial Instruments
Insurance company contracts	38,625	35,889
Liabilities-contingent consideration	16,671	16,577
Recurring \| Level 2
Fair Value of Financial Instruments
Insurance company contracts	38,625	35,899
Recurring \| Level 3
Fair Value of Financial Instruments
Total assets	0	0
Liabilities-contingent consideration	$ 16,671	$ 16,577

Basis of Presentation - Revenue Recognition (Detail) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Contract Assets
Unbilled revenue	$ 31,985	$ 19,287
Contract Liabilities
Advances from customers	32,640	43,227
Deferred revenue - current	30,171	33,641
Deferred revenue - long-term	8,351	$ 9,506
Remaining Performance Obligations
Revenue remaining performance obligation	189,200
Recognized revenue from contract liabilities	$ 52,200
Revenue, Practical Expedient, Financing Component [true false]	true
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Remaining Performance Obligations
Remaining performance obligation expected timing of satisfaction period	12 months
Remaining performance obligation expected percentage recognized	51.00%
ASU 2014-09 \| Effect of Change
Contract Assets
Unbilled revenue	$ 12,698
Percentage of change in unbilled revenue	66.00%
Contract Liabilities
Advances from customers	$ (10,587)
Deferred revenue - current	(3,470)
Deferred revenue - long-term	$ (1,155)
Percentage of of change in customer deposits and prepayments	(24.00%)
Percentage of change deferred revenue current	(10.00%)
Percentage of change deferred revenue noncurrent	(12.00%)

Basis of Presentation - Lease Accounting Policy (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2019	Jun. 30, 2019
Basis of Presentation
Lease, Practical Expedients, Package [true false]		true
Lease, Practical Expedient, Use of Hindsight [true false]		true
Lessee, operating lease, term of contract	12 months	12 months
Operating lease expense
Operating lease cost	$ 2,597	$ 5,246
Variable lease cost	176	314
Short-term lease cost	186	395
Operating lease expense	2,959	5,955
Balance sheet assets and liabilities related to operating leases
Operating lease ROU assets, net	$ 26,897	$ 26,897
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent.	Other Assets, Noncurrent.
Operating lease liabilities, current portion	$ 8,159	$ 8,159
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current	Other Liabilities, Current
Operating lease liabilities, long-term	$ 19,084	$ 19,084
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Total lease liabilities	$ 27,243	$ 27,243
Weighted average remaining lease term	4 years 6 months	4 years 6 months
Weighted average discount rate	4.40%	4.40%
Cash flow information related to operating leases
Cash paid for operating lease liabilities	$ 2,625	$ 5,198
ROU assets obtained in exchange for new lease obligations	165	1,479
Maturities of operating lease liabilities
Less than one year	9,109	9,109
1 - 2 years	7,024	7,024
2 - 3 years	4,499	4,499
3 - 4 years	3,301	3,301
4 - 5 years	2,539	2,539
Thereafter	3,594	3,594
Total	30,066	30,066
Less: Imputed interest	(2,823)	(2,823)
Lease liabilities	$ 27,243	$ 27,243
Maturities of minimum operating lease liabilities under non-cancelable leases
Less than one year			$ 9,802
1 - 2 years			8,082
2 - 3 years			5,473
3 - 4 years			3,397
4 - 5 years			2,954
Thereafter			4,583
Total lease liabilities			$ 34,291

Basis of Presentation - Recently Adopted Accounting Pronouncement (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jul. 01, 2019	Jun. 30, 2019
ASSETS
Other assets	$ 87,156	$ 86,584	$ 56,518
Liabilities
Other accrued expenses and current liabilities	114,930	121,280	112,956
Other long-term liabilities	$ 90,416	$ 87,140	65,398
Effect of Adoption of ASC 842
ASSETS
Other assets			30,066
Liabilities
Other accrued expenses and current liabilities			8,324
Other long-term liabilities			$ 21,742

Business Combinations - Other Business Acquisition (Details) - USD ($) $ in Millions		1 Months Ended
	Jul. 31, 2018	Aug. 31, 2018
A privately held services company
Business Combinations
Total purchase price		$ 0.8
Maximum contingent consideration		$ 5.0
Contingent consideration earnout period		5 years
Optoelectronics solutions business
Business Combinations
Total purchase price	$ 17.5
Maximum contingent consideration	$ 1.0

Balance Sheet Details (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Balance Sheet Details (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Accounts Receivable
Accounts receivable	$ 272,285		$ 272,285		$ 253,504
Less allowance for doubtful accounts	(14,900)		(14,900)		(15,064)
Total	257,385		257,385		238,440
Inventories
Raw materials	138,915		138,915		143,697
Work-in-process	65,458		65,458		67,897
Finished goods	48,162		48,162		62,117
Total	252,535		252,535		273,711
Property and equipment, net
Property and equipment, gross	276,011		276,011		265,086
Less accumulated depreciation and amortization	(146,423)		(146,423)		(137,701)
Property and equipment, net	129,588		129,588		127,385
Depreciation and amortization expense for property and equipment	5,400	$ 5,200	10,500	$ 10,300
Land
Property and equipment, net
Property and equipment, gross	16,569		16,569		16,564
Buildings, civil works and improvements
Property and equipment, net
Property and equipment, gross	55,747		55,747		55,391
Leasehold improvements
Property and equipment, net
Property and equipment, gross	8,734		8,734		8,311
Equipment and tooling
Property and equipment, net
Property and equipment, gross	135,858		135,858		128,428
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	2,953		2,953		3,190
Computer equipment
Property and equipment, net
Property and equipment, gross	19,454		19,454		18,733
Computer software
Property and equipment, net
Property and equipment, gross	20,140		20,140		20,146
Computer software implementation in process
Property and equipment, net
Property and equipment, gross	10,156		10,156		8,563
Construction in process
Property and equipment, net
Property and equipment, gross	$ 6,400		$ 6,400		$ 5,760

Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2019 USD ($)
Changes in the carrying value of goodwill
Balance at the beginning of the period	$ 307,108
Goodwill adjusted during the period	1,843
Foreign currency translation adjustment	478
Balance at the end of the period	309,429
Security Division
Changes in the carrying value of goodwill
Balance at the beginning of the period	200,079
Goodwill adjusted during the period	1,843
Foreign currency translation adjustment	(116)
Balance at the end of the period	201,806
Healthcare Division
Changes in the carrying value of goodwill
Balance at the beginning of the period	40,064
Foreign currency translation adjustment	90
Balance at the end of the period	40,154
Optoelectronics and Manufacturing Division
Changes in the carrying value of goodwill
Balance at the beginning of the period	66,965
Foreign currency translation adjustment	504
Balance at the end of the period	$ 67,469

Goodwill and Intangible Assets - Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Amortizable assets:
Gross Carrying Value	$ 158,103		$ 158,103		$ 154,642
Accumulated Amortization	(59,896)		(59,896)		(50,856)
Total	98,207		98,207		103,786
Total intangible assets
Gross Carrying Value	187,360		187,360		183,810
Intangible assets, net	127,464		127,464		132,954
Amortization expense	4,500	$ 5,600	9,400	$ 10,900
IPR&D
Non-amortizable assets:
Gross Carrying Value	2,288		2,288		2,290
Trademarks
Non-amortizable assets:
Gross Carrying Value	26,969		$ 26,969		26,878
Software development costs
Intangible assets
Weighted Average Lives (in Years)			8 years
Amortizable assets:
Gross Carrying Value	32,584		$ 32,584		29,393
Accumulated Amortization	(14,761)		(14,761)		(12,747)
Total	17,823		$ 17,823		16,646
Patents
Intangible assets
Weighted Average Lives (in Years)			19 years
Amortizable assets:
Gross Carrying Value	9,288		$ 9,288		8,688
Accumulated Amortization	(2,138)		(2,138)		(1,927)
Total	7,150		$ 7,150		6,761
Developed technology
Intangible assets
Weighted Average Lives (in Years)			10 years
Amortizable assets:
Gross Carrying Value	53,464		$ 53,464		53,460
Accumulated Amortization	(16,780)		(16,780)		(14,050)
Total	36,684		$ 36,684		39,410
Customer relationships/backlog
Intangible assets
Weighted Average Lives (in Years)			7 years
Amortizable assets:
Gross Carrying Value	62,767		$ 62,767		63,101
Accumulated Amortization	(26,217)		(26,217)		(22,132)
Total	$ 36,550		$ 36,550		$ 40,969

Goodwill and Intangible Assets - Intangible Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Estimated future amortization expense
2019 (remaining 3 months)	$ 9,308		$ 9,308
2021	17,662		17,662
2022	15,406		15,406
2023	14,104		14,104
2024	13,321		13,321
Thereafter, including assets that have not yet begun to be amortized	28,406		28,406
Total	98,207		98,207		$ 103,786
Software development costs
Estimated future amortization expense
Total	17,823		17,823		$ 16,646
Capitalized software development costs	$ 1,900	$ 600	$ 3,200	$ 1,000

Restructuring and Other Charges - Restructuring and other charges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Restructuring and other charges
Restructuring and other charges (benefit), net	$ (900)		$ (3,028)
Acquisition-related costs		$ 20		$ 287
Employee termination costs (benefit)	436	1,207	494	1,551
Facility closures / consolidation		2,108		2,108
Legal costs (benefit), net	(1,365)	(4,600)	(3,522)	(1,015)
Total expensed (benefit)	(929)	(1,265)	(3,028)	2,931
Security Division
Restructuring and other charges
Employee termination costs (benefit)	406	(46)	406
Total expensed (benefit)	406	(46)	406
Healthcare Division
Restructuring and other charges
Employee termination costs (benefit)		1,227		1,418
Facility closures / consolidation		2,108		2,108
Total expensed (benefit)		3,335		3,526
Optoelectronics and Manufacturing Division
Restructuring and other charges
Acquisition-related costs		20		287
Employee termination costs (benefit)	30	26	17	133
Total expensed (benefit)	30	46	17	420
Corporate
Restructuring and other charges
Employee termination costs (benefit)			71
Legal costs (benefit), net	(1,365)	(4,600)	(3,522)	(1,015)
Total expensed (benefit)	$ (1,365)	$ (4,600)	$ (3,451)	$ (1,015)

Restructuring and Other Charges - Changes in the accrued liability for restructuring and other charges (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2019
Restructuring and other charges
Balance at the beginning of the period		$ 6,763
Restructuring and other charges (benefit), net	$ (900)	(3,028)
(Payments), adjustments and reimbursements, net		634
Balance at the end of the period	4,369	4,369
Employee Termination Costs
Restructuring and other charges
Balance at the beginning of the period		432
Restructuring and other charges (benefit), net		494
(Payments), adjustments and reimbursements, net		(893)
Balance at the end of the period	33	33
Legal Costs and Settlements
Restructuring and other charges
Balance at the beginning of the period		6,331
Restructuring and other charges (benefit), net		(3,522)
(Payments), adjustments and reimbursements, net		1,527
Balance at the end of the period	$ 4,336	$ 4,336

Borrowings (Details) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
Borrowings (Details) $ / shares in Units, $ in Thousands	Dec. 31, 2019 USD ($) item $ / shares	Dec. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) item $ / shares	Dec. 31, 2018 USD ($)	Jun. 30, 2019 USD ($)	Feb. 28, 2017 USD ($)
Borrowings
Borrowings outstanding	$ 91,000		$ 91,000		$ 88,000
Number of consecutive trading days \| item	30
Components of long-term debt
Other long-term debt	$ 2,022		2,022		2,061
Total	263,163		263,163		258,556
Less current portion of long-term debt	(837)		(837)		(804)
Long-term portion of debt	262,326		262,326		257,752
Revolving Credit Facility
Borrowings
Maximum borrowing capacity	535,000		535,000
Sub-limit available for letters of credit	300,000		$ 300,000
Unused commitment fee (as a percent)			0.10%
Borrowings outstanding	91,000		$ 91,000
Amount outstanding under letters of credit	53,700		53,700
Available credit facility	390,300		$ 390,300
Revolving Credit Facility \| Minimum
Borrowings
Unused commitment fee (as a percent)			0.10%
Revolving Credit Facility \| Maximum
Borrowings
Increase in the credit agreement's borrowing capacity available under certain circumstances	250,000		$ 250,000
Unused commitment fee (as a percent)			0.25%
Revolving Credit Facility \| LIBOR
Borrowings
Interest rate margin (as a percent)			1.00%
Revolving Credit Facility \| LIBOR \| Minimum
Borrowings
Interest rate margin (as a percent)			1.00%
Revolving Credit Facility \| LIBOR \| Maximum
Borrowings
Interest rate margin (as a percent)			1.75%
1.25% Convertible Senior Notes Due 2022
Borrowings
Principal amount	$ 287,500		$ 287,500			$ 287,500
Interest rate (as a percentage)	1.25%		1.25%			1.25%
Conversion ratio			9.3056
Conversion price \| $ / shares	$ 107.46		$ 107.46
Premium on stock price	38.50%		38.50%
Threshold percentage of stock price	130.00%		130.00%
Number of trading days \| item	20		20
Number of consecutive trading days \| item			30
Principal amount of the notes to be repurchased (as a percentage)			100.00%
Liability component of convertible debt	$ 242,400		$ 242,400
Equity component of convertible debt	45,100		45,100
Debt issuance costs	7,700		7,700
Debt Component of debt issuance costs	6,500		6,500
Equity component of debt issuance costs	1,200		1,200
Total interest expense	3,200	$ 3,200	6,400	$ 6,300
Contractual interest expense	900	900	1,800	1,800
Amortization of debt discount	2,000	2,000	4,000	3,900
Amortization of debt issuance costs	300	$ 300	600	$ 600
Unamortized discount	$ (23,225)		$ (23,225)		(27,283)
Effective interest rate (as a percent)	4.50%		4.50%
Unamortized debt issuance costs	$ 3,134		$ 3,134		3,722
Components of long-term debt
Principal amount	287,500		287,500		287,500
Unamortized discount	(23,225)		(23,225)		(27,283)
Unamortized debt issuance costs	(3,134)		(3,134)		(3,722)
Total	261,141		261,141		$ 256,495
Bank lines of credit
Borrowings
Amount outstanding under letters of credit	49,800		49,800
Available credit facility	$ 18,600		$ 18,600

Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Stock-based Compensation
Stock-based compensation expense	$ 5,844	$ 8,163	$ 12,260	$ 13,626
RSU
Stock-based Compensation
Unrecognized compensation cost	$ 22,800		$ 22,800
Weighted-average period			1 year 8 months 12 days
Shares
Nonvested at the beginning of the period (in shares)			521,140
Granted (in shares)			278,060
Vested (in shares)			(387,085)
Forfeited (in shares)			(8,235)
Nonvested at the end of the period (in shares)	403,880		403,880
Weighted-Average Fair Value
Nonvested at the beginning of the period (in dollars per share)			$ 73.97
Granted (in dollars per share)			87.19
Vested (in dollars per share)			68.56
Forfeited (in dollars per share)			81.90
Nonvested at the end of the period (in dollars per share)	$ 88.09		$ 88.09
Stock options
Stock-based Compensation
Unrecognized compensation cost	$ 300		$ 300
Weighted-average period			1 year 7 months 6 days
Number of Options
Outstanding at the beginning of the period (in shares)			515,884
Exercised (in shares)			(199,962)
Expired or forfeited (in shares)			(941)
Outstanding at the end of the period (in shares)	314,981		314,981
Exercisable at the end of the period (in shares)	296,566		296,566
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)			$ 33.74
Exercised (in dollars per share)			20.16
Expired or forfeited (in dollars per share)			84.93
Outstanding at the end of the period (in dollars per share)	$ 42.20		42.20
Exercisable at the end of the period (in dollars per share)	$ 39.98		$ 39.98
Weighted-Average Remaining Contractual Term
Outstanding at the end of the period			2 years 7 months 6 days
Exercisable at the end of the period			2 years 3 months 18 days
Aggregate Intrinsic Value
Outstanding at the end of the period	$ 18,438		$ 18,438
Exercisable at the end of the period	$ 18,019		$ 18,019
Performance-based restricted stock units
Shares
Granted (in shares)			81,621	97,514
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			280.00%
2012 Plan
Weighted-Average Fair Value
Shares available for grant	1,100,000		1,100,000
2012 Plan \| 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
2006 Plan
Number of Options
Granted (in shares)			0
Cost of goods sold
Stock-based Compensation
Stock-based compensation expense	$ 156	150	$ 328	$ 356
Selling, general and administrative
Stock-based Compensation
Stock-based compensation expense	5,548	7,833	11,633	12,945
Research and development
Stock-based Compensation
Stock-based compensation expense	$ 140	$ 180	$ 299	$ 325

Stockholders' Equity - Share Repurchase Program (Details) - Common stock - shares	6 Months Ended
	Dec. 31, 2019	Mar. 31, 2018
Share Repurchase Program
Number of shares repurchased	266,874
Number of available for additional shares repurchased	295,833
Maximum
Share Repurchase Program
Number of repurchased shares authorized		1,000,000

Retirement Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Retirement Benefit Plans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Net Periodic Benefit Costs
Service cost	$ 100	$ 98	$ 200	$ 196
Interest cost	8	8	16	16
Amortization of prior service cost	13	14	26	28
Net periodic pension expense	121	120	242	240
Contributions made by the entity to the defined benefit plans	0	1,000	0	1,000
Contributions made by the entity to defined contribution plans	$ 1,400	$ 1,300	$ 3,200	$ 3,100

Commitments and Contingencies - Contingent Acquisition Obligations (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Contingent Acquisition Obligations
Beginning fair value				$ 16,577
Foreign currency translation adjustment				137
Changes in fair value for contingent earnout obligations				(43)
Ending fair value		$ 16,671		16,671
Mr. Chopra, Chief Executive Officer \| Deferred bonus
Indemnifications and Certain Employment-Related Contingencies
Bonus payment on or within 45 days of January 1, 2024 contingent upon continued employment through that date	$ 13,500
Maximum number of days after January 1, 2024, bonus payment due	45 days
CXR Limited
Contingent Acquisition Obligations
Remaining maximum amount of contingent consideration		26,200		26,200
Payments for contingent consideration		$ 1,100	$ 1,300	$ 1,200	$ 1,300

Income Taxes - (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Income Taxes - (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Effective income tax rate (as a percent)	25.30%	26.80%	13.50%	23.00%
Effective income tax rate excluding certain discrete tax items (as a percent)	27.70%	28.30%	27.80%	28.20%
ASU 2016-09
Excess tax benefits from employee stock compensation benefit	$ 0.7	$ 0.4	$ 6.9	$ 1.9

Segment Information - Operations and Identifiable Assets (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) customer segment	Dec. 31, 2018 USD ($) customer	Jun. 30, 2019 USD ($)
Operations and identifiable assets by industry segment
Number of identifiable industry segments \| segment			3
Total revenues	$ 305,342	$ 303,205	$ 596,194	$ 569,454
Income (Loss) from Operations	32,919	31,707	57,806	$ 47,964
Segments assets	1,301,926		$ 1,301,926		$ 1,264,864
Revenue \| Customer Concentration Risk
Operations and identifiable assets by industry segment
Number of major customers \| customer			0	0
Accounts receivable \| Customer Concentration Risk
Operations and identifiable assets by industry segment
Number of major customers \| customer			1
Concentration (as a percent)			14.00%
Servicio de Administaction Tributaria ("SAT") in Mexico \| Revenue \| Customer Concentration Risk
Operations and identifiable assets by industry segment
Concentration (as a percent)			10.00%	10.00%
Operating Segments \| Security Division
Operations and identifiable assets by industry segment
Total revenues	202,437	188,684	$ 391,401	$ 358,644
Income (Loss) from Operations	28,562	26,063	48,880	49,113
Segments assets	815,336		815,336		793,810
Operating Segments \| Healthcare Division
Operations and identifiable assets by industry segment
Total revenues	41,992	51,559	82,200	89,832
Income (Loss) from Operations	1,294	2,209	4,111	334
Segments assets	193,617		193,617		157,639
Operating Segments \| Optoelectronics and Manufacturing Division
Operations and identifiable assets by industry segment
Total revenues	72,806	72,019	146,444	142,973
Income (Loss) from Operations	9,018	8,067	17,787	14,892
Segments assets	241,321		241,321		237,851
Corporate
Operations and identifiable assets by industry segment
Income (Loss) from Operations	(6,080)	(4,560)	(13,417)	(15,911)
Segments assets	93,612		93,612		79,498
Eliminations
Operations and identifiable assets by industry segment
Total revenues	(11,893)	(9,057)	(23,851)	(21,995)
Income (Loss) from Operations	125	$ (72)	445	$ (464)
Segments assets	$ (41,960)		$ (41,960)		$ (3,934)

Basis of Presentation - Description of Business (Details)	6 Months Ended
	Dec. 31, 2019 segment
Description of Business
Number of reporting segments	3

Basis of Presentation - Cash Equivalents (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Cash Equivalents
Cash and cash equivalents	$ 95,056	$ 96,316
Cash, cash equivalents, and investments held by our foreign subsidiaries and subject to repatriation tax considerations(as a percentage)	82.00%

Commitments and Contingencies - Product Warranties (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Changes in provision for warranties
Warranty provision at beginning of period	$ 21,724	$ 21,819
Additions and adjustments	4,759	3,975
Reductions for warranty repair costs	(4,757)	(3,842)
Warranty provision at end of period	$ 21,726	$ 21,952