OSI Systems (OSIS) Bank of America’s 33th Annual Industrials, Transportation and Airlines Key Leaders Conference summary

Business overview and strategy

• Operates three divisions: Security (70% of revenue), Optoelectronics (20%+), and Healthcare (under 10%).

• Security division leads global detection for aviation, ports, borders, and events.

• Optoelectronics supplies sensors and components, supporting vertical integration and margin control.

• Healthcare focuses on patient monitoring, cardiology, and recurring service revenue.

• Vertical integration is a core strategy, expanding in-house capabilities to enhance margins and supply chain control.

M&A and capital deployment

• M&A targets both strategic business needs and supply chain enhancements.

• Strong balance sheet and cash flow enable simultaneous organic and inorganic growth investments.

• Recent RF acquisition has outperformed expectations, driving significant new contract wins.

Mexico contracts and cash flow

• Secured over $800 million in Mexico contracts, fulfilled through fiscal 2027, now shifting to service revenue.

• Record backlog achieved despite converting backlog to revenue.

• Receivables from Mexico are being collected, with $70+ million received post-quarter and $170 million still past due, expected to be paid within 12 months.

• Free cash flow conversion expected to exceed 100% of net income in the coming year.