OSI Systems, Inc. (NASDAQ:OSIS) Q3 2024 Earnings Call Transcript

Christopher Glynn: Follow ups on O&M segment. I guess, the declines on the external sales aren’t that really extreme given we’re in a lead time and inventory correction period, and you sound pretty constructive going forward. I’m just curious if you could talk a little bit more about that visibility how much is tied to direct specifications? Are there any verticals like defense or medical or whatever you want to provide in terms of where you see the thrust picking back up for Opto?

Deepak Chopra: Good question. Firstly, I mean, we did say on a call, that the book-to-bill was a one for the Opto group that shows that we think there’s more stability going forward, and we’ll get back on track. Most of the segments we think are going to get back to normal with their inventory adjustment. Consumer products might be a little bit behind, especially as the budgets get passed, as the stuff keeps happening with the aid to Ukraine and Israel and stuff, the aerospace defense business will then start picking up again. We are well designed into it. The automotive industry is up there and we supply to that our medical industry though there is a lot of tension on the CapEx in the hospital market, but there is still a lot of need for what I call devices and those kind of things consumables, and we supply product for that.

So, we think overall, all the segments will do well. One of the good things we can proudly say, we are not dependent on any one segment. We are very broad segment based, and we think that overall, the business is going to start growing. Alan?

Alan Edrick: Yes, I think that, I think that’s the case. And I think you’re right Chris. The third-party sales reduction in light of some of the corrections on inventory levels from some of our customers was somewhat modest. And while that may continue a little bit more into Q4, we do expect to see a nice sequential improvement in revenues overall, and we are seeing that across the spectrum. We’re quite diversified between industrial, medical, defense, automotive, technology companies like Deepak was mentioning. We are highly encouraged that we’ll see a nice pickup here in Q4 over Q3.

Operator: Thank you. And I’m showing no further questions at this time, and I would like to hand the conference back to Deepak Chopra for closing remarks.

Deepak Chopra: Thank you once again for attending our conference call. We look forward to speaking with you over the next year-end call in August. Thank you to everybody, our employees, and to our investors, stockholders, and our customers. Thank you very much.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.