Good day, ladies and gentlemen, and welcome to the OSI Systems’ Fourth Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today’s program is being recorded. I would now like to introduce your host for today’s program, Alan Edrick, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining us. I’m Alan Edrick, Executive Vice President and CFO of OSI Systems, and I am here today with Deepak Chopra, our President and CEO. Welcome to the OSI Systems’ fourth quarter and year end fiscal 2015 conference call. We’d like to extend a special welcome to anyone who is a first-time participant on our conference calls. Earlier today, we issued a press release announcing our fourth quarter and fiscal year 2015 financial results. Before we discuss our financial and our operational highlights, I’d like to read the following statement. In connection with this conference call, the company wishes to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements during this call that may be deemed to be forward-looking statements under the Act. Forward-looking statements relate to the company's current expectations, beliefs, projections, and similar expressions, and are not guarantees of future performance or outcomes. Forward-looking statements involve uncertainties, risks, assumptions and contingencies, many of which are outside the company's control that may cause actual results or outcomes to differ materially from those described in or implied by any forward-looking statement. Such statements include without limitation, information provided regarding expected revenues and earnings in fiscal 2016 and statements regarding the expected overall financial and operational performance of the company and each of its operating divisions. The company wishes to caution participants on this call that numerous factors could cause actual results to differ materially from these forward-looking statements. These factors include the risk factors set forth in the company's last annual report on Form 10-K and other risks described in documents subsequently filed by the company with the SEC from time to time. All forward-looking statements made on this call are based on…

Thank you, Alan, and again welcome to the OSI Systems’ earnings conference call. As Alan mentioned in the fourth quarter and for the full fiscal year, we delivered a record revenues and profit. During Q4, the healthcare division’s performance stood out leading to record divisional revenues along with significant margin expansion. With strong overall OSI bookings in Q4 and thereafter, we begin fiscal 2016 with a healthy backlog and a stronger organization which we believe position us well. Throughout the year, we continue to pursue excellence in each division, with the implementation of operational, strategic and talent management initiatives. As an example, we are happy to announce that Pak Chin, a former Honeywell executive joined our team as President of Rapiscan Systems. Ajay Mehra, who led Rapiscan to strong success over a number of years, is now focused exclusively on the solutions business reflecting the importance and the priority we have on growing our turnkey business, expanding service and solutions to security customers as well as developing service offerings to other markets. Under Mr. Mehra we’ve also created a healthcare solution initiative to replicate our success in security turnkey business. Let’s talk in more detail about each business, starting with our security division. Rapiscan where revenues were $481 million for the full fiscal year or 9% higher than the prior year with a strong operating margin of 15.2% excluding the effect of restructuring and other charges. Rapiscan’s revenues in Q4 were 7% lower than the prior year due to a tough comp as prior year Q4 sales, grew 45% in part from FMS revenues that Alan Edrick will discuss later on. Excluding the prior year FMS revenues, Rapiscan’s revenues increased 10% in the fourth quarter. A few of the highlights of Rapiscan in Q4, we continued to gain momentum in…

Thank you, Deepak. We continue to deliver revenue and earnings growth by expanding our product portfolio and entering new markets while maintaining a relentless focus on further operating – to continue to expand margins. Let’s review the financial results for the fourth quarter and the fiscal year in greater detail. As mentioned before, our revenues in Q4 fiscal 2015 increased 2% over Q4 fiscal 2014, while full year revenues increased by 6%. The Q4 2015 revenue growth was driven by a 29% increase in the sales of our healthcare division, led by strong growth in North America and the inclusion of revenues from the cardiology business that we acquired in the first quarter of fiscal 2015, which contributed 8% of the quarter’s growth. In fiscal 2015, our healthcare division delivered record revenue in each of the North America and the emerging markets regions, while the European and Middle East region lags in part due to the impact of FX. Q4 sales in our Security division were strong, representing the third highest quarter on record. However with the tougher comp due to $23 million recognized in Q4 last year associated with the Foreign Military Sale to Iraq, revenues were down 7% year-over-year. For the year – for the full year, Rapiscan’s revenues were $481 million, up 9% over the prior year. And as expected, for Q4, Opto division’s external revenues were down 2%, yet the Opto division delivered significantly higher operating margin, which we will discuss later. We expect Opto to return to revenue growth as early as Q2 of fiscal 2016. Our Q4 gross margin came in at 33.5%, compared to 32.9% in Q4 of the prior year. The increase was driven by margin expansion in our healthcare division achieved primarily from economies of scale as well as margin expansion,…

[Operator Instructions] Our first question comes from the line of Jeff Martin from ROTH Capital Partners. Your question please.

Thanks. Good morning Deepak and Alan.

Good morning

Alan, could you help me just clarify the challenging comparison both in the first and fourth quarter, I have roughly $25 million between FMS and the Glasgow games challenging that the first quarter compare and $34 million for the second quarter, is that accurate?

Yes, Jeff, the numbers are directionally accurate, in the first quarter, that’s extremely close to what we reported last year for Glasgow and FMS. The FMS revenues in the second quarter of fiscal 2015 were actually a little bit higher than the number you mentioned. So that’s what contributed the comment saying the first half comparisons are little bit tougher and we are anticipating a higher growth rate in the second half of the fiscal year.

Okay, and then you anticipate growth in each of your divisions did I hear that correctly for the full year?

That is correct.

Okay. And then do you have a number for the foreign exchange impact on revenue in the quarter?

The FX impact on revenue on the quarter gave us a headwind of a couple percent in this past quarter, namely from the Euro and the pound compared to the prior year.

Okay. And then Deepak, yes, go ahead

So although there was a headwind on the top line it was not on the bottom line.

Okay, okay. And Deepak, could you go into the little bit more of an update on the pipeline for RTT in Europe?

Well as you know, that 2020 all the airports, Western European airports have to meet the new standards. So there is a lot of activity in the European airports in trying to put their plans together, together with their airport expansion plans, after replacement cycle and new additions for meeting these deadlines. So there were lot of activity and as I’d mentioned on my call that we are very fortunate we won the Oslo, Norway which is the major airport last year, we have announced the Rome airport and then we’ve had subsequent wins after that both in the European sector and the Asia Pacific sector.

Okay and then you mentioned submission of that RTT110 by the end of the fiscal year for certification in the U.S. I would imagine that would be a shorter certification process, given the 80 has already been improved is that the right way to think about that?

That’s the right way to look at it and as you know that the U.S. is not right now ready to replace all their machines, so that we think that by 2018, 2019, 2020 they’ll start doing the same thing, and we decided that there’s no point of carrying RTT80 and RTT110. We already have the certificate from TSA on the RTT80, since the rest of the world is moving onto the RTT110 and that’s what we are focusing on. We announced in the last call also that we are submitting for re-certification of the RTT110 and think that it will grow faster because of our experience with the RTT80.

Okay. And then, I’m curious to get your take on potential consolidation opportunities of the security market, particularly with some of the vendors in the U.S. as well as overseas?

Well you know that, we don’t want to comment on anything specific, but we are watching the industry and we’ve always said that that we have a very good appetite, we have a clean balance sheet, and what I call an organization which can digest it. So we continue to watch and look and we’ll continue to look at what is out there.

Okay. Great and then Alan, in terms of how would you think about unusual expenses and restructuring charges with Opto you referred to being mostly done there. With security and healthcare, is there more to go there? Should we expect some of those charges in fiscal 2016 or are those mostly behind?

Sure, Jeff. Yes, I think a lot of the heavy lifting is behind us. That being said, we have a mantra of continuous improvement. Wherever we think we can create opportunities for increased efficiencies, we always seek to do that. So while we’re not currently forecasting significant restructuring charges in fiscal 2016, we look – we will look for ways for further operating efficiencies.

Okay. And then can you help us get our arms around the savings that result on an annualized basis from the efforts that were implemented this year, this past year?

Yes, it’s a good question and there’s loads of different aspects of that, much of which was already have been incorporated into the numbers that occurred throughout fiscal 2015. I guess the one that happened later in the year which is a fair question would be the consolidation of the manufacturing facility that Deepak alluded to which was completed in the May timeframe. And we believe this consolidation could save us close to about $1 million a year going forward.

Okay. That’s very helpful. Thanks, guys.

Thank you. Our next question comes from the line Josephine Millward from The Benchmark Company. Your question please? Josephine you might have your phone on mute? [Operator Instructions] It appears that we have no further questions at this time. I would like to hand the program back for any further remarks.

Well. Thank you very much for listening to our call, we are very excited about fiscal 2016. And hope to talk to you with more update on October Q1 call. Thank you.