OSI Systems, Inc. (NASDAQ:OSIS) Q4 2020 Earnings Conference Call - Final Transcript
Aug 20, 2020 • 04:30 pm ET
continue to see a robust pipeline of opportunities that Deepak will touch on.
As the COVID-19 situation continues to evolve, we are monitoring the business environment. We are committed to delivering the products and services needed for our customers and to maintaining a safe and healthy workplace for our employees.
Before diving more deeply into our financial results and discussing our fiscal '21 guidance, let me turn the call over to Deepak.
Thank you, Alan. And again, welcome to the OSI Systems' earnings conference call. Each of our businesses worked through a variety of challenges stemming from the COVID-19 pandemic, yet each team contributed to a solid Q4 and fiscal 2020 as we grew earnings, improved margins and achieved impressive cash flow for the year. As we navigate through these unprecedented times, we continue to focus on meeting our customer demands, while simultaneously promoting the safety and the health of our employees.
As Alan just mentioned, our Board just expanded our share repurchase program. This reaffirms the Board's confidence in our future and provides the company significant flexibility in capital allocation to maximize shareholder value. Discussing each division in more depth, starting with Security, where Q4 fiscal '20 revenues were $164 million. After being on a record revenue pace through the first nine months of fiscal '20, we finished the year with Security revenues of $742 million, down slightly from the prior year.
We anticipate the revenue slowdown experienced in Q4 this year to continue at least through Q1 of fiscal 2021. We have made operational improvements that are expected to help deliver continued strong profitability in the Security division in fiscal '21 that could position the business for accelerated growth long-term and in fiscal '22 and onwards.
As we mentioned on the call last quarter, we expected the Security division to experience some headwinds due to COVID with the downturn in airport traffic challenges associated with site and factory acceptance tests as a result of travel restrictions and partial shutdowns with certain customers. We are working with our airport customers as some facilities have actually started accelerating installations, taking advantage of reduced activity while others have pushed out certain initiatives.
Even as airports face a tough environment, we have achieved several wins in this market. As an example, we have been recently notified of an award from an international airport for significant quantities of our RTT, Real Time Tomography, baggage scanners. This is a great validation of our state-of-the-art RTT CT baggage scanners and this award is not in our backlog as yet.
We continue to see accelerated activity in the air cargo customers that we even mentioned last conference call that are shifting their resources to handle the higher demand for e-commerce-based products and services. There has been continued activity, albeit at a slower pace, on some of the larger initiatives within the US and international customers. Some of the larger opportunities are getting pushed to the right due to the pandemic. However, the opportunity pipeline continues to