OSI Systems, Inc. (NASDAQ:OSIS), a vertically integrated
provider of solutions in Security, Healthcare, and specialized
electronics, today announced financial results for the second
quarter ended December 31, 2009.
Deepak Chopra, OSI Systems’ Chairman and CEO, stated, “We have
again demonstrated significantly improved earnings and strong free
cash flow, as well as improved margins in each of our divisions.
These achievements are the direct result of our initiatives to
improve our overall operating efficiencies. With outstanding
bookings and a record backlog, we are poised for significant sales
and earnings growth in the second half of our fiscal year.”
The Company reported revenues of $150.6 million for the second
quarter of fiscal 2010, a decrease of 5% as compared to the same
period a year ago. Net income for the second quarter of fiscal 2010
was $7.0 million, or $0.39 per diluted share, compared to net
income of $4.2 million, or $0.24 per diluted share, for the second
quarter of fiscal 2009.
For the six months ended December 31, 2009, the Company reported
revenues of $284.4 million, a decrease of 7% as compared to the
same period a year ago. Net income for the six months ended
December 31, 2009 was $9.5 million, or $0.53 per diluted share,
compared to net income of $4.3 million, or $0.24 per diluted share,
for the six months ended December 31, 2008.
Excluding the impact of restructuring and other charges, net
income for the second quarter of fiscal 2010 would have been
approximately $7.4 million or $0.41 per diluted share compared to a
net income of $6.0 million or $0.34 per diluted share for the
second quarter of fiscal 2009 and net income for the first half of
fiscal 2010 would have been approximately $9.9 million or $0.56 per
diluted share compared to a net income of $6.7 million or $0.37 per
diluted share for the first half of fiscal 2009. These non-GAAP
figures are provided to allow for the comparison of underlying
earnings, net of restructuring and other charges, thus providing
additional insight into the on-going operations of the Company.
As of December 31, 2009, the Company’s backlog was $240 million
compared to $203 million as of June 30, 2009, an increase of 18%.
During the three and six months ended December 31, 2009, the
Company generated cash flow from operations of $12.9 million and
$23.4 million, respectively.
Mr. Chopra continued, "Our Security division is well positioned
to achieve significant operating margin expansion. With an expanded
set of customers and product offerings we generated strong bookings
which lead to a record Security division backlog of $164 million, a
41% increase since the beginning of the fiscal year. Major recent
contract wins including a Screening Solution agreement with the
Puerto Rico Ports Authority, which for the Company is a
first-of-its-kind turnkey cargo scanning solution for port security
and a $35 million order to construct baggage handling systems and
install integrated baggage screening equipment at multiple Mexican
airports demonstrate our diversified capabilities. In addition, we
expect to benefit from the recent announcements by the TSA and
other international authorities to expand the use of full body
scanners at airport security checkpoints. We are currently
fulfilling the initial order quantities from the $173 million
Indefinite Delivery, Indefinite Quantity (IDIQ) contract with the
TSA, which is for multiple units of the Rapiscan Secure 1000 Single
Pose advanced checkpoint security screening system.”
Mr. Chopra concluded, “Our Healthcare division achieved an
operating profit of $6.0 million, or an 11% operating margin,
during the quarter, a significant increase over the second quarter
of fiscal 2009, in spite of 4% lower revenues. Although the climate
for our Healthcare division has improved, it continues to be a
challenging environment. To leverage our new product introductions
in the Healthcare segment, we are expanding sales efforts by
increasing our presence at small-to-medium sized hospitals and
outpatient surgery centers in the U.S. As demonstrated by this
quarter’s results, we are well-positioned to experience strong
operating margins as top line growth returns to the Healthcare
segment."
Fiscal Year 2010 Outlook
Subject to the risk factors detailed in the Safe Harbor section
of this press release, the Company is raising its fiscal 2010
earnings guidance and expects earnings per diluted share to
increase at a rate of 35% - 45% to between $1.23 to $1.32,
excluding the impact of restructuring and other non-recurring
charges. In addition, the Company is reiterating its annual revenue
guidance of $620 million to $640 million with growth in second half
revenues of the fiscal year led by the Company’s Security
division.
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous
webcast over the Internet beginning at 9:00am PT (12:00pm ET),
today to discuss its results for the second quarter of fiscal 2010.
To listen, please log on to www.fulldisclosure.com or
www.osi-systems.com and follow the link that will be posted on the
front page. A replay of the webcast will be available shortly after
the conclusion of the conference call at 12:00pm PT (3:00pm ET)
until February 10, 2010. The replay can either be accessed through
the Company’s website, www.osi-systems.com, or via telephonic
replay by calling 1-888-286-8010 and entering the conference call
identification number ‘55924741’ when prompted for the replay
code.
About OSI Systems, Inc.
OSI Systems, Inc. is a vertically integrated designer and
manufacturer of specialized electronic systems and components for
critical applications. The Company sells its products in
diversified markets, including homeland security, healthcare,
defense and aerospace. The Company has more than 30 years of
experience in electronics engineering and manufacturing and
maintains offices and production facilities located in more than a
dozen countries. It implements a strategy of expansion by
leveraging its electronics and contract manufacturing capabilities
into selective end product markets through organic growth and
acquisitions. For more information on OSI Systems Inc. or any of
its subsidiary companies, visit www.osi-systems.com. News Filter:
OSIS-E
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements include information regarding the
Company’s expectations, goals or intentions about the future,
including, the Company’s predictions about the cash generating
potential of its businesses and future earnings. The actual results
may differ materially from those described in or implied by any
forward-looking statement. In particular, there can be no assurance
that the Company will continue to generate cash, that strong sales
by its Security division will continue to occur in the future, or
that cost-cutting measures in its Healthcare division will
ultimately prove beneficial. Other important factors are set forth
in our Securities and Exchange Commission filings. All
forward-looking statements speak only as of the date made, and we
undertake no obligation to update these forward-looking
statements.
OSI SYSTEMS, INC. AND SUBSIDIARIES Consolidated
Statements of Operations (in thousands, except per share
data) (Unaudited) Three
Months Ended Six Months Ended
December 31,
December 31, 2008
2009 2008
2009 Revenue $ 159,042 $ 150,621 $ 307,203 $ 284,382
Cost of goods sold 104,623 94,256
203,149 183,550 Gross profit 54,419
56,365 104,054 100,832 Operating expenses: Selling, general
and administrative 35,727 34,610 73,268 66,890 Research and
development 8,669 10,353 18,882 18,342 Restructuring and other
charges 2,798 607 3,599
607 Total operating expenses 47,194
45,570 95,749 85,839
Income from operations 7,225 10,795 8,305 14,993 Interest expense
and other, net
(863 ) (784 ) (1,758 ) (1,389 ) Income
before income taxes 6,362 10,011 6,547 13,604 Income tax expense
2,200 3,059 2,253
4,142 Net income $ 4,162 $ 6,952 $ 4,294
$ 9,462 Diluted income per share $ 0.24 $ 0.39
$ 0.24 $ 0.53 Weighted average shares
outstanding – diluted 17,558 18,014
17,765 17,906
Consolidated Balance
Sheets (in thousands) (Unaudited)
June 30, December
31, 2009 2009
Assets
Cash and cash equivalents $ 25,172 $ 27,568 Accounts receivable,
net 110,453 117,134 Inventories 150,763 128,884 Other current
assets 36,855 38,479 Total current assets 323,243
312,065 Non-current assets 151,585 161,047 Total
Assets $ 474,828 $ 473,112
Liabilities and Stockholders'
Equity Bank lines of credit $ 4,000 $ - Current portion of
long-term debt 8,557 7,572 Accounts payable and accrued expenses
68,813 55,222 Other current liabilities 54,265 58,144
Total current liabilities 135,635 120,938 Long-term debt 39,803
30,938 Other long-term liabilities 23,390 29,463
Total liabilities 198,828 181,339 Total shareholders’ equity
276,000 291,773 Total Liabilities and Equity $ 474,828 $
473,112
SEGMENT INFORMATION (in thousands)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31, 2008
2009 2008
2009 Revenues – by Segment Group: Security
Group $ 67,067 $ 59,092 $ 125,752 $ 106,427 Healthcare Group 59,695
57,048 114,522 104,010 Optoelectronics and Manufacturing Group
including intersegment revenues 44,745 43,663 89,626 89,454
Intersegment revenues elimination (12,465 ) (9,182 )
(22,697 ) (15,509 ) Total $ 159,042 $ 150,621
$ 307,203 $ 284,382
Operating income
(loss) – by Segment Group: Security Group $ 4,846 $ 4,134 $
7,894 $ 6,102 Healthcare Group 2,285 5,808 460 7,303
Optoelectronics and Manufacturing Group 3,195 3,257 7,057 6,718
Corporate (2,712 ) (2,689 ) (6,896 ) (5,969 ) Eliminations
(389 ) 285 (210 ) 839 Total $
7,225 $ 10,795 $ 8,305 $ 14,993
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