OSI Systems, Inc. (NASDAQ:OSIS), a vertically integrated
provider of specialized electronics, today announced financial
results for the quarter ended September 30, 2010.
Deepak Chopra, OSI Systems’ Chairman and CEO, stated, “We had a
successful first quarter of fiscal 2011, as outstanding bookings
led to a record backlog of $308 million at quarter-end, positioning
the Company for significant sales and earnings growth. In addition,
we continued to substantially grow earnings and generate excellent
cash flow.”
The Company reported revenues of $128.5 million for the first
quarter of fiscal 2011, a decrease of $5.3 million, or 4%, from the
$133.8 million reported for the first quarter of fiscal 2010. Net
income for the first quarter of fiscal 2011 was $3.4 million, or
$0.18 per diluted share, compared to net income of $2.5 million, or
$0.14 per diluted share, for the first quarter of fiscal 2010.
Excluding the impact of restructuring and other charges, net
income for the first quarter of fiscal 2011 would have been
approximately $3.6 million or $0.19 per diluted share compared to a
net income of $2.5 million or $0.14 per diluted share for the first
quarter of fiscal 2010. 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 ongoing operations of the Company.
As of September 30, 2010, the Company’s backlog was $308 million
compared to $240 million as of June 30, 2010, an increase of 28%.
During the three months ended September 30, 2010, the Company
generated cash flow from operations of $9.6 million.
Mr. Chopra continued, "Our Security Division is well-positioned
to realize significant growth. With outstanding bookings of $112
million during the first quarter, our Security Division’s backlog
grew to a record $205 million by quarter-end, which is a 42%
increase since the beginning of the fiscal year. We were awarded
several large contracts during the quarter including, among others,
$35 million of orders from the TSA for checkpoint X-ray baggage
inspection systems to screen passengers’ carry-on baggage. These
TSA orders are among the first to be placed under the terms of our
recently awarded, five year $325 million Indefinite Delivery,
Indefinite Quantity (IDIQ) contract. Other orders include a
contract worth up to $12 million from the U.S. Department of
Homeland Security (DHS) to assist DHS in conducting
transformational research and development initiatives to advance
the country's nuclear materials detection capabilities; $31 million
of orders from U.S. government agencies for cargo and vehicle
inspection systems and people screening systems; and a $9 million
order from the European Customs Agency for cargo and vehicle
inspection systems.”
Mr. Chopra added, “The environment for our Healthcare division
continues to be challenging, as sales for the first quarter
declined approximately 2%. However, due to operational improvements
and efficiencies gained, our operating margin improved from 3.2% in
the first quarter of fiscal 2010 to 6.2% in the first quarter of
fiscal 2011, during what is traditionally our softest quarter,
translating into the strongest Q1 operating performance in the
division’s history. As a result, we are well-positioned to
experience strong margin expansion as Healthcare sales
improve."
Mr. Chopra concluded, “We are pleased with the strong bottom
line performance in our Optoelectronics and Manufacturing Division.
Operating margins improved despite the expected reduction in first
quarter revenues as the prior year quarter sales were favorably
impacted by high revenues associated with a major contract.”
Fiscal Year 2011 Outlook
Subject to the risk factors detailed in the Safe Harbor section
of this press release, the Company announced that it anticipates
fiscal 2011 sales to be between $645 million and $660 million,
representing an 8% to 11% increase over fiscal 2010 and 12% to 15%
year-over-year growth for the nine-months ending June 30, 2011. In
addition, the Company is raising its earnings guidance and expects
diluted earnings per diluted share to increase at a rate of 22-31%
to between $1.70 to $1.82, excluding the impact of restructuring
and other non-recurring charges.
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 first quarter of fiscal 2011.
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 November 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 ‘38216782’ 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.
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 or that strong
sales by its Security division will continue to occur in the
future. 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 September 30, 2009
2010 Revenue $ 133,761 $
128,453 Cost of goods sold 89,294 81,555
Gross profit 44,467 46,898 Operating expenses:
Selling, general and administrative 32,280 31,976 Research and
development 7,989 9,231 Restructuring and other charges -
256 Total operating expenses
40,269 41,463 Income from operations
4,198 5,435 Interest expense and other income, net (605 )
(590 ) Income before income taxes 3,593 4,845 Income
tax expense 1,083 1,453 Net
income $ 2,510 $ 3,392 Diluted earnings per
share $ 0.14 $ 0.18 Weighted average shares
outstanding – diluted 17,818 19,078
Consolidated Balance Sheets (in
thousands) (Unaudited) June 30,
September 30, 2010 2010
Assets Cash and cash equivalents $ 51,989 $ 55,569
Accounts receivable, net 132,728 99,949 Inventories 125,930 146,968
Other current assets 38,554 38,861
Total current assets 349,201 341,347 Non-current assets
163,913 172,029 Total assets $
513,114 $ 513,376
Liabilities and
Shareholders' Equity Current portion of long-term debt $ 12,743
$ 8,632 Accounts payable and accrued expenses 63,945 62,634 Other
current liabilities 67,906 57,861
Total current liabilities 144,594 129,127 Long-term debt
23,366 20,841 Other long-term liabilities 31,444
34,683 Total liabilities 199,404 184,651
Total shareholders’ equity 313,710
328,725 Total liabilities and equity $ 513,114
$ 513,376
Segment Information
(in thousands) (unaudited) Three Months
Ended September 30, 2009
2010 Revenues – by Segment:
Security division $ 47,335 $ 51,097 Healthcare division 46,962
45,924 Optoelectronics and Manufacturing division, including
intersegment revenues 45,791 41,911 Intersegment revenues
elimination (6,327 ) (10,479 ) Total $ 133,761
$ 128,453
Operating income (loss) – by
Segment: Security division $ 1,969 $ 2,111 Healthcare division
1,495 2,598 Optoelectronics and Manufacturing division 3,461 3,421
Corporate (3,280 ) (2,176 ) Eliminations 553
(519 )
Total
$ 4,198 $ 5,435
Reconciliation of GAAP to Non-GAAP (in thousands, except
earnings per share data) (Unaudited) For the
Three Months Ended September 30, 2009
2010 Net income EPS Net
income EPS GAAP basis $ 2,510 $
0.14 $ 3,392 $ 0.18 Restructuring and other charges, net of
tax - - 179 0.01 Non-GAAP basis $ 2,510
$ 0.14 $ 3,571 $ 0.19
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