OSIS OSI Systems Inc

OSI Systems, Inc. (NASDAQ:OSIS), a vertically integrated provider of specialized electronics, today announced financial results for the first quarter ended September 30, 2009.

Deepak Chopra, OSI Systems’ Chairman and CEO, stated, “We had a very successful first quarter of fiscal 2010 despite the impact of a challenging economic environment. Outstanding bookings led to a backlog of $234 million at quarter-end, positioning the Company for substantial sales and earnings growth for fiscal 2010. We are pleased to again demonstrate significantly improved earnings while simultaneously generating excellent free cash flow. These achievements are the direct result of our initiatives to implement organizational changes that have reduced our cost structure and improved our overall operating efficiencies.”

The Company reported revenues of $133.8 million for the first quarter of fiscal 2010, a decrease of $14.4 million, or 9.7%, from the $148.2 million reported for the first quarter of fiscal 2009. Net income for the first quarter of fiscal 2010 was $2.5 million, or $0.14 per diluted share, compared to net income of $0.1 million, or $0.01 per diluted share, for the first quarter of fiscal 2009.

As of September 30, 2009, the Company’s backlog of $234 million compared to $203 million as of June 30, 2009, an increase of 15%. During the three months ended September 30, 2009, the Company generated cash flow from operations of $10.5 million.

Mr. Chopra continued, "Our Security Division is well-positioned to realize significant growth during fiscal 2010. With outstanding bookings of $77 million during the first quarter, our Security Division achieved a record backlog of $146 million by quarter-end, which is a 26% increase since the beginning of the fiscal year. Among the contracts we received during the quarter is a $25 million order for multiple units of the Rapiscan Secure 1000 Single Pose advanced checkpoint security screening solution. This order is the first to be placed under the terms of our recently awarded $173 million Indefinite Delivery, Indefinite Quantity (IDIQ) contract from the TSA.”

Mr. Chopra concluded, “Our Healthcare division achieved a record operating profit in the first quarter of fiscal 2010 aided by the proactive measures undertaken in the prior fiscal year to reduce our fixed cost structure. Although Healthcare sales declined due to a challenging macroeconomic environment, we are beginning to see positive signs for recovery. As sales to hospitals improve, this division is well positioned to experience strong operating margin expansion.”

Fiscal Year 2010 Outlook

Subject to the risk factors detailed in the Safe Harbor section of this press release, the Company announced that it anticipates fiscal 2010 sales to be between $620 million and $640 million, representing a 5% to 8% increase over fiscal 2009 and 10% to 15% year-over-year growth for the nine-months ending June 30, 2010. In addition, the Company is raising its earnings guidance and expects earnings per diluted share to increase at a rate of 25-35% to between $1.14 to $1.23, excluding the impact of restructuring and other non-recurring charges incurred in fiscal 2009.

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 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 November 10, 2009. 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 ‘88847525’ 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, 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 EndedSeptember 30,

2008         2009 Revenue $ 148,161 $ 133,761 Cost of goods sold   98,526     89,294     Gross profit 49,635 44,467   Operating expenses: Selling, general and administrative 37,541 32,280 Research and development 10,213 7,989 Restructuring and other charges   801     -    

Total operating expenses

  48,555     40,269     Income from operations 1,080 4,198 Interest expense, net   (895 )   (605 )   Income before income taxes 185 3,593 Income tax expense   53     1,083     Net income $ 132   $ 2,510     Diluted earnings per share $ 0.01   $ 0.14   Weighted average shares outstanding – diluted   18,166     17,818                      

Consolidated Balance Sheets

(in thousands)

  June 30, September 30, 2009 2009 Assets Cash and cash equivalents $ 25,172 $ 24,630 Accounts receivable, net 110,453 112,542 Inventories 150,763 141,755 Other current assets   36,855   38,910   Total current assets 323,243 317,837 Non-current assets   151,585   157,422   Total assets $ 474,828 $ 475,259   Liabilities and Shareholders' Equity Bank lines of credit $ 4,000 $ 2,000 Current portion of long-term debt 8,557 8,497 Accounts payable and accrued expenses 68,813 69,267 Other current liabilities   54,265   52,515   Total current liabilities 135,635 132,279 Long-term debt 39,803 33,867 Other long-term liabilities   23,390   29,314   Total liabilities 198,828 195,460   Total shareholders’ equity   276,000   279,799   Total liabilities and equity $ 474,828 $ 475,259              

Segment Information

(in thousands)

 

Three Months EndedSeptember 30,

2008       2009 Revenues – by Segment: Security division $ 58,685 $ 47,335 Healthcare division 54,827 46,962 Optoelectronics and Manufacturing division, including intersegment revenues 44,882 45,791 Intersegment revenues elimination   (10,233 )   (6,327 )   Total $ 148,161   $ 133,761     Operating income (loss) – by Segment: Security division $ 3,048 $ 1,969 Healthcare division (1,824 ) 1,495 Optoelectronics and Manufacturing division 3,863 3,461 Corporate (4,185 ) (3,280 ) Eliminations   178     553     Total $ 1,080   $ 4,198