OSI Systems, Inc. (NASDAQ:OSIS), a vertically integrated
provider of solutions in Security, Healthcare, and specialized
electronics, today announced financial results for the third
quarter ended March 31, 2010.
Deepak Chopra, OSI Systems’ Chairman and CEO, stated, “We are
very pleased with the strong quarterly earnings and cash flow in
the face of a challenging economic environment. We are positioned
very well for expanded earnings as sales growth accelerates.”
The Company reported revenues of $145.4 million for the third
quarter of fiscal 2010, an increase of 1% as compared to the same
period a year ago. Net income for the third quarter of fiscal 2010
was $6.1 million, or $0.33 per diluted share, compared to net
income of $2.6 million, or $0.15 per diluted share, for the third
quarter of fiscal 2009.
For the nine months ended March 31, 2010, the Company reported
revenues of $429.8 million, a decrease of 5% as compared to the
same period a year ago. Net income for the nine months ended March
31, 2010 was $15.6 million, or $0.85 per diluted share, compared to
net income of $6.9 million, or $0.39 per diluted share, for the
nine months ended March 31, 2009.
Excluding the impact of restructuring and other charges, net
income for the third quarter of fiscal 2010 would have been
approximately $6.8 million or $0.36 per diluted share compared to a
net income of $4.2 million or $0.24 per diluted share for the third
quarter of fiscal 2009 and net income for the nine months of fiscal
2010 would have been approximately $16.7 million or $0.91 per
diluted share compared to a net income of $10.8 million or $0.61
per diluted share for the nine months 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 March 31, 2010, the Company’s backlog was $230 million
compared to $203 million as of June 30, 2009, an increase of 13%.
During the three and nine months ended March 31, 2010, the Company
generated cash flow from operations of $16 million and $40 million,
respectively.
Mr. Chopra continued, "Our Security division experienced an
excellent third quarter and is poised for continued sales and
operating profit growth. As sales increased 23% in the quarter
coupled with efficiency improvement initiatives, we reported a
10.2% operating margin which led to an operating profit increase of
119% over fiscal 2009.”
Mr. Chopra concluded, “Macroeconomic factors have continued to
result in a challenging environment for our Healthcare division. In
what is historically a seasonally soft quarter for our healthcare
business, we managed to generate reasonable profit and strong cash
flow. The substantial improvements to our cost structure that we
have implemented have provided a much more efficient operating
infrastructure, which is expected to result in significant
operating margin leverage when our sales growth resumes.”
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 43% - 50% to between $1.30 to $1.36,
excluding the impact of restructuring and other non-recurring
charges. In addition, the Company is providing revenue guidance for
the fourth quarter of fiscal 2010 of $153 million to $167 million,
representing an increase from the prior year of 10% to 20%.
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 third quarter of fiscal 2010.
To listen, please visit the investor relations section of OSI
Systems website, http://investors.osi-systems.com/index.cfm 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 May 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 ‘79134342’ 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.
Consolidated Statements of Operations (in
thousands, except per share data) (Unaudited)
Three Months Ended
March 31,
Nine Months Ended
March 31,
2009 2010 2009 2010
Revenue $ 144,095 $ 145,401 $ 451,298 $ 429,783 Cost of goods sold
94,264 92,184 297,413
275,734 Gross profit 49,831 53,217 153,885 154,049
Operating expenses: Selling, general and administrative 34,406
34,789 107,674 101,679 Research and development 8,572 9,129 27,454
27,471 Restructuring and other charges 2,401
946 6,000 1,553 Total operating
expenses 45,379 44,864 141,128
130,703 Income from operations 4,452 8,353 12,757
23,346 Interest expense and other income, net (583 )
175 (2,341 ) (1,214 ) Income before income taxes
3,869 8,528 10,416 22,132 Income tax expense 1,296
2,416 3,549 6,558 Net income $
2,573 $ 6,112 $ 6,867 $ 15,574 Diluted income
per share $ 0.15 $ 0.33 $ 0.39 $ 0.85 Weighted
average shares outstanding – diluted 17,396
18,772 17,624 18,219
Consolidated Balance Sheets (in thousands)
(Unaudited) June 30, March
31, 2009 2010 Assets Cash and cash
equivalents $ 25,172 $ 46,337 Accounts receivable, net 110,453
112,787 Inventories 150,763 122,804 Other current assets
36,855 45,907 Total current assets 323,243 327,835
Non-current assets 151,585 166,152 Total Assets $
474,828 $ 493,987
Liabilities and Stockholders' Equity Bank
lines of credit $ 4,000 $ -- Current portion of long-term debt
8,557 9,670 Accounts payable and accrued expenses 68,813 54,952
Other current liabilities 54,265 66,878 Total current
liabilities 135,635 131,500 Long-term debt 39,803 28,392 Other
long-term liabilities 23,390 28,930 Total liabilities
198,828 188,822 Total shareholders’ equity 276,000
305,165 Total Liabilities and Equity $ 474,828 $ 493,987
Segment Information (in thousands) (Unaudited)
Three Months Ended
March 31,
Nine Months Ended
March 31,
2009 2010 2009 2010
Revenues – by Segment Group: Security Group $ 56,495 $
69,341 $ 182,247 $ 175,768 Healthcare Group 50,376 45,910 164,898
149,920 Optoelectronics and Manufacturing Group including
intersegment revenues 48,811 38,177 138,438 127,631 Intersegment
revenues elimination (11,587 ) (8,027 )
(34,285 ) (23,536 ) Total $ 144,095 $ 145,401
$ 451,298 $ 429,783
Operating income (loss)
– by Segment Group: Security Group $ 3,248 $ 7,096 $ 11,142 $
13,198 Healthcare Group 2,226 1,706 2,687 9,009 Optoelectronics and
Manufacturing Group 4,185 1,504 11,243 8,222 Corporate (4,952 )
(2,390 ) (11,849 ) (8,359 ) Eliminations (255 ) 437
(466 ) 1,276 Total $ 4,452 $
8,353 $ 12,757 $ 23,346
Reconciliation of GAAP to
Non-GAAP
(in thousands, except earnings
per share data)
(Unaudited)
For the Three Months Ended March 31,
For the Nine Months Ended March 31, 2009
2010 2009 2010 Net
Net Net Net income
EPS income EPS income EPS
income EPS GAAP basis $ 2,573 $ 0.15 $ 6,112 $
0.33 $ 6,867 $ 0.39 $ 15,574 $ 0.85 Restructuring and other
charges, net of tax 1,597 0.09 678 0.03 3,956 0.22 1,093 0.06
Non-GAAP
basis $ 4,170 $ 0.24 $ 6,790 $ 0.36 $ 10,823 $ 0.61 $ 16,667 $ 0.91
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