- Record Q4 and Full Year Revenue of
$267 million and $958 million
- Record Q4 Earnings per Diluted
Share
- GAAP EPS of $1.09
- Non-GAAP EPS of $1.22
- Record Full Year Earnings per
Diluted Share
- GAAP EPS of $3.17 (36%
growth)
- Non-GAAP EPS of $3.53 (13%
growth)
- Company Provides Fiscal 2016 Revenue
and EPS Guidance
OSI Systems, Inc. (NASDAQ: OSIS) today announced financial
results for its fourth quarter and fiscal year ended June 30,
2015.
Deepak Chopra, OSI Systems’ President and CEO, stated, “We are
pleased to report our fourth quarter and full year operating
results. We achieved record sales and earnings during the quarter
and fiscal 2015. With a robust pipeline of opportunities across
each of our divisions coupled with significant, recently
implemented operational improvement initiatives, we are optimistic
for the future.”
The Company reported revenues of $267 million for the fourth
quarter of fiscal 2015, an increase of 2% from the $260 million
reported for the fourth quarter of fiscal 2014. Net income for the
fourth quarter of fiscal 2015 was $22.4 million, or $1.09 per
diluted share, compared to net income of $22.1 million, or $1.07
per diluted share, for the fourth quarter of fiscal 2014. Excluding
the impact of restructuring and other charges, net income for the
fourth quarter of fiscal 2015 would have been $25.0 million, or
$1.22 per diluted share, compared to net income of $24.5 million,
or $1.19 per diluted share, for the fourth quarter of fiscal
2014.
For the fiscal year ended June 30, 2015, the Company reported
revenues of $958 million, a 6% increase from the $907 million
reported for fiscal 2014. Net income for fiscal 2015 was $65.2
million, or $3.17 per diluted share, compared to net income of
$47.9 million, or $2.33 per diluted share, in fiscal 2014.
Excluding the impact of restructuring and other charges, and the
impact in fiscal 2014 of tax elections related to the Company’s
turnkey program in Mexico, net income for fiscal 2015 would have
been $72.4 million, or $3.53 per diluted share, compared to net
income of $64.3 million, or $3.13 per diluted share, for fiscal
2014.
During the quarter, the Company’s book-to-bill ratio for
equipment and related services (non-turnkey) was 1.2 and, as of
June 30, 2015, the Company’s backlog was $638 million. During
fiscal 2015, the Company generated cash flow from operations of
$105.1 million.
Mr. Chopra further commented, “Sales in our Healthcare Division
increased by 29% over the prior year fourth quarter driven by
significant growth in our U.S. patient monitoring business and the
impact of an acquisition completed in the first quarter. New
products have been well received, contributing to a very strong
quarter providing nice momentum as we head into fiscal 2016.”
Mr. Chopra continued, “Our Security Division’s fourth quarter
sales of $131 million were solid. Due to the difficult comparison
from the partial fulfillment of our Foreign Military Sale contract
with the U.S. Department of Defense in the fourth quarter of the
prior year, revenues were down 7%. We are encouraged by the
prospects of continued strong performance with the strength of the
backlog, new cargo and vehicle inspection product orders, multiple
wins for the recently introduced RTT™ 110 (Real Time Tomography)
explosives detection systems, and a robust pipeline of
opportunities throughout our product and turnkey portfolio.”
Mr. Chopra concluded, “During the fourth quarter our
Optoelectronics and Manufacturing Division realized solid operating
margin improvement and completed a significant facility
consolidation within our contract manufacturing business. This
initiative, as well as the recent deployment of other efficiency
enhancements in our Healthcare and Security Divisions, will benefit
our operations going forward.”
Company Outlook – Guidance for Fiscal 2016
Subject to the risks described herein, the Company anticipates
fiscal 2016 sales to be between $985 million and $1,020 million. In
addition, the Company anticipates earnings per diluted share of
$3.75 to $4.00, excluding the impact of restructuring and other
charges.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net
income and diluted earnings per share, each of which is a non-GAAP
financial measure. Discussion of adjustments to arrive at non-GAAP
figures for the three months and fiscal years ended June 30, 2014
and 2015 is provided to allow for the comparison of underlying
earnings, net of restructuring and other charges, and the impact of
tax elections made related to the Company’s turnkey program in
Mexico that resulted in tax charges. Management believes that
providing these non-GAAP figures provides additional insight into
the ongoing operations of the Company. Non-GAAP financial measures
should not be considered in isolation or as a substitute for
measures of financial performance prepared in accordance with GAAP.
Management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding the Company’s results
primarily because they exclude amounts that management does not
view as reflective of ongoing operating results when planning and
forecasting and when assessing the performance of the business.
Management believes that the Company’s non-GAAP financial measures
also facilitate the comparison of results for current periods and
guidance for future periods with results for past periods.
Reconciliations of GAAP to non-GAAP net income and diluted
earnings per share are in the accompanying tables.
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous
webcast beginning at 9:00am PT (12:00pm ET) today to discuss its
results for the fourth quarter and the full 2015 fiscal year. To
listen, log on to the Company's website at www.osi-systems.com and
follow the link in the Investor Relations section. A replay of the
webcast will be available shortly after the conclusion of the
conference call until September 4, 2015. The replay can either be
accessed through the Company’s website, www.osi-systems.com, or via
telephonic replay by calling 1-855-859-2056 and entering the
conference call identification number ‘14042799’ 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 and provides
related services 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 in
more than a dozen countries. The Company 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
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements relate to the Company's current
expectations, beliefs, projections and similar expressions
concerning matters that are not historical facts and are not
guarantees of future performance. Forward-looking statements
involve uncertainties, risks, assumptions and contingencies, many
of which are outside the Company's control and which may cause
actual results to differ materially from those described in or
implied by any forward-looking statement. Such statements include,
but are not limited to, information provided regarding expected
revenues, earnings and growth in fiscal 2016. In addition, the
Company could be exposed to a variety of negative consequences as a
result of delays related to the award of domestic and international
contracts; delays in customer programs; delays in revenue
recognition related to the timing of customer acceptance;
unanticipated impacts of sequestration and other provisions of the
Budget Control Act of 2011 as modified by the Bipartisan Budget Act
of 2013; changes in domestic and foreign government spending,
budgetary, procurement and trade policies adverse to the Company's
businesses; unfavorable currency exchange rate fluctuations; market
acceptance of the Company's new and existing technologies, products
and services; the Company's ability to win new business and convert
any orders received to sales within the fiscal year in accordance
with the Company's operating plan; enforcement actions in respect
of any noncompliance with laws and regulations including export
control and environmental regulations and the matters that are the
subject of some or all of the Company's ongoing investigations and
compliance reviews, contract and regulatory compliance matters, and
actions, if brought, resulting in judgments, settlements, fines,
injunctions, debarment or penalties, as well as other risks and
uncertainties, including but not limited to those detailed herein
and from time to time in the Company's Securities and Exchange
Commission filings which could have a material and adverse impact
on the Company's business, financial condition and results of
operations. For a further discussion of these and other factors
that could cause the Company's future results to differ materially
from any forward-looking statements, see the section entitled "Risk
Factors" in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 2014 and other risks described in documents
subsequently filed by the Company from time to time with the
Securities and Exchange Commission. All forward-looking statements
are based on currently available information and speak only as of
the date on which they are made. The Company assumes no obligation
to update any forward-looking statement made in this press release
that becomes untrue because of subsequent events, new information
or otherwise, except to the extent it is required to do so in
connection with its ongoing requirements under federal securities
laws.
OSI SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share data)
Three Months Ended June 30,
Fiscal Year Ended June 30, 2014
2015 2014 2015
(unaudited) Revenue $ 260,104 $ 266,601 $ 906,742 $ 958,202
Cost of goods sold 174,496 177,368
601,742 632,849 Gross profit 85,608
89,233 305,000 325,353 Operating expenses: Selling, general and
administrative 39,700 41,710 166,869 171,756 Research and
development 12,018 13,170 44,792 51,639 Restructuring and other
charges 3,119 3,425 12,044
9,850 Total operating expenses 54,837
58,305 223,705 233,245
Income from operations 30,771 30,928 81,295 92,108 Interest
expense and other income, net (1,097 ) (747 )
(5,440 ) (3,255 ) Income before income taxes 29,674 30,181
75,855 88,853 Provision for income taxes 7,548
7,748 27,961 23,702 Net income $
22,126 $ 22,433 $ 47,894 $ 65,151
Diluted income per share $ 1.07 $ 1.09 $ 2.33
$ 3.17 Weighted average shares outstanding – diluted
20,601 20,543 20,587
20,526
CONSOLIDATED BALANCE SHEETS
(in thousands) June
30, 2014 June 30,
2015 Assets Cash and cash equivalents $ 38,831 $ 47,593
Accounts receivable, net 185,773 178,519 Inventories 234,138
230,421 Other current assets 107,379 84,988 Total
current assets 566,121 541,521 Non-current assets 444,956
438,153 Total Assets $ 1,011,077 $ 979,674
Liabilities and Stockholders' Equity Bank lines of credit $
24,000 $ -- Current portion of long-term debt 2,819 2,801 Accounts
payable and accrued expenses 123,065 114,525 Deferred revenues
60,677 47,787 Other current liabilities 92,046 84,168
Total current liabilities 302,607 249,281 Long-term debt 10,436
8,556 Advances from customers 50,000 25,000 Deferred income taxes
73,161 65,435 Other long-term liabilities 42,660
49,623 Total liabilities 478,864 397,895 Total stockholders’ equity
532,213 581,779
Total Liabilities and Stockholders’
Equity
$ 1,011,077 $ 979,674
SEGMENT
INFORMATION (in thousands)
Three Months Ended June 30, Fiscal
Year Ended June 30,
2014
2015 2014 2015
Revenues – by Segment: (unaudited) Security Division
$ 141,691 $ 131,479 $ 440,439 $ 481,087 Healthcare Division 61,232
78,981 222,313 255,691 Optoelectronics and Manufacturing Division,
including intersegment revenues 70,496 67,960 284,496 267,872
Intersegment revenues elimination (13,315 ) (11,819 )
(40,506 ) (46,448 ) Total $ 260,104 $ 266,601
$ 906,742 $ 958,202
Operating income
(loss) – by Segment:
Security Division(1)
$ 18,517 $ 16,878 $ 59,501 $ 67,804
Healthcare Division(2)
7,183 13,408 18,495 24,666
Optoelectronics and Manufacturing
Division(3)
4,363 3,832 14,663 17,533
Corporate(4)
391 (3,707 ) (11,497 ) (17,455 ) Eliminations 317
517 133 (440 ) Total $ 30,771
$ 30,928 $ 81,295 $ 92,108
(1)
Includes restructuring and other charges
of $1.6 million and $1.2 million for the three months ended June
30, 2014 and 2015, respectively, and $6.7 million and $5.1 million
for the fiscal years ended June 30, 2014 and 2015,
respectively.
(2)
Includes restructuring and other charges
of $0.2 million for the three months ended June 30, 2015 and $2.0
million and $1.4 million for the fiscal years ended June 30, 2014
and 2015, respectively.
(3)
Includes restructuring and other charges
of $1.9 million for the three months ended June 30, 2015 and $1.4
million and $2.7 million for the fiscal years ended June 30, 2014
and 2015, respectively.
(4)
Includes restructuring and other charges
of $1.6 million and $0.1 million for the three months ended June
30, 2014 and 2015, respectively, and $1.9 million and $0.7 million
for the fiscal years ended June 30, 2014 and 2015,
respectively.
RECONCILIATION OF GAAP TO NON-GAAP NET
INCOME AND EARNINGS PER SHARE
(in thousands, except earnings per
share data)
Three Months Ended June 30, Fiscal Year Ended June
30, 2014 2015 2014
2015
Net
income
EPS
Net
income
EPS
Net
income
EPS
Net
income
EPS GAAP basis $ 22,126 $ 1.07 $
22,433 $ 1.09 $ 47,894 $ 2.33 $ 65,151 $ 3.17 Restructuring
and other charges, net of tax 2,326 0.12 2,546 0.13 8,817 0.43
7,222 0.36 Impact from election to accelerate depreciation
for tax purposes -- -- -- --
7,638 0.37 -- -- Non-GAAP basis $ 24,452 $
1.19 $ 24,979 $ 1.22 $ 64,349 $ 3.13 $ 72,373 $ 3.53
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150820005309/en/
OSI Systems, Inc.Ajay VashishatVice President, Business
Development12525 Chadron AveHawthorne, CA
90250310-349-2237avashishat@osi-systems.com
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