- Q1 Revenues of $279 Million (10% year-over-year
increase)
- Q1 Earnings Per Diluted Share
- GAAP EPS of $1.04
- Non-GAAP EPS of $1.16 (9% year-over-year increase)
- Q1 Book-to-Bill Ratio of 1.6
- Q1 Backlog Increased to $1.2 Billion (15% increase from June
30, 2021)
- Company Reiterates FY 2022 Guidance
OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ:
OSIS) today announced financial results for the quarter ended
September 30, 2021.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive
Officer, stated, “Despite continuing impacts from COVID, including
supply chain and logistics challenges, the Company performed well
during the first quarter of fiscal 2022. We delivered strong
revenue and earnings growth as well as robust bookings, most
notably in our Security and Optoelectronics and Manufacturing
divisions, resulting in significant growth in backlog.”
The Company reported revenues of $279.3 million for the first
quarter of fiscal 2022, an increase of 10% from the $254.9 million
reported for the first quarter of fiscal 2021. Net income for the
first quarter of fiscal 2022 was $19.1 million, or $1.04 per
diluted share, compared to net income of $9.3 million, or $0.51 per
diluted share, for the first quarter of fiscal 2021. Non-GAAP net
income for the first quarter of fiscal 2022 was $21.2 million, or
$1.16 per diluted share, compared to non-GAAP net income for the
fiscal 2021 first quarter of $19.5 million, or $1.06 per diluted
share.
For the quarter ended September 30, 2021, the Company's
book-to-bill ratio was 1.6. As of September 30, 2021, the Company's
backlog was over $1.2 billion, representing an increase of 15% from
the Company’s backlog as of June 30, 2021. The Company’s cash used
in operations was $11.0 million during the first quarter of fiscal
2022 as the Company invested in inventory to support expected sales
growth and to mitigate supply chain risk. In addition, the timing
of cash used for other working capital purposes adversely impacted
first quarter operating cash flow. Capital expenditures were $3.5
million during the three months ended September 30, 2021.
Mr. Chopra commented, “We were pleased with the year-over-year
Security division sales growth of 11% in the first fiscal quarter
which was leveraged to 21% growth in adjusted operating income.
Strong bookings in Security that included two orders received from
the U.S. Customs and Border Protection totaling approximately $200
million led to a significant increase in our backlog. As many of
our customers and partners are impacted by the pandemic, we
continue to work through related challenges and are well positioned
in the global marketplace to capitalize on future
opportunities.”
Mr. Chopra continued, “Our Optoelectronics and Manufacturing
division again delivered solid results reporting record revenues,
representing 16% growth over the first quarter of last fiscal year,
and strong profits in light of supply chain and logistics cost
increases. Bookings were again robust, leading to record backlog in
the division.”
Mr. Chopra concluded, “First quarter sales in the Healthcare
division were solid. Given some tailwinds associated with the
earlier stages of the pandemic that boosted revenues in the prior
year, as anticipated, we reported a small reduction in
year-over-year revenues. We stepped up investment in new product
development to enhance our core product portfolio while
simultaneously investing in sales and marketing.”
Fiscal Year 2022 Outlook
Guidance
Revenues
$1.190 billion - $1.225
billion
Non-GAAP Diluted Earnings Per
Share
$5.72 - $6.00
The Company is reiterating its fiscal year 2022 revenues and
non-GAAP diluted earnings per share guidance. Actual revenues and
non-GAAP diluted earnings per share could vary from this guidance
due to factors discussed under “Forward-Looking Statements” or
other factors, including uncertainties as to the duration and
future scope of the COVID-19 pandemic.
The Company’s fiscal 2022 diluted earnings per share guidance is
provided on a non-GAAP basis only. The Company does not provide a
reconciliation of guidance for non-GAAP diluted EPS to GAAP diluted
EPS (the most directly comparable GAAP measure) on a
forward-looking basis because the Company is unable to provide a
meaningful or accurate compilation of reconciling items and certain
information is not available. This is due to the inherent
difficulty and complexity in accurately forecasting the timing and
amounts of various items included in the calculation of GAAP
diluted EPS but excluded in the calculation of non-GAAP diluted
EPS, such as acquisition costs and other non-recurring items that
have not yet occurred, are out of the Company’s control, or cannot
otherwise reasonably be predicted. For the same reasons, the
Company is unable to address the significance of unavailable
information which may be material and therefore could result in
GAAP diluted EPS, the most directly comparable GAAP financial
measure, being materially different from projected non-GAAP diluted
EPS.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net
income, non-GAAP diluted earnings per share, non-GAAP operating
income (loss) by segment and non-GAAP operating margin, all of
which are non-GAAP financial measures. The presentation of these
non-GAAP figures for the three months ended September 30, 2020 and
2021 is provided to allow for the comparison of the underlying
performance of the Company, net of impairment, restructuring and
other charges (including certain legal costs), amortization of
intangible assets acquired through business acquisitions and
non-cash interest expense primarily related to convertible debt in
fiscal 2021, and their associated tax effects, and the impact of
discrete income tax items. Although we exclude amortization of
acquired intangible assets from our non-GAAP figures, we believe
that it is important for investors to understand that revenue
generated from such intangibles is included within revenue in
determining non-GAAP financial measures of the Company. Management
believes that these non-GAAP financial measures provide (i)
enhanced insight into the ongoing operations of the Company, (ii)
meaningful information regarding the Company’s financial results
(excluding amounts management does not view as reflective of
ongoing operating results) for purposes of planning, forecasting,
and assessing the performance of the Company’s businesses, (iii) a
meaningful comparison of financial results of the current period
against results of past periods, and (iv) financial results that
are generally more comparable to financial results of peer
companies than are GAAP figures. Non-GAAP financial measures should
not be assessed in isolation or as a substitute for measures of
financial performance prepared in accordance with GAAP. These
non-GAAP measures may not be the same as measures used by other
companies due to possible differences in methods and in the items
or events for which adjustments are made.
Reconciliations of GAAP to non-GAAP financial information are
provided in the accompanying tables. The financial results
calculated in accordance with GAAP and reconciliations from those
financial results should be carefully evaluated.
Conference Call Information
The Company will host a conference call and simultaneous webcast
beginning at 9:00am PT (12:00pm ET) today to discuss its results
for the first quarter of fiscal 2022. To listen, please visit the
Investor Relations section of the 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 beginning shortly after the conclusion of the conference
call until November 12, 2021. The replay can either be accessed
through the Company’s website, www.osi-systems.com, or by
telephonic replay by calling 1-855-859-2056 and entering the
conference call identification number 9962318 when prompted for the
replay code.
About OSI Systems
OSI Systems is a vertically integrated designer and manufacturer
of specialized electronic systems and components for critical
applications in the homeland security, healthcare, defense and
aerospace industries. The Company combines more than 40 years of
electronics engineering and manufacturing experience with offices
and production facilities in more than a dozen countries to
implement a strategy of expansion into selective end-product
markets. For more information on OSI Systems or 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, and projections concerning matters that are
not historical facts. Forward-looking statements are not guarantees
of future performance and 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. Forward-looking statements include, but
are not limited to, information provided regarding expected
revenues, earnings, growth, operational performance and impact of
the COVID-19 pandemic in fiscal 2022 and beyond. 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; failure to secure the renewal of key customer contracts;
delays in customer programs; delays in revenue recognition related
to the timing of customer acceptance; changes in domestic and
foreign government spending and budgetary, procurement and trade
policies adverse to the Company's businesses; global economic
uncertainty; impact on the Company’s business related to or
resulting from the COVID-19 pandemic such as material delays and
cancellations of orders or deliveries thereon, supply chain
disruptions, plant closures, or other adverse impacts on the
Company’s ability to execute business plans; unfavorable currency
exchange rate fluctuations; effect of changes in tax legislation;
market acceptance of the Company's new and existing technologies,
products, and services; the Company's ability to win new business
and convert orders received to sales within the fiscal year;
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 investigations and compliance reviews; contract and
regulatory compliance matters, and actions which, if brought, could
result in judgments, settlements, fines, injunctions, debarment, or
penalties; and 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. Many of the
referenced risks could be amplified by the magnitude and duration
of the COVID-19 pandemic. For additional information on these and
other factors that could cause the Company's future results to
differ materially from those in any forward-looking statements, see
the section titled "Risk Factors" in the Company's most recently
filed Annual Report on Form 10-K and other risks described therein
and in documents subsequently filed by the Company from time to
time with the Securities and Exchange Commission. Undue reliance
should not be placed on forward-looking statements, which 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 under
federal securities laws.
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three Months Ended September
30,
2020
2021
Revenues:
Products
$
182,747
$
207,212
Services
72,161
72,045
Total revenues
254,908
279,257
Cost of goods sold:
Products
124,841
142,906
Services
34,316
37,021
Total cost of goods sold
159,157
179,927
Gross profit
95,751
99,330
Operating expenses:
Selling, general and administrative
58,617
57,323
Research and development
12,082
14,817
Impairment, restructuring and other
charges, net
8,359
2,510
Total operating expenses
79,058
74,650
Income from operations
16,693
24,680
Interest and other expense, net
(4,189
)
(2,016
)
Income before income taxes
12,504
22,664
Provision for income taxes
(3,160
)
(3,612
)
Net income
$
9,344
$
19,052
Diluted earnings per share
$
0.51
$
1.04
Weighted average shares outstanding –
diluted
18,335
18,306
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED SEGMENT
INFORMATION
(in thousands)
Three Months Ended September
30,
2020
2021
Revenues – by Segment:
Security division
$
134,775
$
149,517
Healthcare division
51,503
50,588
Optoelectronics and Manufacturing
division, including intersegment revenues
79,914
92,305
Intersegment eliminations
(11,284
)
(13,153
)
Total
$
254,908
$
279,257
Operating income (loss) – by
Segment:
Security division
$
8,906
$
21,593
Healthcare division
8,984
5,920
Optoelectronics and Manufacturing
division
8,740
9,783
Corporate
(9,456
)
(12,463
)
Intersegment eliminations
(481
)
(153
)
Total
$
16,693
$
24,680
OSI SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2021
September 30, 2021
Assets
Cash and cash equivalents
$
80,613
$
54,663
Accounts receivable, net
290,653
292,004
Inventories
294,208
320,673
Other current assets
43,930
62,870
Total current assets
709,404
730,210
Property and equipment, net
118,004
116,814
Goodwill
320,304
319,345
Intangible assets, net
127,608
127,262
Other non-current assets
109,047
117,008
Total Assets
$
1,384,367
$
1,410,639
Liabilities and Stockholders'
Equity
Bank lines of credit
$
--
$
26,000
Current portion of long-term debt
846
286,954
Accounts payable and accrued expenses
210,077
221,434
Other current liabilities
133,844
122,400
Total current liabilities
344,767
656,788
Long-term debt
276,421
692
Other long-term liabilities
123,359
129,847
Total liabilities
744,547
787,327
Total stockholders’ equity
639,820
623,312
Total Liabilities and Stockholders’
Equity
$
1,384,367
$
1,410,639
OSI SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP
NET INCOME AND EARNINGS PER
SHARE
(in thousands, except earnings
per share data)
Three Months Ended September
30,
2020
2021
Net income
Diluted EPS
Net income
Diluted EPS
GAAP basis
$
9,344
$
0.51
$
19,052
$
1.04
Impairment, restructuring and other
charges (benefit), net
8,359
0.46
2,510
0.14
Amortization of acquired intangible
assets
3,776
0.21
3,198
0.18
Non-cash interest expense
2,226
0.12
68
0.00
Tax effect of above adjustments
(3,946
)
(0.22
)
(1,467
)
(0.08
)
Impact from discrete income tax items
(276
)
(0.02
)
(2,145
)
(0.12
)
Non-GAAP basis
$
19,483
$
1.06
$
21,216
$
1.16
RECONCILIATION OF GAAP TO
NON-GAAP
OPERATING INCOME (LOSS) AND
OPERATING MARGIN BY SEGMENT
(in thousands, except
percentages)
Three Months Ended September
30, 2020
Security Division
Healthcare Division
Optoelectronics and
Manufacturing Division
Corporate /
Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
8,906
6.6
%
$
8,984
17.4
%
$
8,740
10.9
%
$
(9,937
)
$
16,693
6.5
%
Restructuring and other charges (benefit),
net
8,253
6.1
-
-
146
0.2
(40
)
8,359
3.3
Amortization of acquired intangible
assets
2,813
2.1
202
0.4
761
1.0
-
3,776
1.5
Non-GAAP basis– operating income
(loss)
$
19,972
14.8
%
$
9,186
17.8
%
$
9,647
12.1
%
$
(9,977
)
$
28,828
11.3
%
Three Months Ended September
30, 2021
Security Division
Healthcare Division
Optoelectronics and
Manufacturing Division
Corporate /
Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
21,593
14.4
%
$
5,920
11.7
%
$
9,783
10.6
%
$
(12,616
)
$
24,680
8.8
%
Impairment, restructuring and other
charges, net.
275
0.2
-
-
-
-
2,235
2,510
0.9
Amortization of acquired intangible
assets
2,286
1.6
202
0.4
710
0.8
-
3,198
1.2
Non-GAAP basis– operating income
(loss)
$
24,154
16.2
%
$
6,122
12.1
%
$
10,493
11.4
%
$
(10,381
)
$
30,388
10.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211028005321/en/
OSI Systems, Inc. Ajay Vashishat Vice President, Business
Development Tel: (310) 349-2237 avashishat@osi-systems.com
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