- Record Q4 Revenues of $412 Million (22% year-over-year
growth)
- Record Q4 Earnings Per Diluted Share
- GAAP EPS of $2.46 (27% year-over-year increase)
- Non-GAAP Adjusted EPS of $2.66 (36% year-over-year
increase)
- Record Quarter-End Backlog of $1.8 Billion (46% increase
from June 30, 2022)
- Company Provides Fiscal 2024 Guidance
- Sales Growth Guidance of >18%
- Non-GAAP Adjusted EPS Growth Guidance of >25%
OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ:
OSIS) today announced its financial results for the fourth quarter
and fiscal year ended June 30, 2023.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive
Officer, stated, “Our fourth quarter performance was stellar as
revenues grew by 22% and non-GAAP adjusted earnings per share
increased 36% year over year. Fourth quarter bookings were
outstanding, leading to record backlog as we concluded a noteworthy
fiscal year. We enter fiscal 2024 with great visibility and
momentum, and we are enthusiastic about our prospects for this
fiscal year.”
For the fourth quarter of fiscal 2023, the Company reported
revenues of $411.9 million, a 22% increase compared to the $336.8
million reported for the fourth quarter of fiscal 2022. Net income
for the fourth quarter of fiscal 2023 was $42.4 million, or $2.46
per diluted share, compared to net income in the fourth quarter of
fiscal 2022 of $33.8 million, or $1.94 per diluted share. Non-GAAP
net income for the fourth quarter of fiscal 2023 was $45.8 million,
or $2.66 per diluted share, compared to non-GAAP net income for the
fourth quarter of fiscal 2022 of $34.0 million, or $1.96 per
diluted share.
For the fiscal year ended June 30, 2023, revenues increased 8%
to $1.278 billion from $1.183 billion in the prior fiscal year. Net
income for fiscal 2023 was $91.8 million, or $5.34 per diluted
share, compared to net income for fiscal 2022 of $115.3 million,
which included a gain on sale of $27.4 million for a sale-leaseback
transaction, or $6.45 per diluted share. Non-GAAP net income for
the fiscal year ended June 30, 2023 was $106.7 million, or $6.21
per diluted share, compared with non-GAAP net income of $103.8
million, or $5.81 per diluted share, for the 2022 fiscal year.
As of June 30, 2023, the Company's backlog was $1.8 billion,
representing an increase of 46% from the Company’s backlog as of
June 30, 2022. During the quarter ended June 30, 2023, operating
cash flow was $22.1 million, compared to $22.0 million generated
for the same quarter of the prior year. Capital expenditures were
$3.1 million and $4.6 million for the three months ended June 30,
2023 and 2022, respectively.
Mr. Chopra commented, “We were pleased with our Security
division’s fourth quarter performance, marked by strong revenues,
operating income, and bookings. Revenues in the fourth quarter
increased 29% year over year, with growth across several product
lines, most significantly in our cargo and vehicle inspection
products. Our book-to-bill ratio of 2.4 underscores our industry
leadership position. With a record backlog and growing opportunity
pipeline, we believe we are well-positioned in the Security
division for fiscal 2024.”
Mr. Chopra continued, “Our Optoelectronics and Manufacturing
division delivered record Q4 revenues, which increased 11% year
over year, along with significant operating margin expansion. This
division continues to capitalize on our vertically integrated
structure and is well situated as we enter the new fiscal
year.”
Mr. Chopra concluded, “Our Healthcare division reported a solid
fourth quarter as revenues increased 18% leading to significant
operating margin expansion. The strong performance provides
momentum heading into fiscal 2024.”
Fiscal Year 2024 Outlook
For fiscal year 2024, the Company anticipates revenue growth in
excess of 18% over revenues in fiscal 2023 and non-GAAP adjusted
diluted earnings per share growth exceeding 25% compared to
non-GAAP adjusted diluted earnings per share for fiscal year 2023.
Actual revenues and adjusted diluted earnings per share could vary
from this guidance due to factors discussed under “Forward-Looking
Statements” or other factors.
The Company’s fiscal 2024 adjusted diluted earnings per share
guidance is provided on a non-GAAP basis only. The Company does not
provide a reconciliation of guidance for adjusted 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 adjusted 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 adjusted 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 and fiscal years ended June
30, 2022 and 2023 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, gain on sale of property in fiscal 2022, non-cash
interest expense, 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, revenue
generated from such intangibles is included within revenue in
determining non-GAAP financial performance of the Company.
Management believes that the non-GAAP financial measures presented
in this earnings release 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 financial information 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 2023 fourth quarter and fiscal year. To listen, please
visit the Investor Relations section of the OSI Systems website at
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 September 7, 2023. The replay can be accessed through
the Company’s website at www.osi-systems.com.
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 and 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, and operational performance in fiscal
2024 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;
the impact of potential information technology, cybersecurity or
data security breaches; changes in domestic and foreign government
spending and budgetary, procurement and trade policies adverse to
the Company's businesses; the impact of the Russia-Ukraine
conflict, including the potential for broad economic disruption;
global economic uncertainty; 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; unfavorable interest 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 current fiscal year; 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. 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 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 June
30,
Fiscal Year Ended June
30,
2022
2023
2022
2023
Net revenues:
Products
$
262,813
$
321,264
$
897,259
$
958,827
Services
74,008
90,606
285,977
319,600
Total net revenues
336,821
411,870
1,183,236
1,278,427
Cost of goods sold:
Products
176,713
218,575
608,990
676,772
Services
37,642
50,275
149,819
171,145
Total cost of goods sold
214,355
268,850
758,809
847,917
Gross profit
122,466
143,020
424,427
430,510
Operating expenses:
Selling, general and administrative
65,538
67,165
235,553
228,313
Research and development
14,639
15,504
59,583
59,352
Impairment, restructuring and other
charges, net
2,732
3,200
7,542
7,566
Total operating expenses
82,909
85,869
302,678
295,231
Income from operations
39,557
57,151
121,749
135,279
Interest and other expense, net
(2,428
)
(5,702
)
(8,962
)
(20,041
)
Other income, net
--
--
27,373
--
Income before income taxes
37,129
51,449
140,160
115,238
Provision for income taxes
(3,366
)
(9,068
)
(24,813
)
(23,460
)
Net income
$
33,763
$
42,381
$
115,347
$
91,778
Diluted earnings per share
$
1.94
$
2.46
$
6.45
$
5.34
Weighted average shares outstanding –
diluted
17,383
17,249
17,870
17,190
UNAUDITED SEGMENT
INFORMATION
(in thousands)
Three Months Ended June
30,
Fiscal Year Ended June
30,
2022
2023
2022
2023
Net revenues – by Segment:
Security division
$
209,081
$
269,103
$
663,160
$
760,291
Healthcare division
50,467
59,494
205,658
190,488
Optoelectronics and Manufacturing
division, including intersegment revenues
90,742
100,918
366,659
387,431
Intersegment eliminations
(13,469
)
(17,645
)
(52,241
)
(59,783
)
Total
$
336,821
$
411,870
$
1,183,236
$
1,278,427
Operating income (loss) – by
Segment:
Security division
$
38,461
$
49,009
$
98,784
$
115,023
Healthcare division
4,266
6,546
24,696
11,365
Optoelectronics and Manufacturing
division
10,688
10,717
45,030
46,680
Corporate
(14,095
)
(9,503
)
(46,950
)
(39,075
)
Intersegment eliminations
237
382
189
1,286
Total
$
39,557
$
57,151
$
121,749
$
135,279
OSI SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2022
June 30, 2023
Assets
Cash and cash equivalents
$
64,202
$
76,750
Accounts receivable, net
307,973
380,845
Inventories
333,907
338,008
Other current assets
40,062
44,300
Total current assets
746,144
839,903
Property and equipment, net
109,684
108,933
Goodwill
336,357
349,505
Intangible assets, net
138,370
140,857
Other non-current assets
112,595
116,488
Total assets
$
1,443,150
$
1,555,686
Liabilities and Stockholders'
Equity
Bank lines of credit
$
60,000
$
215,000
Current portion of long-term debt
244,575
8,076
Accounts payable and accrued expenses
194,266
202,777
Other current liabilities
115,113
145,841
Total current liabilities
613,954
571,694
Long-term debt
48,668
136,491
Other long-term liabilities
142,104
121,336
Total liabilities
804,726
829,521
Total stockholders’ equity
638,424
726,165
Total liabilities and stockholders’
equity
$
1,443,150
$
1,555,686
UNAUDITED 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,
2022
2023
2022
2023
Net income
EPS
Net income
EPS
Net income
EPS
Net income
EPS
GAAP basis
$
33,763
$
1.94
$
42,381
$
2.46
$
115,347
$
6.45
$
91,778
$
5.34
Impairment, restructuring and other
charges, net
2,732
0.16
3,200
0.19
7,542
0.42
7,566
0.44
Amortization of acquired intangible
assets
3,700
0.21
3,706
0.21
13,417
0.75
14,932
0.87
Non-cash interest expense
217
0.01
159
0.01
530
0.03
577
0.03
Gain on sale of property
--
--
--
--
(27,368
)
(1.53
)
--
--
Tax benefit of above adjustments
(1,485
)
(0.08
)
(1,425
)
(0.08
)
1,333
0.08
(5,267
)
(0.30
)
Discrete tax items
(4,942
)
(0.28
)
(2,198
)
(0.13
)
(6,965
)
(0.39
)
(2,844
)
(0.17
)
Non-GAAP basis
$
33,985
$
1.96
$
45,823
$
2.66
$
103,836
$
5.81
$
106,742
$
6.21
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP
OPERATING INCOME (LOSS) AND
OPERATING MARGIN BY SEGMENT
(in thousands, except
percentages)
Three Months Ended June 30,
2022
Security Division
Healthcare Division
Optoelectronics and Manufacturing
Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
38,461
18.4
%
$
4,266
8.5
%
$
10,688
11.8
%
$
(13,858
)
$
39,557
11.7
%
Impairment, restructuring and other
charges, net
14
0.0
%
-
-
100
0.2
%
2,618
2,732
0.8
%
Amortization of acquired intangible
assets
2,793
1.3
%
201
0.4
%
706
0.7
%
-
3,700
1.2
%
Non-GAAP basis– operating income
(loss)
$
41,268
19.7
%
$
4,467
8.9
%
$
11,494
12.7
%
$
(11,240
)
$
45,989
13.7
%
Three Months Ended June 30,
2023
Security Division
Healthcare Division
Optoelectronics and Manufacturing
Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
49,009
18.2
%
$
6,546
11.0
%
$
10,717
10.6
%
$
(9,121
)
$
57,151
13.9
%
Impairment, restructuring and other
charges, net
357
0.1
%
324
0.6
%
2,460
2.4
%
59
3,200
0.8
%
Amortization of acquired intangible
assets
2,627
1.0
%
302
0.5
%
777
0.8
%
-
3,706
0.9
%
Non-GAAP basis– operating income
(loss)
$
51,993
19.3
%
$
7,172
12.1
%
$
13,954
13.8
%
$
(9,062
)
$
64,057
15.6
%
Fiscal Year Ended June 30, 2022
Security Division
Healthcare Division
Optoelectronics and Manufacturing
Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
98,784
14.9
%
$
24,696
12.0
%
$
45,030
12.3
%
$
(46,761
)
$
121,749
10.3
%
Impairment, restructuring and other
charges, net
1,275
0.2
%
-
-
100
0.0
%
6,167
7,542
0.7
%
Amortization of acquired intangible
assets
9,778
1.5
%
806
0.4
%
2,833
0.8
%
-
13,417
1.1
%
Non-GAAP basis– operating income
(loss)
$
109,837
16.6
%
$
25,502
12.4
%
$
47,963
13.1
%
$
(40,594
)
$
142,708
12.1
%
Fiscal Year Ended June 30,
2023
Security Division
Healthcare Division
Optoelectronics and Manufacturing
Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
115,023
15.1
%
$
11,365
6.0
%
$
46,680
12.0
%
$
(37,789
)
$
135,279
10.6
%
Impairment, restructuring and other
charges, net
1,715
0.2
%
3,077
1.6
%
2,507
0.7
%
267
7,566
0.5
%
Amortization of acquired intangible
assets
11,114
1.5
%
973
0.5
%
2,845
0.7
%
-
14,932
1.2
%
Non-GAAP basis– operating income
(loss)
$
127,852
16.8
%
$
15,415
8.1
%
$
52,032
13.4
%
$
(37,522
)
$
157,777
12.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230824596349/en/
OSI Systems, Inc. Ajay Vashishat Vice President, Business
Development Tel: (310) 349-2237 avashishat@osi-systems.com
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