OSI Systems (NASDAQ:OSIS)
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OSI Systems, Inc. (NASDAQ:OSIS), a vertically integrated provider of
specialized electronics products for critical applications in the
Security and Healthcare industries, today announced its financial
results for its first quarter ended September 30, 2008.
The Company reported revenues of $148.2 million for the first quarter of
fiscal 2009, an increase of 13% from the $131.0 million reported for the
first quarter of fiscal 2008. Net income for the first quarter of fiscal
2009 was $0.1 million, or $0.01 per diluted share, compared to a net
loss of $(2.1) million, or $(0.12) per diluted share for the first
quarter of fiscal 2008.
The results for the first quarter ended September 30, 2008 and the prior
comparable period of fiscal 2008 included non-recurring restructuring
charges of $0.8 million compared to $0.1 million for the comparable
period of fiscal 2008.
Excluding the impact of the aforementioned non-recurring charges, net
income for the first quarter of fiscal 2009 would have been
approximately $0.7 million or $0.04 per diluted share compared to a net
loss of $(2.0) million or $(0.12) per diluted share for the first
quarter of fiscal 2008. These non-GAAP figures are provided to allow for
the comparison of underlying earnings, net of non-recurring charges,
providing insight into the on-going operations of the Company.
The Company’s backlog as of September 30,
2008, was approximately $231 million, compared to $212 million as of
June 30, 2008. For the comparable period, the backlog for the Company’s
Security division increased by $26 million to $141 million. For the
first quarter of fiscal 2009, the Company generated cash flow from
operations of $14.7 million and capital expenditures were $2.2 million,
as compared to cash flow from operations using $3.6 million and capital
expenditures of $2.6 million during the first quarter of fiscal 2008.
Deepak Chopra, OSI Systems’ Chairman and CEO,
stated, “Revenue growth for the first quarter
was driven primarily by strong performances in our Security and
Optoelectronics divisions which grew 20% and 23% respectively. For the
quarter our Security division achieved record bookings of approximately
$94 million improving our backlog to near record levels.
Mr. Chopra continued, “For the quarter, sales
in our Healthcare division declined 3% when compared to the first
quarter of the prior fiscal year. The decline was a direct result of the
tightening credit markets within North America causing customers to
delay planned orders. Internationally, however, our Healthcare division
sales remain strong. We continue to be diligent in monitoring the market
conditions within North America as it relates to our Healthcare division
and have begun to implement proactive measures to address our overall
cost structure.
Mr. Chopra concluded, “Within our Security
division we have made significant announcements of late. Firstly, we
were awarded a $3 million contract for air cargo inspection systems.
This was the first contract award we have received related to the U.S.
government mandate for 100% inspection of all air cargo by August 2010.
Additionally, today we announced receipt of an approximate $6 million
development and delivery contract from the TSA for our next generation
high-speed CT system for checked baggage screening.”
Company Outlook – Guidance for Fiscal 2009
Due to significant levels of economic uncertainty within the credit
markets in North America, the Company is unable to provide guidance for
fiscal 2009 and as such has withdrawn its previously published guidance
for fiscal 2009.
Alan Edrick, Executive Vice President and CFO, stated, “We
remain confident in our long run business fundamentals. While our
healthcare division has been impacted by economic conditions in the
Unites States and the challenging credit markets, we are moving quickly
to address our overall cost structure. Overall our liquidity
position remains strong and in the first quarter we generated $12.5
million of free cash flow, a record for the Company.”
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous webcast
over the Internet beginning at 9:00 a.m. PT (12:00 p.m. ET) today to
discuss its financial and business results for the first quarter of
fiscal 2009. The conference call will contain forward looking
information. To listen, please log on to www.fulldisclosure.com
or the investor relations section of the OSI Systems website (http://investors.osi-systems.com/index.cfm).
A replay of the webcast will be available shortly after the conclusion
of the conference call until November 13, 2008. The replay can either be
accessed through the Company’s website or via
telephonic replay by calling 1-888-286-8010 and entering the conference
call identification number ‘40344917’
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 in the homeland security, healthcare, defense and aerospace
industries. We combine more than 30 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 Inc.
or any of its subsidiary companies, visit www.osi-systems.com.
News Filter: OSIS-G
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 effects of steps being taken to improve
profitability as well as the Company’s
guidance regarding future revenues 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 achieve profitability or that future revenue or
earnings predictions will ultimately prove accurate. 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 Ended September 30,
2007
2008
Revenue
$
131,013
$
148,161
Cost of goods sold
86,903
98,526
Gross profit
44,110
49,635
Operating expenses:
Selling, general and administrative
36,211
37,571
Research and development
9,729
10,213
Impairment, restructuring, and other charges
85
801
Total operating expenses
46,025
48,585
Income (loss) from operations
(1,915
)
1,050
Interest expense, net
(1,089
)
(895
)
Income (loss) before provision for income taxes and minority interest
(3,004
)
155
Provision (benefit) for income taxes
(1,055
)
53
Minority interest of net earnings (losses) of consolidated
subsidiaries
(118
)
30
Net income (loss)
(2,067
)
132
Diluted income (loss) per share
$
(0.12
)
$
0.01
Weighted average shares outstanding –
diluted
17,171
18,166
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30,
September 30,
2008
2008
Assets
Cash and cash equivalents
$
18,232
$
21,048
Accounts receivable, net
156,781
137,116
Inventories
144,807
148,599
Other current assets
36,635
42,030
Total current assets
356,455
348,793
Non-current assets
151,186
149,455
Total
$
507,641
$
498,248
Liabilities and Stockholders' Equity
Bank lines of credit
$
18,657
$
9,000
Current portion of long-term debt
6,593
7,094
Accounts payable and accrued expenses
89,594
82,373
Other current liabilities
46,653
58,156
Total current liabilities
161,497
156,623
Long-term debt
49,091
46,541
Other long-term liabilities
17,804
19,095
Total liabilities
228,392
222,259
Minority interest
1,228
1,198
Shareholders' equity
278,021
274,791
Total liabilities and stockholders’ equity
$
507,641
$
498,248
SEGMENT INFORMATION
(in thousands)
(unaudited)
Three Months Ended September 30,
2007
2008
Revenues – by Segment Group:
Security Group
$
48,805
$
58,685
Healthcare Group
56,598
54,827
Optoelectronics and Manufacturing Group including intersegment
revenues
36,372
44,882
Intersegment revenues elimination
(10,762
)
(10,233
)
Total
131,013
148,161
-
-
Operating income (loss) – by Segment
Group:
Security Group
$
(696
)
$
3,048
Healthcare Group
1,051
(1,824
)
Optoelectronics and Manufacturing Group
1,339
3,863
Corporate
(3,479
)
(4,215
)
Eliminations
(130
)
178
Total
$
(1,915
)
$
1,050