OSI Systems, Inc. (NASDAQ:OSIS), a vertically integrated provider
of specialized electronics products for critical applications in
the Security and Healthcare industries, today announced operating
results for its third quarter and nine months ended March 31, 2007.
The Company reported revenues of $126.5 million for the third
quarter of fiscal 2007, an increase of 17% from the $108.1 million
reported for the third quarter of fiscal 2006. The net income for
the third quarter of fiscal 2007 was $3.6 million, or $0.21 per
diluted share, compared to net income of $1.0 million, or $0.06 per
diluted share, for the third quarter of fiscal 2006. For the nine
months ended March 31, 2007, the Company reported record revenues
of $379.5 million, an increase of $52.4 million, or 16%, from
$327.1 million for the first nine months of fiscal 2006. The net
loss for the first nine months of fiscal 2007 was ($23.0) million
or ($1.37) per diluted share, compared to a net loss of ($3.1)
million, or ($0.20) per diluted share, for the first nine months of
fiscal 2006. The financial results for the three and nine months
ended March 31, 2007 were favorably impacted by the settlement of a
dispute with GE related to the acquisition of Spacelabs Medical in
fiscal 2004. The settlement resulted in approximately $15.0 million
of pre-tax income, which has been recorded as other income. The
results were adversely impacted by a ($2.8) million fiscal third
quarter operating loss in the OSI Defense Systems business, which
is included in the Optoelectronics and Manufacturing division. In
the third quarter of fiscal 2007 the Company consolidated certain
manufacturing processes and facilities resulting in a pre-tax
restructuring charge of $2.2 million. These costs were directly
related to the Company�s previously announced plan to generate
approximately $15 - $17 million of pre-tax annualized cost savings
through the integration of recent acquisitions and the
rationalization of the Company�s cost structure. For the first nine
months of fiscal 2007, the Company has incurred impairment,
restructuring and other charges of approximately $34.0 million.
Including the aforementioned restructuring charges the company
incurred non-cash pre-tax charges of approximately $21.5 million
associated with the impairment of certain fixed and intangible
assets as well as the recording of $10.3 million of additional
inventory reserves, which is included in cost of goods sold. Deepak
Chopra, OSI Systems� Chairman and CEO, stated, �We continued our
positive top line momentum while our overall backlog increased to
record levels due to the strength of our Security bookings.
Improving our overall operating performance continues to be our top
priority. We expect the previously announced cost cutting measures
to be largely implemented by the end of the fiscal year.� The
Company�s backlog as of March 31, 2007 was $209 million compared to
$197 million as of December 31, 2006. The Security Division had a
backlog of approximately $124 million as of March 31, 2007 compared
to $115 million as of December 31, 2006. Forward-Looking Guidance
The Company reaffirms its previously published revenue guidance of
$535 - $545 million for the fiscal year ended June 30, 2007.
Conference Call Information OSI Systems, Inc. will host a
conference call and simultaneous webcast over the Internet
beginning at 9:00am PST (12:00pm EST), today to discuss its results
for the third quarter and first nine months of fiscal 2007. To
listen, please log on to www.fulldisclosure.com or
www.osi-systems.com 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 until May 21, 2007. 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 �71537634� 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. 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 size and effect of its cost-cutting
measures, steps being taken to improve profitability and future
revenues. 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 cost-cutting measures
will ultimately result in savings that are in line with current
expectations, that the Company will achieve profitability or that
future revenues 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 share
and per share data) � � Three Months Ended � Nine Months Ended �
March 31, � March 31, 2007� 2006� 2007� 2006� � � Revenues $
126,498� $ 108,092� $ 379,485� $ 327,100� Cost of goods sold
82,562� 65,019� 257,772� 201,932� Gross profit 43,936� 43,073�
121,713� 125,168� � Operating expenses: Selling, general and
administrative 36,199� 33,805� 110,531� 100,738� Research and
development 11,390� 8,851� 33,424� 26,281� Impairment,
restructuring, and other charges 2,226� -� 23,769� 800� Other
operating expenses 110� 51� 658� 624� Total operating expenses
49,925� 42,707� 168,382� 128,443� � Income (loss) from operations
(5,989) 366� (46,669) (3,275) � Interest expense (1,239) (236)
(3,520) (1,186) Interest income 85� 91� 322� 180� Other income /
(expense) 15,772� -� 15,772� 349� � Income (loss) before provision
for income taxes and minority interest 8,629� 221� (34,095) (3,932)
Provision (benefit) for income taxes 3,678� (820) (11,607) (1,816)
Minority interest (1,338) (30) (553) (976) Net income (loss) $
3,613� $ 1,011� $ (23,041) $ (3,092) � � Diluted income (loss) per
share $ 0.21� $ 0.06� $ (1.37) $ (0.20) � Weighted average shares
outstanding - diluted 17,237� 16,766� 16,779� 16,326� Condensed
Consolidated Balance Sheets (in thousands) � June 30, March 31,
2006� 2007� Assets Cash and cash equivalents $ 13,799� $ 18,787�
Accounts receivable, net 119,419� 120,134� Inventories 120,604�
121,702� Other current assets 29,477� 45,462� Total current assets
283,299� 306,085� Non-current assets 119,774� 126,704� Total $
403,073� $ 432,789� � Liabilities and Stockholders' Equity Bank
lines of credit $ 10,857� $ 16,358� Current portion of long-term
debt 1,251� 5,578� Accounts payable and accrued expenses 68,526�
71,910� Other current liabilities 40,509� 43,312� Total current
liabilities 121,143� 137,158� Long-term debt 5,483� 26,965� Other
long-term liabilities 17,769� 20,349� Total liabilities 144,395�
184,472� Minority interest 9,731� 9,723� Shareholders' equity
248,947� 238,594� Total $ 403,073� $ 432,789� SEGMENT INFORMATION
(in thousands) � Three Months Ended Nine Months Ended March 31,
March 31, 2007� 2006� 2007� 2006� � Revenues - by Segment Group:
Security Group $ 45,044� $ 36,446� $ 130,479� $ 93,787� Healthcare
Group 53,671� 49,429� 164,639� 161,799� Optoelectronics and
Manufacturing Group including intersegment revenues 37,200� 29,689�
111,068� 88,593� Intersegment revenues elimination (9,417) (7,472)
(26,701) (17,079) Total $ 126,498� $ 108,092� $ 379,485� $ 327,100�
� Operating income (loss) - by Segment Group: Security Group $ 527�
$ 1,230� $ (31,284) $ (2,614) Healthcare Group (3,381) 1,063�
(8,994) 8,159� Optoelectronics and Manufacturing Group 547� 3,608�
7,279� 7,391� Corporate (3,291) (5,293) (13,436) (16,002)
Eliminations (391) (242) (234) (209) Total $ (5,989) $ 366� $
(46,669) $ (3,275)
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