OSI Systems, Inc. (NASDAQ: OSIS) today announced financial
results for its fourth quarter and fiscal year ended June 30,
2009.
Deepak Chopra, OSI Systems Chairman and CEO, stated, “The
challenges of the global economy significantly impacted our sales
throughout fiscal 2009. However, we have viewed this economic
slowdown as an opportunity to adjust our cost structure to better
position ourselves for improved profitability and cash flow going
forward, while continuing to aggressively invest in product
development. As a result, despite economic pressure on our top
line, these significant reductions to our cost structure, coupled
with ongoing efficiency projects, resulted in strong earnings
growth and record free cash flow during fiscal 2009.”
The Company reported revenues of $139.1 million for the fourth
quarter of fiscal 2009, a decrease of 19% from the $171.2 million
reported for the fourth quarter of fiscal 2008. Without the adverse
impact of foreign exchange for the three months ended June 30,
2009, revenues would have decreased approximately 16%. Net income
for the fourth quarter of fiscal 2009 was $4.3 million, or $0.24
per diluted share, compared to net income of $5.5 million, or $0.31
per diluted share for the fourth quarter of fiscal 2008. Excluding
the impact of restructuring and other nonrecurring charges, net
income for the fourth quarter of fiscal 2009 would have been
approximately $5.1 million or $0.29 per diluted share compared to
net income of $6.5 million or $0.36 per diluted share for the
fourth quarter of fiscal 2008.
For the fiscal year ended June 30, 2009, the Company reported
revenues of $590.4 million, a decrease of 5% from the $623.1
million reported for fiscal 2008. Without the adverse impact of
foreign exchange for the twelve months ended June 30, 2009,
revenues would have decreased approximately 3%. Net income for
fiscal 2009 was $11.2 million, or $0.63 per diluted share, compared
to net income of $13.9 million, or $0.78 per diluted share in
fiscal 2008. During fiscal 2008, the Company was favorably impacted
by a one-time $4.3 million tax benefit in connection with a
transaction. Excluding the impact of restructuring and other
nonrecurring charges and this one-time tax benefit, net income for
fiscal 2009 would have been approximately $16.0 million, or $0.91
per diluted share compared to net income of $13.1 million or $0.74
per diluted share for the comparable period of fiscal 2008.
Discussion of adjustments to arrive at non-GAAP figures for the
three and twelve months ended June 30, 2009 is provided to allow
for the comparison of underlying earnings, net of restructuring and
other charges, and the one-time tax benefit, thus providing
additional insight into the on-going operations of the Company. For
the three months and fiscal year ended June 30, 2009 the Company
incurred restructuring and other charges of $1.1 million and $7.1
million, respectively, compared to $1.3 million and $4.7 million
for the comparable periods of fiscal 2008.
During fiscal 2009, the Company generated operating cash flow of
$44.5 million as compared to using $0.7 million during fiscal 2008.
Capital expenditures were $10.9 million and $12.1 million for
fiscal 2009 and 2008, respectively. Additionally, during fiscal
2009, the Company repurchased 620,000 shares of its common stock
for approximately $7.4 million.
Mr. Chopra continued, “Our Security Division had a very strong
fiscal 2009 as operating profits soared 167% from $5.4 million in
fiscal 2008 to $14.3 million in the current year. The improvement
in operating income was a result of increased sales coupled with
the realization of the operating efficiencies that we have been
working hard to achieve over the past two years. Sales in our
Security Division, excluding the adverse impact of foreign
exchange, improved by 11% compared to fiscal 2008. Our fiscal 2010
outlook is very positive as we have a robust pipeline both
domestically and internationally and we expect to see double digit
sales growth in our Security Division.”
Mr. Chopra concluded, “The business climate for our Healthcare
division continues to be challenging as fiscal 2009 sales,
excluding the adverse impact of foreign exchange, were off
approximately 14% from fiscal 2008. We continue to monitor market
conditions and believe that these issues are timing related as we
have not lost any significant sales opportunities. We expect that
the proactive measures we initiated throughout fiscal 2009 to
address our cost structure have positioned us for operating margin
expansion as Healthcare sales improve in fiscal 2010.”
As of June 30, 2009, the Company had a backlog of $203 million
compared to $212 million as of June 30, 2008.
Company Outlook – Guidance for Fiscal 2010
Subject to the risk factors referenced in the Safe Harbor
section of this press release, the Company announces that, for
fiscal 2010, it anticipates 15% - 30% growth in earnings per
diluted share to $1.05 to $1.18, excluding the impact of
impairment, restructuring and other non-recurring charges.
Alan Edrick, OSI Systems Executive Vice President and Chief
Financial Officer, said, “Our performance in fiscal 2009 marked the
continuation of a significant financial turnaround that has
emphasized earnings and cash flow. We will continue our ongoing
operational improvement initiatives, which we believe will result
in significant leverage to our bottom line. Our focus on generating
free cash flow was evident throughout the year and we anticipate
continued strength in fiscal 2010.”
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous
webcast over the Internet beginning at 9:00 am PDT (12:00 pm EDT)
today to discuss its financial results and its business outlook.
This conference call will contain forward looking information. To
listen to the call, 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 September 10, 2009. 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 ‘29816963’ when prompted for the replay code.
About OSI Systems, Inc.
OSI Systems, Inc. is a Hawthorne, California based diversified
global developer, manufacturer and seller of security and
inspection systems, medical monitoring and anesthesia products, and
optoelectronic devices and value-added subsystems. 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. OSI Systems 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-G
Safe Harbor Statement
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 earnings per share guidance for fiscal
2010 as well as its plans to achieve improved profitability and
cash flow. 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
continue to realize the benefit of operating efficiencies achieved
by its Security Division over the last two year or that the
business climate for its Healthcare division will improve in the
near future. Other important factors are set forth in the Company’s
Securities and Exchange Commission filings. All forward-looking
statements are current as of the date of this release, and the
Company undertakes no obligation to update any statement in light
of new information or future events.
OSI SYSTEMS, INC. AND
SUBSIDIARIES
Consolidated Statements of
Operations
(in thousands, except per share
data)
Three Months Ended June
30,
Year Ended June 30, 2008
2009 2008
2009 Revenue $ 171,173 $ 139,063
$ 623,088 $ 590,361 Cost of goods sold 111,631
91,497 404,049 388,910 Gross
profit 59,542 47,566 219,039 201,451 Operating expenses:
Selling, general and administrative 37,105 30,291 150,050 137,939
Research and development 11,852 9,408 45,361 36,862 Restructuring
and other charges 1,333 1,123
4,688 7,123 Total operating expenses
50,290 40,822 200,099
181,924 Income from operations 9,252 6,744 18,940
19,527 Interest expense, net (1,050 ) (595 )
(4,469 ) (2,936 ) Income before income taxes and
minority interest 8,202 6,149 14,471 16,591 Income tax
expense 2,556 1,844 579 5,393 Minority interest of net earnings of
consolidated subsidiaries 108 20 32 46
Net income $ 5,538 $ 4,285 $ 13,860 $ 11,152
Diluted income per share $ 0.31 $ 0.24
$ 0.78 $ 0.63 Weighted average shares
outstanding – diluted 18,142 17,630
17,735 17,596
Consolidated Balance
Sheets
(in thousands)
June 30, 2008
2009 Assets Cash and cash
equivalents $ 18,232 $ 25,172 Accounts receivable, net 156,781
110,453 Inventories 144,807 150,763 Other current assets
36,635 36,855 Total current assets 356,455 323,243
Non-current assets 151,186 151,585 Total assets $
507,641 $ 474,828
Liabilities and Stockholders'
Equity Bank lines of credit $ 18,657 $ 4,000 Current portion of
long-term debt 6,593 8,557 Accounts payable and accrued expenses
89,594 68,813 Other current liabilities 46,653 54,265
Total current liabilities 161,497 135,635 Long-term debt 49,091
39,803 Other long-term liabilities 17,804 22,310
Total liabilities 228,392 197,748 Minority interest 1,228 1,080
Shareholders' equity 278,021 276,000 Total
liabilities and stockholders’ equity $ 507,641 $ 474,828
Segment Information
(in thousands)
Three Months Ended June 30,
Year Ended June 30, 2008
2009 2008
2009 Revenues – by Segment
Group: Security Group $ 61,760 $ 58,672 $ 225,836 $ 240,919
Healthcare Group 68,645 49,362 256,695 214,260 Optoelectronics and
Manufacturing Group including intersegment revenues 53,130 42,685
187,624 181,123 Intersegment revenues elimination (12,362 )
(11,656 ) (47,067 ) (45,941 ) Total $ 171,173
$ 139,063 $ 623,088 $ 590,361
Operating income (loss) – by Segment Group: Security Group
(i) $ 3,725 $ 3,182 $ 5,365 $ 14,324 Healthcare Group (ii) 3,357
2,419 12,918 5,106 Optoelectronics and Manufacturing Group 4,567
3,258 13,114 14,501 Corporate (iii) (2,331 ) (2,021 ) (12,258 )
(13,844 ) Eliminations (66 ) (94 ) (199
)
(560 ) Total $ 9,252 $ 6,744 $ 18,940 $
19,527 (i) Includes non-recurring restructuring and
other charges of $0.2 million and $0.8 million for the three months
ended June 30, 2008 and 2009, respectively; and $2.3 million and
$1.3 million for the year ended June 30, 2008 and 2009,
respectively. (ii) Includes non-recurring restructuring and
other charges of $1.1 million and $0.1 million for the three months
ended June 30, 2008 and 2009, respectively; and $2.0 million and
$3.3 million for the year ended June 30, 2008 and 2009,
respectively.
(iii) Includes non-recurring
charges of $2.3 million during the year ended June 30, 2009.
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