UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________
FORM 8-K
______________
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
DATE
OF REPORT (DATE OF EARLIEST EVENT REPORTED): January 27, 2016
______________
OSI SYSTEMS, INC.
(EXACT
NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
______________
DELAWARE
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000-23125
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330238801
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(STATE OR OTHER JURISDICTION OF
INCORPORATION)
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(COMMISSION FILE NUMBER)
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(IRS EMPLOYER IDENTIFICATION NO.)
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12525 CHADRON AVENUE HAWTHORNE, CA 90250
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(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES) (ZIP CODE)
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(310) 978-0516
(REGISTRANT’S
TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT.)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02.
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Results of Operations and Financial Condition.
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On January 27, 2016, we issued a press release announcing our financial
results for the quarter ended December 31, 2015. A copy of the press
release is attached hereto as Exhibit 99.1 and incorporated herein in
its entirety by this reference.
We are furnishing the information contained in this Item 2.02 (including
Exhibit 99.1). It shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall it be
deemed to be incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended.
Item 9.01.
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Financial Statements and Exhibits.
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Exhibit 99.1:
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Press Release of OSI Systems, Inc. dated January 27, 2016.
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SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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OSI SYSTEMS, INC.
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Date:
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January 27, 2016
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By:
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/s/ Alan Edrick
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Alan Edrick
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Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number
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Description
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99.1
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Press Release of OSI Systems, Inc. dated January 27, 2016.
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Exhibit 99.1
OSI
Systems Reports Second Quarter Fiscal 2016 Financial Results
HAWTHORNE, Calif.--(BUSINESS WIRE)--January 27, 2016--OSI Systems, Inc.
(NASDAQ: OSIS) today announced financial results for the fiscal quarter
ended December 31, 2015.
“We entered fiscal 2016 with expectations of a challenging first half
followed by a stronger second half. Though this is turning out to be
true, the challenges associated with the global economy proved to be
greater than anticipated leading to disappointing first half financial
results. Despite this, we are encouraged by our strong first half
bookings, which we believe positions us to rebound nicely in the second
half of fiscal 2016,” said Deepak Chopra, OSI Systems’ Chairman and CEO.
The Company reported revenues of $197 million for the second quarter of
fiscal 2016, a decrease of 23% as compared to the same period a year
ago. Net income for the second quarter of fiscal 2016 was $0.1 million,
or $0.01 per diluted share, compared to net income of $18.2 million, or
$0.89 per diluted share, for the second quarter of fiscal 2015.
Excluding the impact of impairment, restructuring and other charges, net
income for the second quarter of fiscal 2016 would have been $8.1
million, or $0.40 per diluted share, compared to net income of $19.7
million, or $0.96 per diluted share, for the comparable quarter of the
prior year.
For the six months ended December 31, 2015, the Company reported
revenues of $397 million, a decrease of 17% as compared to the same
period a year ago. Net income in this period was $10.9 million, or $0.53
per diluted share, compared to net income of $29.5 million, or $1.44 per
diluted share, in the same period a year ago. Excluding the impact of
impairment, restructuring and other charges, net income for the six
months ended December 31, 2015 would have been $19.0 million, or $0.93
per diluted share, compared to net income of $31.5 million, or $1.54 per
diluted share, for the comparable period in the prior year.
As of December 31, 2015, the Company’s backlog was approximately $695
million. During the second fiscal quarter, cash flow used in operations
was $5.3 million.
Mr. Chopra stated, “As expected, our Optoelectronics and Manufacturing
division sales decreased year over year. However, operational
improvements, together with a more favorable product mix and a migration
to more profitable customers, resulted in a 9.4% operating margin,
excluding the impact of impairment, restructuring and other charges.
This represented our fifth consecutive quarter of year-over-year
operating margin expansion.”
Mr. Chopra continued, “During the second quarter of the prior fiscal
year, our Security division revenues included approximately $39 million
from a Foreign Military Sale to the U.S. Department of Defense for use
in Iraq, creating a difficult comparison for the current fiscal year.
Our fiscal 2016 second quarter results were further impacted by the
deferral of revenue recognition for equipment shipped during the
quarter. As a result, we began the process of streamlining certain
functions in the Security division. Actions already completed are
expected to result in approximately $6 million of annual cost savings
with further opportunities being considered. Security division bookings
in the first half were up 272% over the prior year. These bookings,
together with the ramp up of our turnkey program in Albania and a solid
pipeline of opportunities, position the division well for a strong
second half weighted to the fourth quarter based upon the anticipated
timing of converting our backlog and opportunities into revenue.”
Mr. Chopra concluded, “During the second quarter, our Healthcare
division sales were well below expectations. A variety of factors
contributed to the performance. Management changes are in process to
ensure we have the right leadership in place in our Healthcare division.
Based upon a detailed review of our funnel of opportunities and product
portfolio, we are optimistic that our Healthcare division sales will
rebound during the second half of the fiscal year.”
Fiscal Year 2016 Outlook
Based on the information known as of today, the Company’s updated
current fiscal 2016 sales guidance is $900 million - $945 million and
earnings guidance is $2.95 to $3.20 per diluted share, excluding the
impact of impairment, restructuring and other charges. Actual sales and
diluted EPS could vary from this guidance including as a result of the
matters discussed under the “Forward-Looking Statements” section.
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous webcast
over the Internet beginning at 1:30pm PT (4:30pm ET), today to discuss
its results for the second quarter of fiscal 2016. 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 shortly after the conclusion of the
conference call until February 12, 2016. 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 '35653465’ 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 and provides related
services 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 in more than a dozen countries. The
Company 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-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, projections and
similar expressions concerning matters that are not historical facts and
are not guarantees of future performance. Forward-looking
statements 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 and growth in fiscal 2016. In addition, 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;
delays in customer programs; delays in revenue recognition related to
the timing of customer acceptance; unanticipated impacts of
sequestration and other provisions of the Budget Control Act of 2011 as
modified by the Bipartisan Budget Act of 2013; changes in domestic and
foreign government spending, budgetary, procurement and trade policies
adverse to the Company's businesses; unfavorable currency exchange rate
fluctuations; market acceptance of the Company's new and existing
technologies, products and services; the Company's ability to win new
business and convert any orders received to sales within the fiscal year
in accordance with the Company's operating plan; 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 ongoing investigations and
compliance reviews; contract and regulatory compliance matters, and
actions, if brought, resulting in judgments, settlements, fines,
injunctions, debarment or penalties, as well as 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 any forward-looking statements,
see the section entitled "Risk Factors" in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2015 and other risks
described in documents subsequently filed by the Company from time to
time with the Securities and Exchange Commission. All forward-looking
statements 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
in connection with requirements under federal securities laws.
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OSI SYSTEMS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(in thousands, except per share data)
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(unaudited)
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Three Months Ended
December 31,
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Six Months Ended
December 31,
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2014
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2015
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2014
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2015
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Revenues
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$
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257,829
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$
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197,339
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$
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476,226
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$
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397,389
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Cost of goods sold
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168,555
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129,275
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312,710
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261,354
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Gross profit
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89,274
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68,064
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163,516
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136,035
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Operating expenses:
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Selling, general and administrative
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47,894
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43,141
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92,076
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83,534
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Research and development
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13,240
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13,045
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25,910
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24,926
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Impairment, restructuring and other charges
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2,079
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11,097
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2,805
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11,097
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Total operating expenses
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63,213
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67,283
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120,791
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119,557
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Income from operations
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26,061
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781
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42,725
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16,478
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Interest expense and other, net
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(832
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)
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(623
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)
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(1,696
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)
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(1,417
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)
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Income before income taxes
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25,229
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158
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41,029
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15,061
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Provision for income taxes
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6,988
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50
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11,539
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4,148
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Net income
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$
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18,241
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$
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108
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$
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29,490
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$
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10,913
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Diluted earnings per share
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$
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0.89
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$
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0.01
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$
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1.44
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$
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0.53
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Weighted average shares outstanding – diluted
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20,487
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20,386
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20,506
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20,427
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CONSOLIDATED BALANCE SHEETS
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(in thousands)
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June 30, 2015
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December 31, 2015
(Unaudited)
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Assets
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Cash and cash equivalents
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$
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47,593
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$
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79,789
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Accounts receivable, net
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178,519
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157,799
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Inventories
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230,421
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280,600
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Other current assets
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84,988
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89,252
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Total current assets
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541,521
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607,440
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Non-current assets
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438,153
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402,951
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Total Assets
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$
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979,674
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$
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1,010,391
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Liabilities and Stockholders' Equity
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Bank lines of credit
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$
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--
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$
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55,000
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Current portion of long-term debt
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2,801
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2,752
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Accounts payable and accrued expenses
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114,525
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122,960
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Deferred revenues
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47,787
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36,609
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Other current liabilities
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84,168
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88,294
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Total current liabilities
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249,281
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305,615
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Long-term debt
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8,556
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7,257
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Deferred income taxes
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65,435
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65,582
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Other long-term liabilities
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74,623
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64,329
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Total liabilities
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397,895
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442,783
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Total stockholders’ equity
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581,779
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567,608
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Total Liabilities and Stockholders’ Equity
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$
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979,674
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$
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1,010,391
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SEGMENT INFORMATION
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(in thousands)
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(unaudited)
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Three Months Ended December 31,
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Six Months Ended
December 31,
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2014
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2015
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2014
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2015
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Revenues – by Segment:
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Security division
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$
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37,005
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$
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93,720
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$
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250,444
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$
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90,130
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Healthcare division
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69,493
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55,548
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117,327
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107,013
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Optoelectronics and Manufacturing division (including intersegment
revenues)
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65,535
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60,560
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134,621
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123,108
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Intersegment revenues eliminations
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(14,204
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)
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(12,489
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)
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(26,166
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)
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(22,862
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)
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Total
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$
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257,829
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$
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197,339
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$
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476,226
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$
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397,389
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Operating income (loss) – by Segment:
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Security division (1)
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$
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20,401
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$
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2,534
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$
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37,660
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$
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15,169
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Healthcare division (2)
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7,489
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3,380
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7,551
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6,318
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Optoelectronics and Manufacturing division (3)
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4,366
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3,192
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8,693
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8,753
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Corporate (4)
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(5,733
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)
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(7,903
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)
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(10,250
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)
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(13,105
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)
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Eliminations
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(462
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)
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(422
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)
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(929
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)
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(657
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)
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Total
|
|
$
|
26,061
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|
|
$
|
781
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|
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$
|
42,725
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|
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$
|
16,478
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|
|
|
|
|
|
|
|
|
|
|
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|
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(1)
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Includes impairment, restructuring and other charges of $1.7 million
and $1.8 million for the three and six months ended December 31,
2014, respectively, and $6.3 million for the three and six months
ended December 31, 2015, respectively.
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(2)
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Includes impairment, restructuring and other charges of $0.1 million
and $0.2 million for the three and six months ended December 31,
2014, respectively.
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(3)
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Includes impairment, restructuring and other charges of $0.1 million
and $0.2 million for the three months and six months ended December
31, 2014, respectively, and $2.5 million for the three and six
months ended December 31, 2015, respectively.
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(4)
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Includes impairment, restructuring and other charges of $0.2 million
and $0.6 million for the three months and six months ended December
31, 2014, respectively, and $2.3 million for both the three and six
months ended December 31, 2015.
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|
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|
Reconciliation of GAAP to Non-GAAP
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(in thousands, except earnings per share data)
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(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
|
Net income
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|
EPS
|
|
Net income
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|
EPS
|
|
Net income
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|
EPS
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Net income
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EPS*
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GAAP basis
|
|
$
|
18,241
|
|
$
|
0.89
|
|
$
|
108
|
|
$
|
0.01
|
|
$
|
29,490
|
|
$
|
1.44
|
|
$
|
10,913
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment, restructuring and other charges, net of tax
|
|
|
1,503
|
|
|
0.07
|
|
|
8,041
|
|
|
0.39
|
|
|
2,016
|
|
|
0.10
|
|
|
8,041
|
|
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basis
|
|
$
|
19,744
|
|
$
|
0.96
|
|
$
|
8,149
|
|
$
|
0.40
|
|
$
|
31,506
|
|
$
|
1.54
|
|
$
|
18,954
|
|
$
|
0.93
|
|
*
|
|
|
Due to rounding, the GAAP basis EPS of $0.53 plus the add-back EPS
of $0.39 equals $0.93.
|
CONTACT:
OSI Systems, Inc.
Ajay Vashishat
Vice
President, Business Development
Tel: (310) 349-2237
avashishat@osi-systems.com
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