- Record Fiscal Q1 Revenues of $344 Million (23% growth
year-over-year)
- Q1 Earnings Per Diluted Share
- GAAP EPS of $1.05
- Record Q1 Non-GAAP Adjusted EPS of $1.25
- Q1 Operating Income Growth of 34% Year-Over-Year
- Q1-Ended Backlog of Approximately $1.8 Billion
- Company Increases Fiscal 2025 Revenues and Non-GAAP Adjusted
Diluted EPS Guidance
OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ:
OSIS) today announced its financial results for the first quarter
of fiscal 2025.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive
Officer, stated “We are pleased to kick off fiscal 2025 with a
strong first quarter in which we posted record Q1 revenues and
non-GAAP earnings per share led again by outstanding growth in the
Security division. Given our robust backlog and high visibility
into the opportunity pipeline, we anticipate a strong fiscal
year.”
For Q1 FY25, the Company reported revenues of $344.0 million, a
23% increase over the $279.2 million reported for the same quarter
of the prior year. Net income for Q1 FY25 was $17.9 million, or
$1.05 per diluted share, compared to net income of $12.9 million,
or $0.75 per diluted share, for the same quarter of the prior year.
Non-GAAP net income for Q1 FY25 was $21.3 million, or $1.25 per
diluted share, compared to non-GAAP net income for the same quarter
of the prior year of $15.6 million, or $0.91 per diluted share.
The Company's backlog was approximately $1.8 billion as of
September 30, 2024, compared to approximately $1.7 billion as of
June 30, 2024. For Q1 FY25, net cash used in operating activities
was $37.2 million, driven primarily by increases in working capital
to support planned future growth. Capital expenditures were $7.7
million and depreciation and amortization was $11.5 million for Q1
FY25. The Company repurchased 531,314 shares during Q1 FY25 for an
aggregate cost of approximately $80 million.
Mr. Chopra commented, “The Security division results reflect
continuing strong momentum with heightened demand for our product
and service offerings, as well as our superior competitive
position. The Security division’s revenues in the first quarter of
fiscal 2025 increased 36% year-over-year, leading to significant
operating income growth and year-over-year adjusted operating
margin expansion. During the quarter, we acquired a business that
provides critical military, space and surveillance solutions, which
is expected to be complementary to our sales channel. Security
bookings were solid and we ended the quarter with near-record
backlog in this division. This provides us significant confidence
that the Security division is well-positioned for the future.”
Mr. Chopra continued, “Our Optoelectronics and Manufacturing
division delivered solid quarterly results, reporting
year-over-year revenue growth despite certain customers continuing
to adjust inventory levels and purchasing patterns. The division
continues to benefit from our global manufacturing footprint with
exposure across multiple end markets.”
Mr. Chopra concluded, “During the first quarter of fiscal 2025,
we saw improved margins in the Healthcare division on a comparable
level of revenues with the same quarter of the prior year. We
continue to focus on new product development, principally in our
patient monitoring portfolio.”
In July 2024 the Company issued $350 million of convertible
senior notes due in fiscal 2030 at an interest rate of 2.25%. The
net proceeds of the issuance were partially used to reduce the
outstanding balance under the Company’s revolving credit facility
and to repurchase shares of common stock.
Fiscal Year 2025 Outlook
Current Updated
Guidance
Previous Guidance
Revenues
$1.670 billion - $1.695
billion
$1.620 billion - $1.650
billion
Growth Rate
8.5% - 10.2%
5.3% - 7.2%
Non-GAAP Adjusted Diluted Earnings Per
Share
$9.00 - $9.30
$8.80 - $9.15
Growth Rate
10.7% - 14.4%
8.2% - 12.5%
The Company is increasing its fiscal 2025 revenues and non-GAAP
adjusted diluted earnings per share guidance. 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 2025 adjusted diluted earnings per share
guidance is provided on a non-GAAP basis only. The Company does not
provide a reconciliation of guidance for non-GAAP 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 non-GAAP 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 non-GAAP
adjusted diluted EPS.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net
income, non-GAAP adjusted 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 all fiscal periods 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, 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 Q1 FY25. 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 November 10, 2024. 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
2025 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
or conflicts in the Middle East, 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
September 30,
2023
2024
Revenues:
Products
$
199,709
$
255,808
Services
79,501
88,199
Total net revenues
279,210
344,007
Cost of goods sold:
Products
136,983
170,422
Services
43,482
52,083
Total cost of goods sold
180,465
222,505
Gross profit
98,745
121,502
Operating expenses:
Selling, general and administrative
59,798
72,223
Research and development
15,922
17,773
Restructuring and other charges, net
466
1,178
Total operating expenses
76,186
91,174
Income from operations
22,559
30,328
Interest and other expense, net
(5,748)
(7,359)
Income before income taxes
16,811
22,969
Provision for income taxes
(3,932)
(5,033)
Net income
$
12,879
$
17,936
Diluted earnings per share
$
0.75
$
1.05
Weighted average shares outstanding –
diluted
17,175
17,055
UNAUDITED SEGMENT
INFORMATION
(in thousands)
Three Months Ended
September 30,
2023
2024
Revenues – by Segment:
Security division
$
164,629
$
224,314
Optoelectronics and Manufacturing
division, including intersegment revenues
96,128
97,795
Healthcare division
37,787
37,102
Intersegment eliminations
(19,334)
(15,204)
Total
$
279,210
$
344,007
Operating income (loss) – by
Segment:
Security division
$
20,609
$
28,856
Optoelectronics and Manufacturing
division
11,437
10,609
Healthcare division
164
800
Corporate
(9,916)
(9,510)
Intersegment eliminations
265
(427)
Total
$
22,559
$
30,328
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2024
September 30, 2024
Assets
Cash and cash equivalents
$
95,353
$
85,053
Accounts receivable, net
648,155
687,610
Inventories
397,939
456,030
Prepaid expenses and other current
assets
74,077
81,310
Total current assets
1,215,524
1,310,003
Property and equipment, net
113,967
124,613
Goodwill
351,480
381,444
Intangible assets, net
139,529
183,222
Other non-current assets
115,508
114,232
Total Assets
$
1,936,008
$
2,113,514
Liabilities and Stockholders'
Equity
Bank lines of credit
$
384,000
$
259,000
Current portion of long-term debt
8,167
8,217
Accounts payable and accrued expenses
248,427
269,067
Other current liabilities
174,043
176,252
Total current liabilities
814,637
712,536
Long-term debt
129,383
468,084
Other long-term liabilities
128,505
146,399
Total liabilities
1,072,525
1,327,019
Total stockholders’ equity
863,483
786,495
Total Liabilities and Stockholders’
Equity
$
1,936,008
$
2,113,514
RECONCILIATION OF GAAP TO
NON-GAAP
NET INCOME AND EARNINGS PER
SHARE
(in thousands, except earnings
per share data)
Three Months Ended September
30,
2023
2024
Net income
Diluted EPS
Net income
Diluted EPS
GAAP basis
$
12,879
$
0.75
$
17,936
$
1.05
Restructuring and other charges, net
466
0.02
1,178
0.07
Amortization of acquired intangible
assets
3,707
0.22
3,867
0.23
Non-cash interest expense
-
-
-
-
Tax effect of above adjustments
(1,079
)
(0.06
)
(1,211
)
(0.07
)
Discrete tax benefit
(413
)
(0.02
)
(482
)
(0.03
)
Non-GAAP basis
$
15,560
$
0.91
$
21,288
$
1.25
RECONCILIATION OF GAAP TO
NON-GAAP
OPERATING INCOME (LOSS) AND
OPERATING MARGIN BY SEGMENT
(in thousands, except
percentages)
Three Months Ended September
30, 2023
Security Division
Optoelectronics and Manufacturing
Division
Healthcare Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
20,609
12.5%
$
11,437
11.9%
$
164
0.4%
$
(9,651)
$
22,559
8.1%
Restructuring and other charges, net
272
0.2%
51
0.1%
-
0.0%
143
466
0.2%
Amortization of acquired intangible
assets
2,627
1.6%
779
0.8%
301
0.8%
-
3,707
1.3%
Non-GAAP basis– operating income
(loss)
$
23,508
14.3%
$
12,267
12.8%
$
465
1.2%
$
(9,508)
$
26,732
9.6%
Three Months Ended September
30, 2024
Security Division
Optoelectronics and Manufacturing
Division
Healthcare Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
28,856
12.9%
$
10,609
10.8%
$
800
2.2%
$
(9,937)
$
30,328
8.8%
Restructuring and other charges, net
479
0.2%
547
0.6%
152
0.4%
-
1,178
0.3%
Amortization of acquired intangible
assets
2,986
1.3%
580
0.6%
301
0.8%
-
3,867
1.2%
Non-GAAP basis– operating income
(loss)
$
32,321
14.4%
$
11,736
12.0%
$
1,253
3.4%
$
(9,937)
$
35,373
10.3%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241024089255/en/
For Additional Information,
Contact:
OSI Systems, Inc. Ajay Vashishat Vice President, Business
Development Tel: (310) 349-2237 avashishat@osi-systems.com
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