OSI Systems Reports Third Quarter 2006 Financial Results
The Company reported revenues of $108.1 million for the third quarter
of fiscal 2006, an increase of 15% from the $94.2 million reported for
the third quarter of fiscal 2005. Net income for the third quarter of
fiscal 2006 was $1.0 million, or $0.06 per diluted share, compared to a
net loss of $2.9 million, or $0.18 per share, for the third quarter of
fiscal 2005. The third quarter results included stock based
compensation expenses of $1.5 million pre-tax, or $0.09 per diluted
share due to the adoption of FAS 123® on July 1, 2005. Results for
the third quarter of fiscal 2005 did not include stock-based
compensation expenses.
For the first nine months of fiscal 2006, revenues increased by
$42.8 million, or 15%, to $327.1 million, from $284.3 million for the
comparable period of fiscal 2005. For the first nine months of fiscal
2006, the Company reported a net loss of $3.1 million or $0.20 per
diluted share, compared to net income of $0.8 million or $0.05 per
share for the first nine months of fiscal 2005. For the first
nine months of fiscal 2006, the Company incurred stock based
compensation expenses of $4.1 million, or $0.25 per diluted share.
Results for the first nine months of fiscal 2005 did not include
stock-based compensation expenses.
OSI Chairman and CEO, Mr. Deepak Chopra stated, We are very pleased
with the Companys operating results for the third quarter of fiscal
2006. The Security business had record revenues of $36.4 million and
achieved profitability. We have received increased Cargo orders
bringing the total Cargo backlog to approximately $43 million at the
end of the third quarter. We also successfully launched our first
product in the Automated Hold Baggage Screening market, the Rapiscan
MVXR5000. We are committed to this market, as evidenced by the
continuing development of our revolutionary solid state CT system that
we call the RTT for Real Time Tomography. In the third quarter
we announced an order for the RTT from the Manchester Airport Group for
approximately $7 million with a customer option that if fully
exercised, would bring the total contract value to approximately $40
million. We expect to see continued growth for the Security business
into fiscal 2007 in all product lines; Conventional, Automated Hold
Baggage Screening and Cargo.
Mr. Chopra continued, In our Healthcare business we continued to
see strong performance in our core products, monitoring and
anaesthesia. For the first nine months of fiscal 2006 monitoring orders
were up 18% globally with the strongest performance coming from the
U.S., our largest market. We continue to capture our replacement cycle
business in addition to gaining market share from our competitors. We
expect to see continued organic growth for the business supplemented by
acquisitions of complementary products and technologies. We remain on
track to launch the anaesthesia product in the U.S. market in fiscal
2007.
Mr. Chopra concluded, Our Opto-Electronics business continues to
show strong results, fueled by the strong economy and strength in
growing Inter-Company sales to both to our Security and Healthcare
businesses.
Guidance for the Six Months Ended June 30, 2006
The Company reiterates its previously published guidance for the
second half of fiscal 2006 with revenue guidance of $231 million to
$236 million compared to revenues of $219 million for the first half of
fiscal 2006, and $194.9 million for the second half of fiscal 2005.
The Company anticipates that revenues and operating income will be
higher in the fourth quarter when compared to the third quarter of
fiscal 2006.
Segment Information
Security Business
The Security business reported revenues of $36.4 million for the third
quarter of fiscal 2006, an increase of 26% from $29.0 million reported
for the third quarter of fiscal 2005. Income from operations for the
third quarter of fiscal 2006 was $1.2 million compared to a loss from
operations of $4.1 million for the third quarter of fiscal 2005. The
third quarter results included stock based compensation expenses of
$0.2 million. Results for the third quarter of fiscal 2005 did not
include stock-based compensation expenses.
For the first nine months of fiscal 2006, revenues increased by $2.8
million, or 3%, to $93.8 million, from $91.0 million for the first nine
months of fiscal 2005. For the first nine months of fiscal 2006, the
business reported a loss from operations of $2.6 million, compared to a
loss from operations of $3.0 million for the first nine months of
fiscal 2005. For the first nine months of fiscal 2006, the Security
business incurred stock based compensation expenses of $0.7 million.
Results for the first nine months of fiscal 2005 did not include
stock-based compensation expenses.
Healthcare Business
The Healthcare business reported revenues of $49.4 million for the
third quarter of fiscal 2006, compared to $47.8 million reported for
the third quarter of fiscal 2005. Income from operations for the third
quarter of fiscal 2006 was $1.1 million compared to $0.9 million for
the third quarter of fiscal 2005. The third quarter results included
stock based compensation expenses of $0.6 million. Results for the
third quarter of fiscal 2005 did not include stock-based compensation
expenses.
For the first nine months of fiscal 2006, revenues increased by
$17.2 million to $161.8 million from $144.6 million for the first nine
months of fiscal 2005. For the first nine months of fiscal 2006, income
from operations increased by $2.2 million, or 27%, to $8.2 million,
from $6.0 million for the first nine months of fiscal 2005. For the
first nine months of fiscal 2006, the Healthcare business incurred
stock based compensation expenses of $1.1 million. Results for the
first nine months of fiscal 2005 did not include stock-based
compensation expenses.
Optoelectronics Business
The Optoelectronics business reported external revenues of $22.2
million for the third quarter of fiscal 2006, an increase of 28% from
$17.3 million reported for the third quarter of fiscal 2005. Income
from operations for the third quarter of fiscal 2006 was $3.6 million,
compared to $2.0 million for the third quarter of fiscal 2005.
The third quarter results included stock based compensation expenses of
$0.1 million. Results for the third quarter of fiscal 2005 did not
include stock-based compensation expenses.
For the first nine months of fiscal 2006, external revenues increased
by $22.8 million, or 47%, to $71.5 million form $48.7 million for the
first nine months of fiscal 2005. For the first nine months of fiscal
2006, income from operations increased by $1.8 million, to $7.4 million
from $5.6 million for the first nine months of fiscal 2005. For the
first nine months of fiscal 2006, the Optoelectronics business incurred
stock based compensation expenses of $0.4 million. Results for the
first nine months of fiscal 2005 did not include stock-based
compensation expenses.
Operating income was positively impacted by the continuing increase
of Inter-Company sales to both the Security and Healthcare
businesses. These sales are eliminated in consolidation; however,
it does not impact our segment disclosure.
Conference Call Information
OSI Systems, Inc. will host a conference call today over the
Internet beginning at 2:30 pm PT (5:30 pm ET), today to discuss these
results. To listen, please log on www.fulldisclosure.com or
www.osi-systems.com or www.fulldisclosure.com and follow the link that
will be posted on the front page. A replay of the webcast will be
available shortly after the presentation and will be archived on
www.osi-systems.com. A telephonic replay of the call will also be
available from 5:30pm PT on May 15th until May 22nd. The replay may be
accessed by calling 888-286-8010 and entering the conference call
identification number 33339020.
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 delivery products, and
optoelectronic-based components, as well as a provider of engineering
and manufacturing services. 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, Inc. 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.
For Further Information
OSI Systems Inc
12525 Chadron Ave
Hawthorne CA 90250
(310) 349 2237
Contact: Jeremy Norton Director of Investor Relations