OSI Systems Reports Third Quarter Fiscal 2015 Financial Results
-
Record Q3 Revenue of
$215 million -
Q3 Earnings Per Diluted Share
-
Record Non-GAAP EPS of
$0.78 (11% increase over prior year) -
GAAP EPS of
$0.64 (176% increase over prior year)
-
Record Non-GAAP EPS of
"We are pleased to announce our third quarter financial results," said
The Company reported revenues of
For the nine months ended
As of
Fourth Quarter Fiscal Year 2015 Outlook
Subject to the risks described herein, the Company is updating its
guidance and reducing its outlook for fiscal 2015 revenues and non-GAAP
earnings per diluted share. The Company currently anticipates fiscal
2015 sales to be between
Presentation of Non-GAAP Financial Measures; Non-GAAP Figures
This earnings release includes a presentation of Adjusted EBITDA,
non-GAAP net income and diluted earnings per share, and discussion of
free cash flow, all of which are non-GAAP financial measures. Adjusted
EBITDA is defined as net income, plus net interest expense, provision
for income taxes and depreciation and amortization, as further adjusted
to eliminate the impact of stock-based compensation, and restructuring
and other charges. Not all companies use identical calculations and,
accordingly, the Company's presentation of Adjusted EBITDA may not be
comparable to similarly titled measures of other companies. Adjusted
EBITDA is not a recognized term under accounting principles generally
accepted in
Discussion of adjustments to arrive at non-GAAP net income and diluted
earnings per share figures and Adjusted EBITDA for the three and nine
month periods ended
This earnings release also discusses Free Cash Flow, which the Company defines as cash provided by operating activities less capital expenditures for property and equipment. We believe that this metric is useful to investors as a measure of cash generated by business operations that can be used to repay debt obligations, to invest in future growth through new business development activities or acquisitions and to repurchase stock of the Company, among other items. Reconciliations of GAAP to non-GAAP net income and diluted earnings per share, net income to Adjusted EBITDA, and cash provided by operating activities to Free Cash Flow are provided in the accompanying tables.
Conference Call Information
About
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. Such statements include, but are not
limited to, information provided regarding expected revenues, earnings
and growth in fiscal 2015. 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; 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
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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2014 | 2015 | 2014 | 2015 | |||||||||||||||||||||
Revenues | $ | 203,956 | $ | 215,375 | $ | 646,638 | $ | 691,601 | ||||||||||||||||
Cost of goods sold | 133,449 | 142,771 | 427,246 | 455,481 | ||||||||||||||||||||
Gross profit | 70,507 | 72,604 | 219,392 | 236,120 | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative expenses | 39,399 | 37,970 | 127,169 | 130,046 | ||||||||||||||||||||
Research and development | 10,579 | 12,559 | 32,774 | 38,469 | ||||||||||||||||||||
Restructuring and other charges | 2,507 | 3,620 | 8,925 | 6,425 | ||||||||||||||||||||
Total operating expenses | 52,485 | 54,149 | 168,868 | 174,940 | ||||||||||||||||||||
Income from operations | 18,022 | 18,455 | 50,524 | 61,180 | ||||||||||||||||||||
Interest expense and other, net | (1,370 | ) | (812 | ) | (4,343 | ) | (2,508 | ) | ||||||||||||||||
Income before income taxes | 16,652 | 17,643 | 46,181 | 58,672 | ||||||||||||||||||||
Provision for income taxes | 11,851 | 4,415 | 20,413 | 15,954 | ||||||||||||||||||||
Net income | $ | 4,801 | $ | 13,228 | $ | 25,768 | $ | 42,718 | ||||||||||||||||
Diluted earnings per share | $ | 0.23 | $ | 0.64 | $ | 1.25 | $ | 2.08 | ||||||||||||||||
Weighted average shares outstanding - diluted | 20,548 | 20,529 | 20,585 | 20,515 | ||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS (in thousands) |
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|
(Unaudited)
|
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Assets | |||||||||||||||
Cash and cash equivalents | $ | 38,831 | $ | 49,041 | |||||||||||
Accounts receivable, net | 185,773 | 165,352 | |||||||||||||
Inventories | 234,138 | 265,415 | |||||||||||||
Other current assets | 120,488 | 101,063 | |||||||||||||
Total current assets | 579,230 | 580,871 | |||||||||||||
Non-current assets | 444,956 | 425,059 | |||||||||||||
Total assets | $ | 1,024,186 | $ | 1,005,930 | |||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||
Bank lines of credit | $ | 24,000 | $ | 6,000 | |||||||||||
Current portion of long-term debt | 2,819 | 2,814 | |||||||||||||
Accounts payable and accrued expenses | 130,437 | 144,418 | |||||||||||||
Deferred revenues | 60,677 | 48,997 | |||||||||||||
Other current liabilities | 92,046 | 83,185 | |||||||||||||
Total current liabilities | 309,979 | 285,414 | |||||||||||||
Long-term debt | 10,436 | 9,028 | |||||||||||||
Advances from customers | 50,000 | 31,250 | |||||||||||||
Deferred income taxes | 73,161 | 68,280 | |||||||||||||
Other long-term liabilities | 48,397 | 54,696 | |||||||||||||
Total liabilities | 491,973 | 448,668 | |||||||||||||
Total stockholders' equity | 532,213 | 557,262 | |||||||||||||
Total liabilities and stockholders' equity | $ | 1,024,186 | $ | 1,005,930 | |||||||||||
SEGMENT INFORMATION (in thousands) (Unaudited) |
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Three Months Ended
|
Nine Months Ended
|
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2014 | 2015 | 2014 | 2015 | ||||||||||||
Revenues - by Segment: | |||||||||||||||
Security division | $ | 95,007 | $ | 99,164 | $ | 298,748 | $ | 349,608 | |||||||
Healthcare division | 52,188 | 59,383 | 161,081 | 176,710 | |||||||||||
Optoelectronics and Manufacturing division including intersegment revenues | 66,331 | 65,291 | 214,000 | 199,912 | |||||||||||
Intersegment revenues elimination | (9,570 | ) | (8,463 | ) | (27,191 | ) | (34,629 | ) | |||||||
Total | $ | 203,956 | $ | 215,375 | $ | 646,638 | $ | 691,601 | |||||||
Operating income (loss) - by Segment: | |||||||||||||||
Security division(1) |
$ | 14,213 | $ | 13,266 | $ | 40,984 | $ | 50,926 | |||||||
Healthcare division(2) |
4,084 | 3,707 | 11,312 | 11,258 | |||||||||||
Optoelectronics and Manufacturing division(3) |
3,414 | 5,008 | 10,300 | 13,701 | |||||||||||
Corporate(4) |
(3,488 | ) | (3,498 | ) | (11,888 | ) | (13,748 | ) | |||||||
Eliminations | (201 | ) | (28 | ) | (184 | ) | (957 | ) | |||||||
Total | $ | 18,022 | $ | 18,455 | $ | 50,524 | $ | 61,180 | |||||||
(1) |
Includes restructuring and other charges of |
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(2) |
Includes restructuring and other charges of |
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(3) |
Includes restructuring and other charges of |
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(4) |
Includes restructuring and other charges of $ |
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Reconciliation of GAAP to Non-GAAP Net Income and Earnings Per Share (in thousands, except earnings per share data) (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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2014 | 2015 | 2014 | 2015 | |||||||||||||||||||||||||||||||||||||
Net income |
EPS |
Net income |
EPS |
Net income |
EPS |
Net income |
EPS | |||||||||||||||||||||||||||||||||
GAAP basis | $ | 4,801 | $ | 0.23 | $ | 13,228 | $ | 0.64 | $ | 25,768 | $ | 1.25 | $ | 42,718 | $ | 2.08 | ||||||||||||||||||||||||
Restructuring and other charges, net of tax | 1,873 | 0.10 | 2,714 | 0.14 | 6,456 | 0.32 | 4,678 | 0.23 | ||||||||||||||||||||||||||||||||
Impact from election to accelerate depreciation for tax purposes | 7,638 | 0.37 | - | - | 7,638 | 0.37 | - | - | ||||||||||||||||||||||||||||||||
Non-GAAP basis | $ | 14,312 | $ | 0.70 | $ | 15,942 | $ | 0.78 | $ | 39,862 | $ | 1.94 | $ | 47,396 | $ | 2.31 | ||||||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA (in thousands) (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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2014 | 2015 | 2014 | 2015 | |||||||||||||||||
Net income | $ | 4,801 | $ | 13,228 | $ | 25,768 | $ | 42,718 | ||||||||||||
Interest expense, net | 1,370 | 812 | 4,343 | 2,514 | ||||||||||||||||
Provision for income taxes | 11,851 | 4,415 | 20,413 | 15,954 | ||||||||||||||||
Depreciation and amortization | 13,608 | 13,366 | 40,024 | 45,448 | ||||||||||||||||
EBITDA | 31,630 | 31,821 | 90,548 | 106,634 | ||||||||||||||||
Stock-based compensation | 3,254 | 6,057 | 13,975 | 18,135 | ||||||||||||||||
Restructuring and other charges | 2,507 | 3,620 | 8,925 | 6,425 | ||||||||||||||||
Adjusted EBITDA | $ | 37,391 | $ | 41,498 | $ | 113,448 | $ | 131,194 | ||||||||||||
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (in thousands) (Unaudited) |
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Three Months Ended
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Nine Months Ended
|
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Cash provided by operating activities | $ | 26,746 | $ | 87,696 | |||||||||||||
Less acquisition of property and equipment | (3,664 | ) | (10,113 | ) | |||||||||||||
Free cash flow | $ | 23,082 | $ | 77,583 | |||||||||||||
Vice President,
Business Development
Tel:
310-349-2237
avashishat@osi-systems.com
Source:
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