OSI Systems Reports Fiscal 2019 First Quarter Financial Results
- Record Q1 Revenue of
$266.2 Million (4% increase over prior year) - Q1 Earnings Per Diluted Share
- GAAP EPS of
$0.50 - Non-GAAP EPS of
$0.81
- GAAP EPS of
- Backlog of
$1.035 Billion (22% year-over-year increase) - Company Raises Guidance for Fiscal Year 2019 Sales and Non-GAAP Diluted EPS
The Company reported revenues of
During the quarter ended
Mr. Chopra commented, “Our Security division achieved record first
quarter revenues of
Mr. Chopra continued, “Our Optoelectronics and Manufacturing division performed well as sales increased 20% over the same prior-year period, inclusive of acquisitions. A strong mix of revenues and operational execution led to significant year-over-year operating margin expansion.”
Mr. Chopra concluded, “Although we were disappointed by the financial results in our Healthcare division, we remain dedicated to improving our competitive position. We are focused on enhancing our core products, developing new products, and growing the supplies and accessories business.”
Fiscal Year 2019 Outlook
The Company is raising its fiscal year 2019 sales guidance to a range of
The Company’s fiscal 2019 diluted earnings per share guidance is provided on a non-GAAP basis only. The Company does not provide a reconciliation of non-GAAP diluted EPS guidance 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 that would be excluded from GAAP diluted EPS, including, for example, acquisition costs and other non-recurring items that have not yet occurred, are out of the Company’s control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of unavailable information which may be material and therefore could result in GAAP diluted EPS, the corresponding GAAP financial measure, being materially less than projected non-GAAP diluted EPS.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income,
non-GAAP 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 the
three months ended
Reconciliations of GAAP 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
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 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 performance in fiscal 2019. 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; failure to secure the renewal of key customer contracts;
delays in customer programs; delays in revenue recognition related to
the timing of customer acceptance; unanticipated impacts of
sequestration and other
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(in thousands, except per share data) |
||||||||
Three Months Ended |
||||||||
2017 | 2018 | |||||||
Revenue: | ||||||||
Products | $ | 165,653 | $ | 182,480 | ||||
Services | 91,480 | 83,769 | ||||||
Total revenues | 257,133 | 266,249 | ||||||
Cost of goods sold: | ||||||||
Products | 114,180 | 125,371 | ||||||
Services | 51,682 | 44,965 | ||||||
Total cost of goods sold | 165,862 | 170,336 | ||||||
Gross profit | 91,271 | 95,913 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 55,647 | 61,707 | ||||||
Research and development | 15,100 | 13,753 | ||||||
Restructuring and other charges | 1,130 | 4,196 | ||||||
Total operating expenses | 71,877 | 79,656 | ||||||
Income from operations | 19,394 | 16,257 | ||||||
Interest and other expense, net | (4,249 | ) | (5,332 | ) | ||||
Income before income taxes | 15,145 | 10,925 | ||||||
Provision for income taxes | (4,988 | ) | (1,523 | ) | ||||
Net income | $ | 10,157 | $ | 9,402 | ||||
Diluted income per share | $ | 0.52 | $ | 0.50 | ||||
Weighted average shares outstanding – diluted | 19,591 | 18,736 | ||||||
UNAUDITED SEGMENT INFORMATION |
||||||||
(in thousands) |
||||||||
Three Months Ended |
||||||||
2017 | 2018 | |||||||
Revenues – by Segment: | ||||||||
Security division | $ | 162,245 | $ | 169,960 | ||||
Healthcare division | 45,529 | 38,273 | ||||||
Optoelectronics and Manufacturing division, including intersegment revenues | 58,926 | 70,954 | ||||||
Intersegment eliminations | (9,567 | ) | (12,938 | ) | ||||
Total | $ | 257,133 | $ | 266,249 | ||||
Operating income (loss) – by Segment: | ||||||||
Security division | $ | 22,693 | $ | 23,050 | ||||
Healthcare division | 847 | (1,875 | ) | |||||
Optoelectronics and Manufacturing division | 5,175 | 6,825 | ||||||
Corporate | (8,753 | ) | (11,351 | ) | ||||
Intersegment eliminations | (568 | ) | (392 | ) | ||||
Total | $ | 19,394 | $ | 16,257 | ||||
OSI SYSTEMS, INC. AND SUBSIDIARIES | ||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(in thousands) | ||||||
June 30, 2018 | September 30, 2018 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 84,814 | $ | 86,411 | ||
Accounts receivable, net | 210,744 | 222,170 | ||||
Inventories | 313,552 | 343,974 | ||||
Other current assets | 41,587 | 49,468 | ||||
Total current assets | 650,697 | 702,023 | ||||
Property and equipment, net | 115,524 | 119,764 | ||||
Goodwill | 292,213 | 304,717 | ||||
Intangible assets | 142,001 | 145,230 | ||||
Other non-current assets | 55,256 | 56,194 | ||||
Total Assets | $ | 1,255,691 | $ | 1,327,928 | ||
Liabilities and Stockholders' Equity | ||||||
Bank lines of credit | $ | 113,000 | $ | 166,000 | ||
Current portion of long-term debt | 2,262 | 2,326 | ||||
Accounts payable and accrued expenses | 194,815 | 204,947 | ||||
Other current liabilities | 133,245 | 137,724 | ||||
Total current liabilities | 443,322 | 510,997 | ||||
Long-term debt | 248,980 | 250,958 | ||||
Other long-term liabilities | 73,953 | 78,671 | ||||
Total liabilities | 766,255 | 840,626 | ||||
Total stockholders’ equity | 489,436 | 487,302 | ||||
Total Liabilities and Stockholders’ Equity | $ | 1,255,691 | $ | 1,327,928 | ||
RECONCILIATION OF GAAP TO NON-GAAP | ||||||||||||||||
NET INCOME AND EARNINGS PER SHARE | ||||||||||||||||
(in thousands, except earnings per share data) |
||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||
2017 | 2018 | |||||||||||||||
Net income | EPS | Net income | EPS | |||||||||||||
GAAP basis | $ | 10,157 | $ | 0.52 | $ | 9,402 | $ | 0.50 | ||||||||
Restructuring and other charges | 1,130 | 0.06 | 4,196 | 0.22 | ||||||||||||
Amortization of acquired intangible assets | 3,542 | 0.18 | 4,168 | 0.22 | ||||||||||||
Non-cash interest expense | 1,804 | 0.09 | 1,926 | 0.10 | ||||||||||||
Tax effect of above adjustments | (1,831 | ) | (0.10 | ) | (2,887 | ) | (0.15 | ) | ||||||||
Impact from discrete income tax items | 707 | 0.04 | (1,542 | ) | (0.08 | ) | ||||||||||
Non-GAAP basis | $ | 15,509 | $ | 0.79 | $ | 15,263 | $ | 0.81 | ||||||||
RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||||||
OPERATING INCOME (LOSS) AND OPERATING MARGIN BY SEGMENT | |||||||||||||||||||||||||||||
(in thousands, except percentages) |
|||||||||||||||||||||||||||||
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||
Security Division | Healthcare Division | Optoelectronics and Manufacturing Division | Corporate / Elimination | Total | |||||||||||||||||||||||||
% of Sales | % of Sales | % of Sales | % of Sales | ||||||||||||||||||||||||||
GAAP basis – operating income (loss) | $ | 22,693 | 14.0 | % | $ | 847 | 1.9 | % | $ | 5,175 | 8.8 | % | $ | (9,321 | ) | $ | 19,394 | 7.5 | % | ||||||||||
Restructuring and other charges | 310 | 0.2 | % | - | - | - | - | 820 | 1,130 | 0.5 | % | ||||||||||||||||||
Amortization of acquired intangible assets | 3,162 | 1.9 | % | 14 | 0.0 | % | 366 | 0.6 | % | - | 3,542 | 1.4 | % | ||||||||||||||||
Non-GAAP basis– operating income (loss) | $ | 26,165 | 16.1 | % | $ | 861 | 1.9 | % | $ | 5,541 | 9.4 | % | $ | (8,501 | ) | $ | 24,066 | 9.4 | % | ||||||||||
|
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Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||||
Security Division | Healthcare Division | Optoelectronics and Manufacturing Division | Corporate / Elimination | Total | |||||||||||||||||||||||||
% of Sales | % of Sales | % of Sales | % of Sales | ||||||||||||||||||||||||||
GAAP basis – operating income (loss) | $ | 23,050 | 13.6 | % | $ | (1,875 | ) | -4.9 | % | $ | 6,825 | 9.6 | % | $ | (11,743 | ) | $ | 16,257 | 6.1 | % | |||||||||
Restructuring and other charges, net | 46 | 0.0 | % | 191 | 0.5 | % |
374 |
0.6 |
% |
3,585 | 4,196 | 1.6 | % | ||||||||||||||||
Amortization of acquired intangible assets | 3,099 | 1.8 | % | - | - | 1,069 | 1.5 | % | - | 4,168 | 1.5 | % | |||||||||||||||||
Non-GAAP basis– operating income (loss) | $ | 26,195 | 15.4 | % | $ | (1,684 | ) | -4.4 | % | $ | 8,268 |
11.7 |
% |
$ | (8,158 | ) | $ | 24,621 | 9.2 | % | |||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181025005906/en/
Source:
OSI Systems, Inc.
Ajay Vashishat
Vice President,
Business Development
(310) 349-2237
avashishat@osi-systems.com