OSI Systems Reports Fiscal 2020 First Quarter Financial Results
- Record Q1 Revenue of
$291 Million (9% increase over prior year) - Record Q1 Earnings Per Diluted Share
- GAAP EPS of
$1.10 - Non-GAAP EPS of
$0.91
- GAAP EPS of
- Company Raises FY 2020 Guidance
The Company reported revenues of
As of
Mr. Chopra commented, “Our Security division started the year strong, achieving 11% sales growth resulting in record first quarter revenues of
Mr. Chopra continued, “Our Optoelectronics and Manufacturing division continued in the last fiscal quarter to perform well as we leveraged sales growth of 4% to significant year-over-year operating margin expansion driven by a strong mix of revenues and operational execution.”
Mr. Chopra concluded, “Our Healthcare division revenues for the first fiscal quarter of 2020 increased 5% over the same prior-year period. With the benefit of the organizational changes we implemented in fiscal 2019 coupled with strong contribution margins, the operating income in our Healthcare division significantly improved over the prior-year first quarter. We remain focused on enhancing our core products and developing new products.”
Fiscal Year 2020 Outlook
The Company is raising its fiscal year 2020 sales guidance to a range of
The Company’s fiscal 2020 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 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, such as 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 different from 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 operational performance in fiscal 2020. 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
OSI SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
||||||||
|
Three Months Ended September 30, |
|||||||
|
2018 |
|
2019 |
|||||
|
|
|
|
|||||
Revenue: |
|
|
|
|||||
Products |
$ |
182,480 |
|
|
$ |
209,761 |
|
|
Services |
83,769 |
|
|
81,091 |
|
|||
Total revenues |
266,249 |
|
|
290,852 |
|
|||
Cost of goods sold: |
|
|
|
|||||
Products |
125,371 |
|
|
146,342 |
|
|||
Services |
44,965 |
|
|
45,299 |
|
|||
Total cost of goods sold |
170,336 |
|
|
191,641 |
|
|||
Gross profit |
95,913 |
|
|
99,211 |
|
|||
Operating expenses: |
|
|
|
|||||
Selling, general and administrative |
61,707 |
|
|
62,177 |
|
|||
Research and development |
13,753 |
|
|
14,246 |
|
|||
Restructuring and other charges (benefit), net |
4,196 |
|
|
(2,099 |
) |
|||
Total operating expenses |
79,656 |
|
|
74,324 |
|
|||
Income from operations |
16,257 |
|
|
24,887 |
|
|||
Interest and other expense, net |
(5,332 |
) |
|
(4,736 |
) |
|||
Income before income taxes |
10,925 |
|
|
20,151 |
|
|||
(Provision) benefit for income taxes |
(1,523 |
) |
|
592 |
|
|||
Net income |
$ |
9,402 |
|
|
$ |
20,743 |
|
|
|
|
|
|
|||||
Diluted income per share |
$ |
0.50 |
|
|
$ |
1.10 |
|
|
Weighted average shares outstanding – diluted |
18,736 |
|
|
18,903 |
|
|||
OSI SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED SEGMENT INFORMATION (in thousands) |
||||||||
|
Three Months Ended September 30, |
|||||||
|
2018 |
|
2019 |
|||||
Revenues – by Segment: |
|
|
|
|||||
Security division |
$ |
169,960 |
|
|
$ |
188,964 |
|
|
Healthcare division |
38,273 |
|
|
40,208 |
|
|||
Optoelectronics and Manufacturing division, including intersegment revenues |
70,954 |
|
|
73,637 |
|
|||
Intersegment eliminations |
(12,938 |
) |
|
(11,957 |
) |
|||
Total |
$ |
266,249 |
|
|
$ |
290,852 |
|
|
|
|
|
|
|||||
Operating income (loss) – by Segment: |
|
|
|
|||||
Security division |
$ |
23,050 |
|
|
$ |
20,318 |
|
|
Healthcare division |
(1,875 |
) |
|
2,817 |
|
|||
Optoelectronics and Manufacturing division |
6,825 |
|
|
8,769 |
|
|||
Corporate |
(11,351 |
) |
|
(7,337 |
) |
|||
Intersegment eliminations |
(392 |
) |
|
320 |
|
|||
Total |
$ |
16,257 |
|
|
$ |
24,887 |
|
OSI SYSTEMS, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
|||||
|
June 30, 2019 |
|
September 30, 2019 |
||
Assets |
|
|
|
||
|
|
|
|
||
Cash and cash equivalents |
$ |
96,316 |
|
$ |
85,142 |
Accounts receivable, net |
238,440 |
|
245,093 |
||
Inventories |
273,711 |
|
268,761 |
||
Other current assets |
32,432 |
|
38,140 |
||
Total current assets |
640,899 |
|
637,136 |
||
Property and equipment, net |
127,385 |
|
128,293 |
||
Goodwill |
307,108 |
|
306,713 |
||
Intangible assets |
132,954 |
|
129,633 |
||
Other non-current assets |
56,518 |
|
88,327 |
||
Total Assets |
$ |
1,264,864 |
|
$ |
1,290,102 |
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
||
|
|
|
|
||
Bank lines of credit |
$ |
88,000 |
|
$ |
95,000 |
Current portion of long-term debt |
804 |
|
801 |
||
Accounts payable and accrued expenses |
169,718 |
|
176,280 |
||
Other current liabilities |
123,486 |
|
122,621 |
||
Total current liabilities |
382,008 |
|
394,702 |
||
Long-term debt |
257,752 |
|
260,007 |
||
Other long-term liabilities |
73,377 |
|
93,829 |
||
Total liabilities |
713,137 |
|
748,538 |
||
Total stockholders’ equity |
551,727 |
|
541,564 |
||
Total Liabilities and Stockholders’ Equity |
$ |
1,264,864 |
|
$ |
1,290,102 |
OSI SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP |
||||||||||||||||||
|
Three Months Ended September 30, |
|||||||||||||||||
|
2018 |
|
2019 |
|||||||||||||||
|
Net income |
|
Diluted EPS |
|
Net income |
|
Diluted EPS |
|
||||||||||
GAAP basis |
$ |
9,402 |
|
|
$ |
0.50 |
|
|
$ |
20,743 |
|
|
$ |
1.10 |
|
|
||
Restructuring and other charges (benefit), net |
|
4,196 |
|
|
|
0.22 |
|
|
|
(2,099 |
) |
|
|
(0.11 |
) |
|
||
Amortization of acquired intangible assets |
|
4,168 |
|
|
|
0.22 |
|
|
|
3,597 |
|
|
|
0.19 |
|
|
||
Non-cash interest expense |
|
1,926 |
|
|
|
0.10 |
|
|
|
2,163 |
|
|
|
0.11 |
|
|
||
Tax effect of above adjustments |
|
(2,887 |
) |
|
|
(0.15 |
) |
|
|
(1,021 |
) |
|
|
(0.05 |
) |
|
||
Impact from discrete income tax items |
|
(1,542 |
) |
|
|
(0.08 |
) |
|
|
(6,214 |
) |
|
|
(0.33 |
) |
|
||
Non-GAAP basis |
$ |
15,263 |
|
|
$ |
0.81 |
|
|
$ |
17,169 |
|
|
$ |
0.91 |
|
|
||
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME (LOSS) AND OPERATING MARGIN BY SEGMENT (in thousands, except percentages) |
|||||||||||||||||||||||||||||||
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 |
|
|
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 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Three Months Ended September 30, 2019 |
|||||||||||||||||||||||||||||||
|
|
Security Division |
|
Healthcare Division |
|
Optoelectronics and Manufacturing Division |
|
Corporate / Elimination |
|
Total |
|||||||||||||||||||||
|
|
|
|
% of Sales |
|
|
|
% of Sales |
|
|
|
% of Sales |
|
|
|
|
|
% of Sales |
|||||||||||||
GAAP basis – operating income (loss) |
|
$ |
20,318 |
|
10.8 |
% |
|
$ |
2,817 |
|
|
7.0 |
% |
|
$ |
8,769 |
|
|
11.9 |
% |
|
$ |
(7,017 |
) |
|
$ |
24,887 |
|
|
8.6 |
% |
Restructuring and other (benefit), net |
|
|
- |
|
- |
|
|
|
- |
|
|
- |
|
|
|
(13 |
) |
|
0.0 |
|
|
|
(2,086 |
) |
|
|
(2,099 |
) |
|
(0.7 |
) |
Amortization of acquired intangible assets |
|
|
2,800 |
|
1.5 |
|
|
|
- |
|
|
- |
|
|
|
797 |
|
|
1.1 |
|
|
|
- |
|
|
|
3,597 |
|
|
1.2 |
|
Non-GAAP basis– operating income (loss) |
|
$ |
23,118 |
|
12.2 |
% |
|
$ |
2,817 |
|
|
7.0 |
% |
|
$ |
9,553 |
|
|
13.0 |
% |
|
$ |
(9,103 |
) |
|
$ |
26,385 |
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005938/en/
Source:
OSI Systems, Inc.
Ajay Vashishat
Vice President, Business Development
Tel: (310) 349-2237
avashishat@osi-systems.com