OSI Systems Reports Fourth Quarter and Fiscal Year 2008 Financial Results
HAWTHORNE, Calif., Aug 27, 2008 (BUSINESS WIRE) -- OSI Systems, Inc. (NASDAQ: OSIS) today announced financial results for its fourth quarter and fiscal year ended June 30, 2008.
The Company reported record revenues of $171.2 million for the fourth quarter of fiscal 2008, an increase of 12% from the $152.8 million reported for the fourth quarter of fiscal 2007. Net income for the fourth quarter of fiscal 2008 was $5.5 million, or $0.31 per diluted share, compared to net income of $4.3 million, or $0.24 per diluted share for the fourth quarter of fiscal 2007.
For the fiscal year ended June 30, 2008, the Company reported record revenues of $623.1 million, an increase of 17% from the $532.3 million reported for fiscal 2007. Net income for fiscal 2008 was $13.9 million, or $0.78 per diluted share, compared to a net loss of ($18.8) million, or ($1.12) per diluted share in fiscal 2007.
The results for the three months and fiscal year ended June 30, 2008 and the prior comparable periods of fiscal 2007 include the following non-recurring items:
-- For the three months and fiscal year ended June 30, 2008 the Company incurred impairment, restructuring and other charges of $1.3 million and $4.7 million, respectively, compared to $2.3 million and $36.4 million for the comparable periods of fiscal 2007. The $36.4 million of impairment, restructuring and other charges in fiscal 2007 includes $10.3 million of inventory reserves, which was recorded in cost of goods sold.
-- The results for the fiscal year ended June 30, 2008 were favorably impacted by a $4.3 million tax benefit associated with the repurchase of the minority interest in Spacelabs Healthcare. Additionally, the results for fiscal 2007 were favorably impacted by a gain of $15 million, recorded as other income, resulting from a settlement related to the Company's acquisition of Spacelabs Medical in fiscal 2004.
Excluding the impact of the aforementioned non-recurring items and applying the full year effective tax rate, net income for the fourth quarter of fiscal 2008 would have been approximately $6.4 million or $0.36 per diluted share compared to net income of $2.8 million or $0.16 per diluted share for the fourth quarter of fiscal 2007 and net income for fiscal 2008 would have been approximately $13.1 million, or $0.74 per diluted share compared to a net loss of $(5.0) million or $(0.30) per diluted share for the comparable period of fiscal 2007. These non-GAAP figures are provided to allow for the comparison of underlying earnings, net of non-recurring charges, providing insight into the on-going operations of the Company.
As of June 30, 2008, the Company's backlog was $212 million compared to $219 million as of March 31, 2008 while during the comparable period the backlog for the Company's Security division increased by $7 million to $116 million. For the fourth quarter of fiscal 2008, the Company generated cash flow from operations of $9.2 million and capital expenditures were $4.3 million.
Deepak Chopra, OSI Systems Chairman and CEO, stated, "We are very pleased with our operating results for fiscal 2008. We have been focused on improving our profitability and the results announced today highlight the significant progress we have made to date. For fiscal 2008, revenues increased 17% while our operating income, excluding the impact of impairment and restructuring charges, improved from an operating loss of approximately $6 million in fiscal 2007 to an operating profit of approximately $24 million in fiscal 2008."
Mr. Chopra continued, "All three of our business divisions concluded the fiscal year on a positive note. Excluding the impact of impairment and restructuring charges, the Security division reported revenue growth of 21% while operating income improved by 104%. The Healthcare division continued its strong turnaround, improving from an operating loss of $4.7 million in fiscal 2007 to an operating profit of $12.9 million in fiscal 2008. While finally, our Optoelectronic division increased external sales and operating income excluding the impact of impairment and restructuring charges 25% respectively in fiscal 2008 when compared to fiscal 2007."
Company Outlook -- Guidance for Fiscal 2009
The Company has not previously issued guidance for fiscal 2009. Subject to the risk factors referenced in the Safe Harbor section of this press release, the Company announced that, for fiscal 2009, it anticipates net sales of $660-$680 million and earnings per diluted share of $1.07 to $1.22 excluding the impact of impairment, restructuring and other one-time charges.
Alan Edrick, OSI Systems Executive Vice President and Chief Financial Officer, said, "Our performance in fiscal 2008 marked the beginning of a significant financial turnaround to improve earnings and cash flow. We will continue our ongoing operational improvement initiatives which we believe will result in significant leverage to our bottom line. Our focus on generating free cash flow was evident in our fourth quarter results and we anticipate further improvements in fiscal 2009."
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous webcast over the Internet beginning at 9:00 am PDT (12:00 pm EDT) today to discuss its financial results and its business outlook. This conference call will contain forward-looking information. To listen to the call, please log on to www.fulldisclosure.com or www.osi-systems.com and follow the link that will be posted on the front page. A replay of the webcast will be available shortly after the conclusion of the conference call until September 10, 2008. The replay can either be accessed through the Company's website, www.osi-systems.com, or via telephonic replay by calling 1-888-286-8010 and entering the conference call identification number '44687968' when prompted for the replay code.
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 products, and optoelectronic devices and value-added subsystems. 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 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. News Filter: OSIS-G
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding the Company's expectations, goals or intentions about the future, including the Company's financial projections of revenues and earnings per share as well as its plans to reduce costs and improve bottom line performance and to maximize shareholder value. The actual results may differ materially from those described in or implied by any forward-looking statement. In particular, there can be no assurance that such goal will ultimately be achieved, current plans fully implemented or that other expectations, such as those concerning future revenues and bottom line performance, will ultimately materialize. Other important factors are set forth in our Securities and Exchange Commission filings. All forward-looking statements are current as of the date of this release, and the Company undertakes no obligation to update any statement in light of new information or future events.
OSI SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Fiscal Year Ended
June 30, June 30,
2007 2008 2007 2008
Revenues $ 152,799 $ 171,173 $ 532,284 $ 623,088
Cost of goods sold 96,296 111,631 354,067 404,049
Gross profit 56,503 59,542 178,217 219,039
Operating expenses:
Selling, general and administrative 38,671 37,105 149,859 150,050
Research and development 11,022 11,852 44,446 45,361
Impairment, restructuring, and other charges 2,302 1,333 26,071 4,688
Total operating expenses 51,995 50,290 220,376 200,099
Income (loss) from operations 4,508 9,252 (42,159 ) 18,940
Interest expense (1,024 ) (1,125 ) (4,544 ) (4,844 )
Interest income 154 75 475 375
Other income/(expense) (6 ) - 15,766 -
Income (loss) before provision for income taxes and minority interest 3,632 8,202 (30,462 ) 14,471
Provision (benefit) for income taxes (1,269 ) 2,556 (12,876 ) 579
Minority interest (618 ) (108 ) (1,172 ) (32 )
Net income (loss) $ 4,283 $ 5,538 $ (18,758 ) $ 13,860
Diluted income (loss) per share $ 0.24 $ 0.31 $ (1.12 ) $ 0.78
Weighted average shares outstanding - diluted 17,544 18,142 16,844 17,735
Condensed Consolidated Balance Sheets
(in thousands)
June 30, June 30,
2007 2008
Assets
Cash and cash equivalents $ 15,980 $ 18,232
Accounts receivable, net 140,483 156,781
Inventories 120,174 144,807
Other current assets 38,002 36,635
Total current assets 314,639 356,455
Non-current assets 136,844 151,186
Total $ 451,483 $ 507,641
Liabilities and Stockholders' Equity
Bank lines of credit $ 16,775 $ 18,657
Current portion of long-term debt 5,744 6,593
Accounts payable and accrued expenses 85,717 89,594
Other current liabilities 47,662 46,653
Total current liabilities 155,898 161,497
Long-term debt 25,709 49,091
Other long-term liabilities 13,849 17,804
Total liabilities 195,456 228,392
Minority interest 8,815 1,228
Shareholders' equity 247,212 278,021
Total $ 451,483 $ 507,641
SEGMENT INFORMATION
(in thousands)
Three Months Ended Fiscal Year Ended
June 30, June 30,
2007 2008 2007 2008
Revenues - by Segment Group:
Security Group $ 56,096 $ 61,760 $ 186,575 $ 225,836
Healthcare Group 68,539 68,645 233,178 256,695
Optoelectronics and Manufacturing Group including intersegment 39,439 53,130 150,507 187,624
revenues
Intersegment revenues elimination (11,275 ) (12,362 ) (37,976 ) (47,067 )
Total $ 152,799 $ 171,173 $ 532,284 $ 623,088
Operating income (loss) - by Segment Group:
Security Group (i) $ 1,884 $ 3,725 $ (29,400 ) $ 5,365
Healthcare Group 4,282 3,357 (4,712 ) 12,918
Optoelectronics and Manufacturing Group 2,331 4,567 9,612 13,114
Corporate (3,551 ) (2,331 ) (16,987 ) (12,258 )
Eliminations (438 ) (66 ) (672 ) (199 )
Total $ 4,508 $ 9,252 $ (42,159 ) $ 18,940
(i) Includes non-recurring impairment, restructuring and other charges
for $1.4 million and $0.2 million for the three months ended June
30, 2007 and 2008, respectively, and $33.2 million and $2.3
million for the years ended June 30, 2007 and 2008, respectively.
SOURCE: OSI Systems, Inc.
OSI Systems, Inc. Jeremy Norton, Vice President Investor Relations & Business Development 310-349-2372
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