-
Q4 Earnings per Diluted Share
-
Non-GAAP EPS of $0.55
-
GAAP EPS of $0.30
-
FY 2017 Non-GAAP Diluted EPS Guidance of 23% - 37% growth
HAWTHORNE, Calif.--(BUSINESS WIRE)--
OSI Systems, Inc. (NASDAQ: OSIS) today announced financial results for
its fourth quarter and fiscal year ended June 30, 2016.
Deepak Chopra, OSI Systems' President and CEO, stated, "While our fourth
quarter and full year operating results, in part, reflect the challenges
of fiscal 2016, we are optimistic about our prospects for fiscal 2017.
We are confident that our strengthened leadership team, enhanced product
portfolios and robust pipeline of opportunities across each of our
divisions position us well for top line growth and expanded
profitability in fiscal 2017."
The Company reported revenues of $221 million for the fourth quarter of
fiscal 2016, a decrease of 17% from the $267 million reported for the
fourth quarter of fiscal 2015. Net income for the fourth quarter of
fiscal 2016 was $5.9 million, or $0.30 per diluted share, compared to
net income of $22.4 million, or $1.09 per diluted share, for the fourth
quarter of fiscal 2015. Excluding the impact of impairment,
restructuring and other charges, net income for the fourth quarter of
fiscal 2016 would have been $10.8 million, or $0.55 per diluted share,
compared to net income of $25.0 million, or $1.22 per diluted share, for
the fourth quarter of fiscal 2015.
For the fiscal year ended June 30, 2016, the Company reported revenues
of $830 million, a 13% decrease from the $958 million reported for
fiscal 2015. Net income for fiscal 2016 was $26.2 million, or $1.30 per
diluted share, compared to net income of $65.2 million, or $3.17 per
diluted share, in fiscal 2015. Excluding the impact of impairment,
restructuring and other charges, net income for fiscal 2016 would have
been $42.4 million, or $2.11 per diluted share, compared to net income
of $72.4 million, or $3.53 per diluted share, for fiscal 2015.
During the quarter ended June 30, 2016, the Company's book-to-bill ratio
for equipment and related services (non-turnkey) was 1.0 and, as of June
30, 2016, the Company's backlog was $623 million. During fiscal 2016,
the Company generated cash flow from operations of $59.2 million.
Mr. Chopra further commented, "Bookings were solid throughout fiscal
2016 in the Security Division. The combination of various contract
push-outs and slower conversion of backlog into revenues resulted in
lighter sales during the fourth quarter in comparison with a very strong
performance in the same period of the prior year. We expect significant
growth in fiscal 2017 driven across many product lines including the
RTT™ 110 (Real Time Tomography) explosives detection systems. Multiple
significant wins during fiscal 2016 and continuing into fiscal 2017 are
expected to lead to sizeable revenue growth in this product line in the
coming year. The future of the RTT™ 110 looks bright as it continues its
trajectory towards a market leadership position in Europe and Middle
East. We are also very encouraged by the outstanding performance of our
turnkey security screening services operations in fiscal 2016 and the
pipeline of opportunities for further turnkey awards in fiscal 2017."
Mr. Chopra continued, "Operating efficiencies in the Optoelectronics and
Manufacturing Division continued to drive year over year profit growth.
Though external sales decreased by 1% during the fourth quarter from the
prior year, we were able to achieve operating margin improvement on a
lower revenue base in the fourth quarter as we have throughout fiscal
2016."
Mr. Chopra concluded, "As anticipated, sales in our Healthcare Division
increased from the third quarter but were down year over year. As we
enter fiscal 2017, we are optimistic about our Healthcare business in
general due to adjustments to our product portfolio and changes in the
Division's leadership and, as a result, we expect to return to growth in
fiscal 2017."
Fiscal Year 2017 Outlook
Subject to the risks described in this release, the Company anticipates
fiscal 2017 sales to grow 4% - 8% to $865 million - $895 million. In
addition, the Company anticipates 23% - 37% growth in earnings per
diluted share to $2.60 to $2.90, excluding the impact of impairment,
restructuring and other charges and their related tax effects. This
guidance does not include the impact from any pending or potential
acquisitions. Actual sales and diluted earnings per share could vary
from this guidance including as a result of the matters discussed under
the "Forward-Looking Statements" section. The Company's 2017 diluted
earnings per share guidance is provided on a non-GAAP basis only, due
primarily to the variability and difficulty in making accurate forecasts
and projections of impairment, restructuring and other charges and their
related tax effects.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income and
diluted earnings per share, each of which is a non-GAAP financial
measure. Discussion of adjustments to arrive at non-GAAP figures for the
three months and fiscal years ended June 30, 2015 and 2016 is provided
to allow for the comparison of underlying earnings, net of impairment,
restructuring and other charges and their associated tax effects.
Management believes that these non-GAAP financial measures provide (i)
additional insight into the ongoing operations of the Company; (ii)
meaningful supplemental information regarding the Company's results
primarily because they exclude amounts that management does not view as
reflective of ongoing operating results when planning and forecasting
and when assessing the performance of the business; and (iii) a
meaningful comparison of results for current periods and guidance for
future periods with results for past periods. Non-GAAP financial
measures should not be considered in isolation or as a substitute for
measures of financial performance prepared in accordance with GAAP.
Reconciliations of GAAP to non-GAAP net income and diluted earnings per
share are in the accompanying tables.
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous webcast
beginning at 1:30pm PT (4:30pm ET) today to discuss its results for the
fourth quarter and the full 2016 fiscal year. To listen, please visit
the investor relations section of the OSI Systems website, http://investors.osi-systems.com/index.cfm
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 August 30, 2016. The replay can either be accessed
through the Company's website, www.osi-systems.com,
or via telephonic replay by calling 1-855-859-2056 and entering the
conference call identification number ‘64354940' when prompted for the
replay code.
About OSI Systems, Inc.
OSI Systems, Inc. is a vertically integrated designer and manufacturer
of specialized electronic systems and components for critical
applications. The Company sells its products and provides related
services in diversified markets, including homeland security,
healthcare, defense and aerospace. The Company has more than 30 years of
experience in electronics engineering and manufacturing and maintains
offices and production facilities in more than a dozen countries. The
Company 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-E
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. Forward-looking statements include,
but are not limited to, information provided regarding expected
revenues, earnings and growth in fiscal 2017. 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 U.S. Government budget control provisions;
changes in domestic and foreign government spending, budgetary,
procurement and trade policies adverse to the Company's businesses;
global economic uncertainty; impact of volatility in oil prices;
unfavorable currency exchange rate fluctuations; 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; risks related to our proposed acquisition of American Science
and Engineering, Inc., as well as other risks and uncertainties,
including, but not limited to, those detailed herein and from time to
time in the Company's Securities and Exchange Commission filings which
could have a material and adverse impact on the Company's business,
financial condition and results of operations. For additional
information on these and other factors that could cause the Company's
future results to differ materially from any forward-looking statements,
see the section entitled "Risk Factors" in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2015 and other risks
described therein and in documents subsequently filed by the Company
from time to time with the Securities and Exchange Commission. All
forward-looking statements are based on currently available information
and speak only as of the date on which they are made. The Company
assumes no obligation to update any forward-looking statement made in
this press release that becomes untrue because of subsequent events, new
information or otherwise, except to the extent it is required to do so
in connection with requirements under federal securities laws.
|
OSI SYSTEMS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(in thousands, except per share data)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Fiscal Year Ended June 30,
|
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
Revenue
|
|
$
|
266,601
|
|
|
$
|
221,467
|
|
|
$
|
958,202
|
|
|
$
|
829,660
|
|
|
Cost of goods sold
|
|
|
177,368
|
|
|
|
150,702
|
|
|
|
632,849
|
|
|
|
552,801
|
|
|
Gross profit
|
|
|
89,233
|
|
|
|
70,765
|
|
|
|
325,353
|
|
|
|
276,859
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
41,710
|
|
|
|
43,888
|
|
|
|
171,756
|
|
|
|
166,655
|
|
|
Research and development
|
|
|
13,170
|
|
|
|
11,945
|
|
|
|
51,639
|
|
|
|
49,816
|
|
|
Impairment, restructuring and other charges
|
|
|
3,425
|
|
|
|
6,380
|
|
|
|
9,850
|
|
|
|
22,014
|
|
|
Total operating expenses
|
|
|
58,305
|
|
|
|
62,213
|
|
|
|
233,245
|
|
|
|
238,485
|
|
|
Income from operations
|
|
|
30,928
|
|
|
|
8,552
|
|
|
|
92,108
|
|
|
|
38,374
|
|
|
Interest expense and other expense, net
|
|
|
(747
|
)
|
|
|
(796
|
)
|
|
|
(3,255
|
)
|
|
|
(2,879
|
)
|
|
Income before income taxes
|
|
|
30,181
|
|
|
|
7,756
|
|
|
|
88,853
|
|
|
|
35,495
|
|
|
Provision for income taxes
|
|
|
7,748
|
|
|
|
1,855
|
|
|
|
23,702
|
|
|
|
9,338
|
|
|
Net income
|
|
$
|
22,433
|
|
|
$
|
5,901
|
|
|
$
|
65,151
|
|
|
$
|
26,157
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share
|
|
$
|
1.09
|
|
|
$
|
0.30
|
|
|
$
|
3.17
|
|
|
$
|
1.30
|
|
|
Weighted average shares outstanding - diluted
|
|
|
20,543
|
|
|
|
19,512
|
|
|
|
20,526
|
|
|
|
20,076
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
|
|
|
|
June 30, 2015
|
|
June 30, 2016
|
|
Assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
47,593
|
|
$
|
104,370
|
|
Accounts receivable, net
|
|
|
178,519
|
|
|
141,716
|
|
Inventories
|
|
|
230,421
|
|
|
273,288
|
|
Other current assets
|
|
|
40,101
|
|
|
35,944
|
|
Total current assets
|
|
|
496,634
|
|
|
555,318
|
|
Non-current assets
|
|
|
440,655
|
|
|
436,405
|
|
Total Assets
|
|
$
|
937,289
|
|
$
|
991,723
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Bank lines of credit
|
|
$
|
--
|
|
$
|
125,000
|
|
Current portion of long-term debt
|
|
|
2,801
|
|
|
2,759
|
|
Accounts payable and accrued expenses
|
|
|
106,887
|
|
|
117,455
|
|
Other current liabilities
|
|
|
131,955
|
|
|
122,621
|
|
Total current liabilities
|
|
|
241,643
|
|
|
367,835
|
|
Long-term debt
|
|
|
8,556
|
|
|
6,054
|
|
Deferred income taxes
|
|
|
30,688
|
|
|
29,160
|
|
Other long-term liabilities
|
|
|
74,623
|
|
|
47,828
|
|
Total liabilities
|
|
|
355,510
|
|
|
450,877
|
|
Total stockholders' equity
|
|
|
581,779
|
|
|
540,846
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
937,289
|
|
$
|
991,723
|
|
SEGMENT INFORMATION
|
|
(in thousands)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Fiscal Year Ended June 30,
|
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
Revenues - by Segment:
|
|
(unaudited)
|
|
|
|
|
|
Security Division
|
|
$
|
131,479
|
|
|
$
|
110,532
|
|
|
$
|
481,087
|
|
|
$
|
411,212
|
|
|
Healthcare Division
|
|
|
78,981
|
|
|
|
55,332
|
|
|
|
255,691
|
|
|
|
211,458
|
|
|
Optoelectronics and Manufacturing Division, including intersegment
revenues
|
|
|
67,960
|
|
|
|
63,088
|
|
|
|
267,872
|
|
|
|
247,502
|
|
|
Intersegment revenues elimination
|
|
|
(11,819
|
)
|
|
|
(7,485
|
)
|
|
|
(46,448
|
)
|
|
|
(40,512
|
)
|
|
Total
|
|
$
|
266,601
|
|
|
$
|
221,467
|
|
|
$
|
958,202
|
|
|
$
|
829,660
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) - by Segment:
|
|
|
|
|
|
|
|
|
|
Security Division (1)
|
|
$
|
16,878
|
|
|
$
|
8,122
|
|
|
$
|
67,804
|
|
|
$
|
37,845
|
|
|
Healthcare Division (2)
|
|
|
13,408
|
|
|
|
2,221
|
|
|
|
24,666
|
|
|
|
8,351
|
|
|
Optoelectronics and Manufacturing Division (3)
|
|
|
3,832
|
|
|
|
5,576
|
|
|
|
17,533
|
|
|
|
19,654
|
|
|
Corporate (4)
|
|
|
(3,707
|
)
|
|
|
(8,017
|
)
|
|
|
(17,455
|
)
|
|
|
(27,199
|
)
|
|
Eliminations
|
|
|
517
|
|
|
|
650
|
|
|
|
(440
|
)
|
|
|
(277
|
)
|
|
Total
|
|
$
|
30,928
|
|
|
$
|
8,552
|
|
|
$
|
92,108
|
|
|
$
|
38,374
|
|
|
|
|
(1)
|
|
Includes impairment, restructuring and other charges of $1.2 million
and $2.5 million for the three months ended June 30, 2015 and 2016,
respectively, and $5.1 million and $10.0 million for the fiscal
years ended June 30, 2015 and 2016, respectively.
|
|
|
|
|
|
(2)
|
|
Includes impairment, restructuring and other charges of $0.2 million
and $1.4 million for the three months ended June 30, 2015 and 2016,
respectively, and $1.4 million and $3.1 million for the fiscal years
ended June 30, 2015 and 2016, respectively.
|
|
|
|
|
|
(3)
|
|
Includes impairment, restructuring and other charges of $1.9 million
and $0.3 million for the three months ended June 30, 2015 and 2016,
respectively, and $2.7 million and $3.3 million for the fiscal years
ended June 30, 2015 and 2016, respectively.
|
|
|
|
|
|
(4)
|
|
Includes impairment, restructuring and other charges of $0.1 million
and $2.2 million for the three months ended June 30, 2015 and 2016,
respectively, and $0.7 million and $5.6 million for the fiscal years
ended June 30, 2015 and 2016, respectively.
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND EARNINGS PER
SHARE
|
|
(in thousands, except earnings per share data)
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Fiscal Year Ended June 30,
|
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
Net
|
|
|
|
Net
|
|
|
|
Net
|
|
|
|
Net
|
|
|
|
|
|
income
|
|
EPS
|
|
income
|
|
EPS
|
|
income
|
|
EPS
|
|
income
|
|
EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basis
|
|
$
|
22,433
|
|
$
|
1.09
|
|
$
|
5,901
|
|
$
|
0.30
|
|
$
|
65,151
|
|
$
|
3.17
|
|
$
|
26,157
|
|
$
|
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment, restructuring and other charges, net of tax
|
|
|
2,546
|
|
|
0.13
|
|
|
4,854
|
|
|
0.25
|
|
|
7,222
|
|
|
0.36
|
|
|
16,223
|
|
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basis
|
|
$
|
24,979
|
|
$
|
1.22
|
|
$
|
10,755
|
|
$
|
0.55
|
|
$
|
72,373
|
|
$
|
3.53
|
|
$
|
42,380
|
|
$
|
2.11
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160816006145/en/
OSI Systems, Inc.
Ajay Vashishat
Vice President,
Business Development
12525 Chadron Ave
Hawthorne, CA 90250
(310)
349-2237
avashishat@osi-systems.com
Source: OSI Systems, Inc.
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