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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 5, 2007
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OSI SYSTEMS, INC.
(EXACT NAME OF REGISTRANT SPECIFIED IN CHARTER)
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CALIFORNIA 000-23125 330238801
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
12525 CHADRON AVENUE
HAWTHORNE, CA 90250
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(310) 978-0516
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
On September 5, 2007, we issued a press release announcing our
financial results for the fourth quarter and fiscal year ended June 30, 2007. A
copy of the press release is attached hereto as Exhibit 99.1 and incorporated
herein in its entirety by this reference.
We are furnishing the information contained in this Item 2.02 (including
Exhibit 99.1). It shall not be deemed to be "filed" for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall it be deemed to be incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1: Press Release of OSI Systems, Inc., dated September 5, 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OSI SYSTEMS, INC.
Date: September 5, 2007
By: /s/ Alan Edrick
-----------------------------------
Alan Edrick
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release of OSI Systems, Inc., dated September 5, 2007.
Exhibit 99.1
OSI Systems Reports Fourth Quarter and Fiscal Year 2007
Financial Results
HAWTHORNE, Calif.--(BUSINESS WIRE)--Sept. 5, 2007--OSI Systems,
Inc. (NASDAQ:OSIS) today announced financial results for its fourth
quarter and fiscal year ended June 30, 2007.
The Company reported record revenues of $152.8 million for the
fourth quarter of fiscal 2007, an increase of 22% from the $125.6
million reported for the fourth quarter of fiscal 2006. Net income for
the fourth quarter of fiscal 2007 was $4.3 million, or $0.24 per
diluted share, compared to net income of $0.7 million, or $0.04 per
diluted share, for the fourth quarter of fiscal 2006.
For the fiscal year ended June 30, 2007, revenues increased by
$79.6 million, or 18%, to $532.3 million from $452.7 million for
fiscal 2006. For fiscal 2007, the Company reported a net loss of $18.8
million or $(1.12) per diluted share, compared to a net loss of $2.4
million or $(0.17) per diluted share, in fiscal 2006.
The financial results for the fourth quarter of fiscal 2007 were
adversely impacted by impairment, restructuring and other charges of
$2.3 million. These charges were primarily related to the Company's
previously announced plan to generate approximately $17 million of
pre-tax annualized cost savings through the integration of recent
acquisitions and the rationalization of the Company's cost structure,
the full benefit of which is expected to be realized in fiscal 2008.
In addition, the fourth quarter results included a $1.6 million
operating loss attributable to a business within the Company's
Optoelectronics and Manufacturing division that manufactures and sells
weapons simulation systems. The financial results for the fourth
quarter of fiscal 2007 were favorably impacted by a $1.3 million tax
benefit.
The financial results for the year ended June 30, 2007 included
impairment, restructuring and other charges of approximately $36.9
million. These charges were primarily associated with the Company's
determination that certain fixed and intangible assets were impaired
as well as the recording of $10.3 million of additional inventory
reserves, which reserves are included in cost of goods sold. In
addition, the fiscal 2007 results included a $4.6 million operating
loss attributable to the aforementioned weapons simulation business.
The fiscal 2007 financial results were favorably impacted by the
settlement of a dispute with GE Healthcare related to the Company's
acquisition of Spacelabs Medical in fiscal 2004. The settlement
resulted in the receipt of $15.0 million, which amount has been
recorded as other income.
The Company maintained its record backlog level of $209 million as
of June 30, 2007 while reporting record revenues for the fourth
quarter. The continued record backlog level was primarily a result of
the continued strong performance of our Security division which
reported a backlog of approximately $117 million as of June 30, 2007.
Deepak Chopra, OSI Systems Chairman and CEO, said, "We are
encouraged by our performance in the fourth quarter. We were able to
make progress on several critical initiatives including regaining top
line momentum in our Healthcare division and continued strong security
bookings. We continue to see exciting opportunities within each of our
divisions as evidenced by our record revenue and strong backlog levels
at the end of the fiscal year."
Mr. Chopra continued, "Fiscal 2007 can be characterized as a
transition year for the Company. We are committed to making the
necessary changes to improve our bottom line performance. Recently we
announced that we had completed the implementation of cost cutting
measures to generate approximately $17 million of annualized savings
and further identified an additional $2 - $3 million of cost savings
we expect to implement in the first half of fiscal 2008. While these
measures look to improve our operating performance, we are also
increasing our focus on our core operations. To that end, we are
reviewing strategic options for our weapon simulation business to
eradicate the losses experienced in the past fiscal year."
Mr. Chopra concluded, "We enter fiscal 2008 with a tremendous
amount of top-line momentum supported by strong industry-wide trends
affecting our Security and Healthcare divisions and our continued
commitment to R&D. During fiscal 2007 we successfully launched a
number of new products while continuing to invest heavily in next
generation products that we believe will have a significant impact on
our business and market position in the near future. Overall, we
remain focused on delivering improved financial results to our
shareholders."
Forward-Looking Guidance for Fiscal 2008
The Company has not previously issued guidance for fiscal 2008.
Subject to Safe Harbor statement below the Company provided its
expectations for fiscal 2008 as follows:
Fiscal 2008
-- Net sales of $580 - $595 million, or year-over-year growth of
9 - 12%.
Fiscal 2008 - First Quarter
-- Net sales of $125 - $130 million, or year-over-year growth of
8 - 13%. The Company expects to report a net loss in the first
quarter with the loss per share expected to be significantly
reduced from the ($0.36) per share loss reported in the first
quarter of fiscal 2007. The first quarter, historically the
weakest quarter in the Company's fiscal year, is impacted by
seasonality factors within the Security and Healthcare
divisions.
Alan Edrick, OSI Systems, Inc.'s Executive Vice President and
Chief Financial Officer said, "Although we improved our financial
performance in the fourth quarter of 2007, we still have work ahead of
us to accelerate organic growth, improve operating margins and
generate free cash flow. However, we believe the decisions we made in
fiscal 2007 to aggressively reduce our cost base together with the
plans under development for the balance of our portfolio will enable
us to capitalize on the strength of our brands to maximize shareholder
value."
Conference Call Information
OSI Systems, Inc. will host a conference call and simultaneous
webcast over the Internet beginning at 7:00 am PST (10:00 am EST)
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 19, 2007. 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
'92896838' 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 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 located in more than a dozen countries. It
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 divisions, visit www.osi-systems.com.
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 that
could affect the Company's financial results 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,
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2007 2006 2007 2006
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Revenues $152,799 $125,586 $532,284 $452,686
Cost of goods sold 96,296 74,090 354,067 276,025
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Gross profit 56,503 51,496 178,217 176,661
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Operating expenses:
Selling, general and
administrative 38,671 37,693 149,201 138,428
Research and development 11,022 9,557 44,446 35,839
Impairment, restructuring,
and other charges 2,302 - 26,071 800
Other operating expenses - - 658 623
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Total operating expenses 51,995 47,250 220,376 175,690
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Income (loss) from operations 4,508 4,246 (42,159) 971
Interest expense (1,024) (372) (4,544) (1,558)
Interest income 154 87 475 267
Other income / (expense) (6) 475 15,766 824
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Income (loss) before provision
for income taxes and minority
interest 3,632 4,436 (30,462) 504
Provision (benefit) for income
taxes (1,269) 2,905 (12,876) 1,090
Minority interest (618) (796) (1,172) (1,772)
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Net income (loss) $ 4,283 $ 735 $(18,758) $ (2,358)
========= ========= ========= =========
Diluted income (loss) per
share $ 0.24 $ 0.04 $ (1.12) $ (0.17)
========= ========= ========= =========
Weighted average shares
outstanding - diluted 17,544 16,737 17,059 16,517
========= ========= ========= =========
Condensed Consolidated Balance Sheets
(in thousands)
June 30, June 30,
2006 2007
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Assets
Cash and cash equivalents $ 13,799 $ 15,980
Accounts receivable, net 119,419 140,483
Inventories 120,604 120,174
Other current assets 29,902 38,002
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Total current assets 283,724 314,639
Non-current assets 119,774 136,844
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Total $ 403,498 $ 451,483
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Liabilities and Stockholders' Equity
Bank lines of credit $ 10,857 $ 16,775
Current portion of long-term debt 1,251 5,744
Accounts payable and accrued expenses 68,526 76,461
Other current liabilities 40,934 56,918
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Total current liabilities 121,568 155,898
Long-term debt 5,483 25,709
Other long-term liabilities 17,769 13,849
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Total liabilities 144,820 195,456
Minority interest 9,731 8,815
Shareholders' equity 248,947 247,212
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Total $ 403,498 $ 451,483
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SEGMENT INFORMATION
(in thousands)
Three Months Ended Fiscal Year Ended
June 30, June 30,
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2007 2006 2007 2006
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Revenues - by Segment Group:
Security Group $ 56,096 $ 41,302 $186,575 $135,089
Healthcare Group 68,539 58,825 233,178 220,624
Optoelectronics and
Manufacturing Group
including intersegment
revenues 39,439 37,277 150,507 125,870
Intersegment revenues
elimination (11,275) (11,818) (37,976) (28,897)
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Total $152,799 $125,586 $532,284 $452,686
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Operating income (loss) - by
Segment Group:
Security Group $ 1,884 $ 1,974 $(29,400) $ (640)
Healthcare Group 4,282 6,501 (4,712) 14,660
Optoelectronics and
Manufacturing Group 2,331 5,114 9,612 12,505
Corporate (3,551) (8,784) (16,987) (24,786)
Eliminations (438) (559) (672) (768)
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Total $ 4,508 $ 4,246 $(42,159) $ 971
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CONTACT: OSI Systems, Inc.
Director, Investor Relations
Jeremy Norton, 310-349-2237