- Q1 Revenues of $279 Million
- Q1 Earnings Per Diluted Share
- GAAP EPS of $0.75
- Non-GAAP Adjusted EPS of $0.91
- Q1 Operating Income Growth of 23% Year-Over-Year
- Q1-Ended Backlog of Approximately $1.8 Billion
- Company Increases FY 2024 Non-GAAP Adjusted Diluted EPS
Guidance to Year-Over-Year Growth of >27%; Reiterates FY 2024
Revenues Guidance
OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ:
OSIS) today announced its financial results for the first quarter
of fiscal 2024.
For Q1 FY24, the Company reported revenues of $279.2 million, a
4% increase over the $268.1 million reported for the same quarter
of the prior year. Net income for Q1 FY24 was $12.9 million, or
$0.75 per diluted share, compared to net income of $11.2 million,
or $0.65 per diluted share, for the same quarter of the prior year.
Non-GAAP net income for Q1 FY24 was $15.6 million, or $0.91 per
diluted share, compared to non-GAAP net income for the same quarter
of the prior year of $15.0 million, or $0.87 per diluted share.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive
Officer, stated, “Our first quarter sales and earnings were
generally consistent with our expectations with strong growth in
the Security division and solid performance in the Optoelectronics
and Manufacturing division overcoming some headwinds in the
Healthcare business. Given our strong backlog and momentum as
demonstrated by our recent awards, we are excited about the
significant revenues and earnings growth anticipated for the
balance of fiscal 2024.”
The Company's backlog was approximately $1.8 billion at the end
of Q1 FY24. For Q1 FY24, operating cash flow was $17.1 million
compared to $17.2 million for the same quarter of the prior year.
Capital expenditures were $5.2 million and $3.3 million for Q1 FY24
and Q1 FY23, respectively.
Mr. Chopra commented, “We were pleased with the performance of
the Security division in the first quarter of fiscal 2024 as
revenues increased 14% year-over-year with strong operating margin
expansion. Bookings were solid, leading to a record Security
division backlog. We expect strong performance in the Security
division throughout this fiscal year as the division is well
positioned to accelerate growth.”
Mr. Chopra continued, “Our Optoelectronics and Manufacturing
division again delivered solid financial results with adjusted
operating margin expansion. The division continues to benefit from
our vertically-integrated global manufacturing footprint.”
Mr. Chopra concluded, “During the first quarter of fiscal 2024,
general market conditions posed challenges to our Healthcare
division, resulting in reduced revenues and operating income
compared to the same quarter of the previous year. We continue to
focus on new product development, principally in our patient
monitoring portfolio. We are optimistic about achieving more robust
results in the upcoming quarters.”
Fiscal Year 2024 Outlook
The Company is reiterating its fiscal 2024 revenues guidance
with anticipated revenue growth in excess of 18% over revenues in
fiscal 2023. Based upon the strength of the first quarter and the
outlook for the remainder of the fiscal year, the Company is
increasing its non-GAAP adjusted diluted earnings per share
guidance from greater than 25% growth to greater than 27% growth
compared to non-GAAP adjusted diluted earnings per share for fiscal
year 2023. Actual revenues and adjusted diluted earnings per share
could vary from this guidance due to factors discussed under
“Forward-Looking Statements” or other factors.
The Company’s fiscal 2024 adjusted 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 adjusted 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 but excluded in the calculation of non-GAAP adjusted
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 otherwise reasonably be predicted. For the same reasons,
the Company is unable to address the significance of unavailable
information which may be material and therefore could result in
GAAP diluted EPS, the most directly comparable GAAP financial
measure, being materially different from projected non-GAAP
adjusted diluted EPS.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net
income, non-GAAP adjusted 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 Q1 FY24 and the same quarter of the
prior year is provided to allow for the comparison of the
underlying performance of the Company, net of impairment,
restructuring and other charges (including certain legal costs),
amortization of intangible assets acquired through business
acquisitions, non-cash interest expense, and their associated tax
effects, and the impact of discrete income tax items. Although we
exclude amortization of acquired intangible assets from our
non-GAAP figures, revenue generated from such intangibles is
included within revenue in determining non-GAAP financial
performance of the Company. Management believes that the non-GAAP
financial measures presented in this earnings release provide (i)
enhanced insight into the ongoing operations of the Company, (ii)
meaningful information regarding the Company’s financial results
(excluding amounts management does not view as reflective of
ongoing operating results) for purposes of planning, forecasting
and assessing the performance of the Company’s businesses, (iii) a
meaningful comparison of financial results of the current period
against results of past periods and (iv) financial results that are
generally more comparable to financial results of peer companies
than are GAAP figures. Non-GAAP financial measures should not be
assessed in isolation or as a substitute for measures of financial
performance prepared in accordance with GAAP. These non-GAAP
measures may not be the same as measures used by other companies
due to possible differences in methods and in the items or events
for which adjustments are made.
Reconciliations of GAAP financial information 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 9:00am PT (12:00pm ET) today to discuss its results
for Q1 FY24. To listen, please visit the Investor Relations section
of the OSI Systems website at
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 beginning shortly after the conclusion of the conference
call until November 10, 2023. The replay can be accessed through
the Company’s website at www.osi-systems.com.
About OSI Systems
OSI Systems is a vertically integrated designer and manufacturer
of specialized electronic systems and components for critical
applications in the homeland security, healthcare, defense and
aerospace industries. The Company combines more than 40 years of
electronics engineering and manufacturing experience with offices
and production facilities in more than a dozen countries to
implement a strategy of expansion into selective end-product
markets. For more information on OSI Systems and 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, 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
2024 and beyond. 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;
the impact of potential information technology, cybersecurity or
data security breaches; changes in domestic and foreign government
spending and budgetary, procurement and trade policies adverse to
the Company's businesses; the impact of the Russia-Ukraine
conflict, including the potential for broad economic disruption;
global economic uncertainty; material delays and cancellations of
orders or deliveries thereon, supply chain disruptions, plant
closures, or other adverse impacts on the Company’s ability to
execute business plans; unfavorable currency exchange rate
fluctuations; unfavorable interest rate fluctuations; effect of
changes in tax legislation; market acceptance of the Company's new
and existing technologies, products, and services; the Company's
ability to win new business and convert orders received to sales
within the current fiscal year; contract and regulatory compliance
matters, and actions which, if brought, could result in judgments,
settlements, fines, injunctions, debarment, or penalties; and 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 those in any forward-looking statements, see
the section titled "Risk Factors" in the Company's most recently
filed Annual Report on Form 10-K and other risks described therein
and in documents subsequently filed by the Company from time to
time with the Securities and Exchange Commission. Undue reliance
should not be placed on forward-looking statements, which 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 required to do so under federal
securities laws.
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three Months Ended
September 30,
2022
2023
Revenues:
Products
$
196,954
$
199,709
Services
71,117
79,501
Total net revenues
268,071
279,210
Cost of goods sold:
Products
143,369
136,983
Services
37,205
43,482
Total cost of goods sold
180,574
180,465
Gross profit
87,497
98,745
Operating expenses:
Selling, general and administrative
53,438
59,798
Research and development
14,540
15,922
Impairment, restructuring and other
charges, net
1,219
466
Total operating expenses
69,197
76,186
Income from operations
18,300
22,559
Interest and other expense, net
(3,432
)
(5,748
)
Income before income taxes
14,868
16,811
Provision for income taxes
(3,633
)
(3,932
)
Net income
$
11,235
$
12,879
Diluted earnings per share
$
0.65
$
0.75
Weighted average shares outstanding –
diluted
17,180
17,175
UNAUDITED SEGMENT
INFORMATION
(in thousands)
Three Months Ended
September 30,
2022
2023
Revenues – by Segment:
Security division
$
144,992
$
164,629
Optoelectronics and Manufacturing
division, including intersegment revenues
93,915
96,128
Healthcare division
43,563
37,787
Intersegment eliminations
(14,399
)
(19,334
)
Total
$
268,071
$
279,210
Operating income (loss) – by
Segment:
Security division
$
14,924
$
20,609
Optoelectronics and Manufacturing
division
11,258
11,437
Healthcare division
1,628
164
Corporate
(10,178
)
(9,916
)
Intersegment eliminations
668
265
Total
$
18,300
$
22,559
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2023
September 30, 2023
Assets
Cash and cash equivalents
$
76,750
$
82,591
Accounts receivable, net
380,845
323,769
Inventories
338,008
418,797
Prepaid expenses and other current
assets
44,300
46,942
Total current assets
839,903
872,099
Property and equipment, net
108,933
109,174
Goodwill
349,505
348,411
Intangible assets, net
140,857
140,211
Other non-current assets
116,488
118,557
Total Assets
$
1,555,686
$
1,588,452
Liabilities and Stockholders'
Equity
Bank lines of credit
$
215,000
$
235,000
Current portion of long-term debt
8,076
8,134
Accounts payable and accrued expenses
208,786
232,081
Other current liabilities
139,832
136,413
Total current liabilities
571,694
611,628
Long-term debt
136,491
134,746
Other long-term liabilities
121,336
117,621
Total liabilities
829,521
863,995
Total stockholders’ equity
726,165
724,457
Total Liabilities and Stockholders’
Equity
$
1,555,686
$
1,588,452
RECONCILIATION OF GAAP TO
NON-GAAP
NET INCOME AND EARNINGS PER
SHARE
(in thousands, except earnings
per share data)
Three Months Ended September
30,
2022
2023
Net income
Diluted EPS
Net income
Diluted EPS
GAAP basis
$
11,235
$
0.65
$
12,879
$
0.75
Impairment, restructuring and other
charges, net
1,219
0.07
466
0.02
Amortization of acquired intangible
assets
3,720
0.22
3,707
0.22
Non-cash interest expense
156
0.01
-
-
Tax effect of above adjustments
(1,279
)
(0.07
)
(1,079
)
(0.06
)
Discrete tax benefit
(99
)
(0.01
)
(413
)
(0.02
)
Non-GAAP basis
$
14,952
$
0.87
$
15,560
$
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, 2022
Security Division
Optoelectronics and Manufacturing
Division
Healthcare Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
14,924
10.3
%
$
11,258
12.0
%
$
1,628
3.7
%
$
(9,510
)
$
18,300
6.8
%
Impairment, restructuring and other
charges, net
788
0.5
%
15
0.0
%
294
0.7
%
122
1,219
0.5
%
Amortization of acquired intangible
assets
2,820
2.0
%
698
0.7
%
202
0.5
%
-
3,720
1.4
%
Non-GAAP basis– operating income
(loss)
$
18,532
12.8
%
$
11,971
12.7
%
$
2,124
4.9
%
$
(9,388
)
$
23,239
8.7
%
Three Months Ended September
30, 2023
Security Division
Optoelectronics and Manufacturing
Division
Healthcare Division
Corporate / Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
20,609
12.5
%
$
11,437
11.9
%
$
164
0.4
%
$
(9,651
)
$
22,559
8.1
%
Impairment, restructuring and other
charges, net
272
0.2
%
51
0.1
%
-
0.0
%
143
466
0.2
%
Amortization of acquired intangible
assets
2,627
1.6
%
779
0.8
%
301
0.8
%
-
3,707
1.3
%
Non-GAAP basis– operating income
(loss)
$
23,508
14.3
%
$
12,267
12.8
%
$
465
1.2
%
$
(9,508
)
$
26,732
9.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231026244566/en/
For Additional Information,
Contact: OSI Systems, Inc. Ajay Vashishat Vice
President, Business Development Tel: (310) 349-2237
avashishat@osi-systems.com
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