- Record Q3 Revenues of $405 Million (34% growth
year-over-year)
- Q3 Earnings Per Diluted Share
- GAAP Diluted EPS of $1.95 (54% increase
year-over-year)
- Record Non-GAAP Adjusted Diluted EPS of $2.16 (45% increase
year-over-year)
- Q3 Operating Income Increase of 50% Year-Over-Year
- Strong Bookings Lead to Q3-Ended Backlog of Approximately
$1.8 Billion
- Company Increases FY 2024 Non-GAAP Adjusted Diluted EPS
Guidance
OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ:
OSIS) today announced its financial results for the three and nine
months ended March 31, 2024.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive
Officer, stated, “We are pleased to report strong financial results
as outstanding performance in the Security division led to record
third quarter revenues and adjusted earnings per share. Given
continued solid bookings, a strong backlog, and high visibility
into our pipeline of opportunities, we anticipate a strong
conclusion to fiscal 2024 and we believe we are well positioned for
fiscal 2025.”
For Q3 FY24, the Company reported revenues of $405.4 million, a
34% increase over the $302.9 million reported for the same quarter
of the prior year. Net income for Q3 FY24 was $34.0 million, or
$1.95 per diluted share, compared to net income of $21.8 million,
or $1.27 per diluted share, for the same quarter of the prior year.
Non-GAAP net income for Q3 FY24 was $37.7 million, or $2.16 per
diluted share, compared to non-GAAP net income for the same quarter
of the prior year of $25.6 million, or $1.49 per diluted share.
For the nine months ended March 31, 2024, revenues were $1.06
billion compared to $866.6 million in the same period a year ago.
Net income for the nine months ended March 31, 2024 was $83.5
million, or $4.82 per diluted share, compared to $49.4 million, or
$2.88 per diluted share, for the same period a year ago. Non-GAAP
net income for the nine months ended March 31, 2024 was $91.5
million, or $5.29 per diluted share, compared to non-GAAP net
income of $61.0 million, or $3.55 per diluted share, for the same
prior-year period.
The Company's book-to-bill ratio was 1.0 for the third quarter
of fiscal 2024. As of March 31, 2024, the Company's backlog was
approximately $1.8 billion. Capital expenditures were $4.9 million
and $5.7 million for Q3 FY24 and Q3 FY23, respectively.
Mr. Chopra commented, “The Security division’s results reflect
our tremendous momentum given increasing demand for our product and
service offerings as well as our superior competitive position.
Security revenues in the third quarter of fiscal 2024 increased 60%
year-over-year, which drove significant operating income growth and
year-over-year adjusted operating margin expansion in the division.
Bookings were again solid and, significantly, even with a
substantial conversion of backlog to revenue during the third
quarter, the quarter-end backlog remained comparable with the level
of last quarter. This further bolsters our confidence that the
division’s positive momentum will continue into the future.”
Mr. Chopra continued, “As expected, our Optoelectronics and
Manufacturing division reported softer third quarter revenues in
part due to certain customers adjusting inventory levels and
delaying receipt of deliveries. I am proud of the Optoelectronics
and Manufacturing team’s focus on continuous improvement. We
anticipate a solid fourth quarter and are well-positioned to take
advantage of future growth.”
Mr. Chopra concluded, “The hospital spending environment
continued to pose challenges for our Healthcare division. We are
highly focused on new product development, principally in our
patient monitoring portfolio, to drive future sustainable growth in
this division.”
Fiscal Year 2024 Outlook
The Company is reiterating its fiscal 2024 revenues guidance of
anticipated growth in excess of 19% over revenues in fiscal 2023.
The Company is increasing its non-GAAP adjusted diluted earnings
per share guidance from greater than 29% growth to greater than 30%
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 all fiscal periods 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 financial
results for the periods presented in this earnings release. 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 May 9, 2024. 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
or conflicts in the Middle East, 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
March 31,
Nine Months Ended March
31,
2023
2024
2023
2024
Revenues:
Products
$
223,724
$
327,360
$
637,563
$
817,248
Services
79,165
78,046
228,994
240,603
Total net revenues
302,889
405,406
866,557
1,057,851
Cost of goods sold:
Products
156,534
223,570
458,197
547,938
Services
42,569
45,741
120,870
133,772
Total cost of goods sold
199,103
269,311
579,067
681,710
Gross profit
103,786
136,095
287,490
376,141
Operating expenses:
Selling, general and administrative
53,707
66,584
161,148
197,986
Research and development
14,852
17,144
43,848
49,416
Restructuring and other charges, net
890
1,004
4,366
2,496
Total operating expenses
69,449
84,732
209,362
249,898
Income from operations
34,337
51,363
78,128
126,243
Interest and other expense, net
(5,727
)
(7,407
)
(14,339
)
(19,689
)
Income before income taxes
28,610
43,956
63,789
106,554
Provision for income taxes
(6,802
)
(9,913
)
(14,392
)
(23,079
)
Net income
$
21,808
$
34,043
$
49,397
$
83,475
Diluted earnings per share
$
1.27
$
1.95
$
2.88
$
4.82
Weighted average shares outstanding –
diluted
17,184
17,425
17,151
17,301
UNAUDITED SEGMENT
INFORMATION
(in thousands)
Three Months Ended March
31,
Nine Months Ended March
31,
2023
2024
2023
2024
Revenues – by Segment:
Security division
$
178,752
$
285,960
$
491,188
$
700,564
Optoelectronics and Manufacturing
division, including intersegment revenues
93,888
87,974
286,513
282,199
Healthcare division
43,911
41,493
130,994
121,130
Intersegment eliminations
(13,662
)
(10,021
)
(42,138
)
(46,042
)
Total
$
302,889
$
405,406
$
866,557
$
1,057,851
Operating income (loss) – by
Segment:
Security division
$
29,496
$
50,127
$
66,014
$
122,592
Optoelectronics and Manufacturing
division
12,493
9,435
35,963
32,493
Healthcare division
1,787
1,564
4,819
2,157
Corporate
(10,148
)
(9,733
)
(29,572
)
(30,832
)
Intersegment eliminations
709
(30
)
904
(167
)
Total
$
34,337
$
51,363
$
78,128
$
126,243
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2023
March 31, 2024
Assets
Cash and cash equivalents
$
76,750
$
101,443
Accounts receivable, net
380,845
503,828
Inventories
338,008
442,797
Prepaid expenses and other current
assets
44,300
71,182
Total current assets
839,903
1,119,250
Property and equipment, net
108,933
110,399
Goodwill
349,505
352,119
Intangible assets, net
140,857
142,056
Other non-current assets
116,488
107,251
Total Assets
$
1,555,686
$
1,831,075
Liabilities and Stockholders'
Equity
Bank lines of credit
$
215,000
$
349,000
Current portion of long-term debt
8,076
8,212
Accounts payable and accrued expenses
208,786
237,310
Other current liabilities
139,832
167,160
Total current liabilities
571,694
761,682
Long-term debt
136,491
131,214
Other long-term liabilities
121,336
124,766
Total liabilities
829,521
1,017,662
Total stockholders’ equity
726,165
813,413
Total Liabilities and Stockholders’
Equity
$
1,555,686
$
1,831,075
RECONCILIATION OF GAAP TO
NON-GAAP
NET INCOME AND EARNINGS PER
SHARE
(in thousands, except earnings
per share data)
Three Months Ended March
31,
Nine Months Ended March
31,
2023
2024
2023
2024
Net income
EPS
Net income
EPS
Net income
EPS
Net income
EPS
GAAP basis
$
21,808
$
1.27
$
34,043
$
1.95
$
49,397
$
2.88
$
83,475
$
4.82
Restructuring and other charges, net
890
0.05
1,004
0.06
4,366
0.25
2,496
0.14
Amortization of acquired intangible
assets
3,738
0.22
3,881
0.22
11,226
0.65
12,268
0.71
Non-cash interest expense
124
0.01
-
-
419
0.02
-
-
Tax benefit of above adjustments
(1,102
)
(0.07
)
(1,088
)
(0.06
)
(3,775
)
(0.21
)
(3,632
)
(0.20
)
Discrete tax expense (benefit)
168
0.01
(180
)
(0.01
)
(646
)
(0.04
)
(3,133
)
(0.18
)
Non-GAAP basis
$
25,626
$
1.49
$
37,660
$
2.16
$
60,987
$
3.55
$
91,474
$
5.29
RECONCILIATION OF GAAP TO
NON-GAAP
OPERATING INCOME (LOSS) AND
OPERATING MARGIN BY SEGMENT
(in thousands, except
percentages)
Three Months Ended March 31,
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)
$
29,496
16.5
%
$
12,493
13.3
%
$
1,787
4.1
%
$
(9,439
)
$
34,337
11.3
%
Restructuring and other charges, net
493
0.3
%
32
0.1
%
307
0.7
%
58
890
0.3
%
Amortization of acquired intangible
assets
2,784
1.5
%
686
0.7
%
268
0.6
%
-
3,738
1.3
%
Non-GAAP basis– operating income
(loss)
$
32,773
18.3
%
$
13,211
14.1
%
$
2,362
5.4
%
$
(9,381
)
$
38,965
12.9
%
Three Months Ended March 31,
2024
Security Division
Optoelectronics and Manufacturing
Division
Healthcare Division
Corporate/ Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
50,127
17.5
%
$
9,435
10.7
%
$
1,564
3.8
%
$
(9,763
)
$
51,363
12.7
%
Restructuring and other charges, net
185
0.1
%
504
0.6
%
311
0.7
%
4
1,004
0.2
%
Amortization of acquired intangible
assets
2,800
1.0
%
780
0.9
%
301
0.7
%
-
3,881
1.0
%
Non-GAAP basis– operating income
(loss)
$
53,112
18.6
%
$
10,719
12.2
%
$
2,176
5.2
%
$
(9,759
)
$
56,248
13.9
%
Nine Months Ended March 31,
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)
$
66,014
13.4
%
$
35,963
12.6
%
$
4,819
3.7
%
$
(28,668
)
$
78,128
9.0
%
Restructuring and other charges, net
1,358
0.3
%
47
0.0
%
2,753
2.1
%
208
4,366
0.5
%
Amortization of acquired intangible
assets
8,487
1.7
%
2,068
0.7
%
671
0.5
%
-
11,226
1.3
%
Non-GAAP basis– operating income
(loss)
$
75,859
15.4
%
$
38,078
13.3
%
$
8,243
6.3
%
$
(28,460
)
$
93,720
10.8
%
Nine Months Ended March 31,
2024
Security Division
Optoelectronics and Manufacturing
Division
Healthcare Division
Corporate/ Elimination
Total
% of
Sales
% of
Sales
% of
Sales
% of
Sales
GAAP basis – operating income (loss)
$
122,592
17.5
%
$
32,493
11.5
%
$
2,157
1.8
%
$
(30,999
)
$
126,243
11.9
%
Restructuring and other charges, net
621
0.1
%
1,080
0.4
%
311
0.3
%
484
2,496
0.2
%
Amortization of acquired intangible
assets
8,766
1.2
%
2,598
0.9
%
904
0.7
%
-
12,268
1.2
%
Non-GAAP basis– operating income
(loss)
$
131,979
18.8
%
$
36,171
12.8
%
$
3,372
2.8
%
$
(30,515
)
$
141,007
13.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425277004/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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