OSI Systems Reports Fiscal 2023 Second Quarter Financial Results
OSI Systems reported Q2 revenues of $296 million, marking a 7% increase year-over-year. The company's GAAP EPS was $0.96, with adjusted EPS at $1.19. A notable book-to-bill ratio of 1.7 and a record backlog of $1.5 billion, a 21% increase from last year, highlight strong demand. Despite this, net income fell to $16.4 million compared to $19.8 million a year prior. The company expects H2 revenue growth between 8%-12% and adjusted EPS growth of 17%-23%. OSI reiterated its FY 2023 EPS guidance, now at $6.02 - $6.25, and refined revenue guidance to $1.240 billion - $1.265 billion.
- Q2 revenues increased by 7% to $296 million.
- Adjusted EPS grew to $1.19 from $1.28 year-over-year.
- Record backlog of $1.5 billion, up 21% from last year.
- Book-to-bill ratio of 1.7 indicates strong new contract wins.
- Expectations for H2 revenue growth of 8%-12%.
- Net income decreased to $16.4 million from $19.8 million YoY.
- Operating cash flow was negative $9.1 million, down from $14.5 million last year.
- Healthcare division revenues declined due to market conditions.
-
Q2 Revenues of
$296 Million -
Q2 Earnings Per Diluted Share
-
GAAP EPS of
$0.96 -
Adjusted EPS of
$1.19
-
GAAP EPS of
-
Q2 Book-to-
Bill Ratio of 1.7 -
Record Q2 Ended Backlog of
($1.5 Billion 21% increase fromJune 30, 2022 ) -
Company Reiterates FY 2023
Adjusted EPS Guidance and Narrows Range of Revenue Guidance-
H2 Year-Over-Year Revenue Growth of
8% -12% -
H2 Year-Over-Year Adjusted EPS Growth of
17% -23%
-
H2 Year-Over-Year Revenue Growth of
For the second quarter of fiscal 2023, the Company reported revenues of
For the six months ended
For the three months ended
Fiscal Year 2023 Outlook
The Company is reiterating its fiscal 2023 non-GAAP diluted earnings per share guidance of
The Company’s fiscal 2023 diluted earnings per share guidance is provided on a non-GAAP basis only. The Company does not provide a reconciliation of guidance for 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 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 adjusted diluted EPS.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income, non-GAAP 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 the three and six months ended
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
About
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 2023 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; changes in domestic and foreign government spending and budgetary, procurement and trade policies adverse to the Company's businesses; the impact of the
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
|||||||||||||||||||
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||||||
2021 |
|
2022 |
|
2021 |
|
2022 |
|||||||||||||
Revenues: | |||||||||||||||||||
Products | $ |
205,377 |
|
$ |
216,885 |
|
$ |
412,589 |
|
$ |
413,839 |
|
|||||||
Services |
|
71,304 |
|
|
78,712 |
|
|
143,349 |
|
|
149,829 |
|
|||||||
Total net revenues |
|
276,681 |
|
|
|
295,597 |
|
|
|
555,938 |
|
|
|
563,668 |
|
||||
Cost of goods sold: |
|
|
|
|
|
|
|
||||||||||||
Products |
|
139,060 |
|
|
|
158,294 |
|
|
|
281,966 |
|
|
|
301,663 |
|
||||
Services |
|
37,848 |
|
|
|
41,096 |
|
|
|
74,869 |
|
|
|
78,301 |
|
||||
Total cost of goods sold |
|
176,908 |
|
|
|
199,390 |
|
|
|
356,835 |
|
|
|
379,964 |
|
||||
Gross profit |
|
99,773 |
|
|
|
96,207 |
|
|
|
199,103 |
|
|
|
183,704 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative |
|
54,879 |
|
|
|
54,003 |
|
|
|
112,202 |
|
|
|
107,441 |
|
||||
Research and development |
|
14,977 |
|
|
|
14,456 |
|
|
|
29,794 |
|
|
|
28,996 |
|
||||
Impairment, restructuring and other charges, net. |
|
831 |
|
|
|
2,257 |
|
|
|
3,341 |
|
|
|
3,476 |
|
||||
Total operating expenses |
|
70,687 |
|
|
|
70,716 |
|
|
|
145,337 |
|
|
|
139,913 |
|
||||
Income from operations |
|
29,086 |
|
|
|
25,491 |
|
|
|
53,766 |
|
|
|
43,791 |
|
||||
Interest and other expense, net |
|
(2,217 |
) |
|
|
(5,180 |
) |
|
|
(4,233 |
) |
|
|
(8,612 |
) |
||||
Income before income taxes |
|
26,869 |
|
|
|
20,311 |
|
|
|
49,533 |
|
|
|
35,179 |
|
||||
Provision for income taxes |
|
(7,072 |
) |
|
|
(3,957 |
) |
|
|
(10,684 |
) |
|
|
(7,590 |
) |
||||
Net income |
$ |
|
19,797 |
|
|
$ |
|
16,354 |
|
|
$ |
|
38,849 |
|
|
$ |
|
27,589 |
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share |
$ |
|
1.09 |
|
|
$ |
|
0.96 |
|
|
$ |
2.13 |
|
|
$ |
|
1.61 |
|
|
Weighted average shares outstanding – diluted |
|
18,106 |
|
|
|
17,103 |
|
|
|
18,203 |
|
|
|
17,140 |
|
UNAUDITED SEGMENT INFORMATION (in thousands) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2021 |
|
2022 |
|
2021 |
|
2022 |
||||||||
Revenues – by Segment: |
|
|
|
|
|
|
|
||||||||
Security division |
$ |
145,918 |
|
|
$ |
167,443 |
|
|
$ |
295,435 |
|
|
$ |
312,436 |
|
Healthcare division |
|
52,425 |
|
|
|
43,520 |
|
|
|
103,013 |
|
|
|
87,083 |
|
Optoelectronics and Manufacturing division, including intersegment revenues |
|
91,490 |
|
|
|
98,710 |
|
|
|
183,795 |
|
|
|
192,625 |
|
Intersegment eliminations |
|
(13,152 |
) |
|
|
(14,076 |
) |
|
|
(26,305 |
) |
|
|
(28,476 |
) |
Total |
$ |
276,681 |
|
|
$ |
295,597 |
|
|
$ |
555,938 |
|
|
$ |
563,668 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) – by Segment: |
|
|
|
|
|
|
|
||||||||
Security division |
$ |
18,171 |
|
|
$ |
21,593 |
|
|
$ |
39,764 |
|
|
$ |
36,518 |
|
Healthcare division |
|
7,030 |
|
|
|
1,404 |
|
|
|
12,950 |
|
|
|
3,032 |
|
Optoelectronics and Manufacturing division |
|
13,382 |
|
|
|
12,212 |
|
|
|
23,165 |
|
|
|
23,470 |
|
Corporate |
|
(9,663 |
) |
|
|
(9,276 |
) |
|
|
(22,126 |
) |
|
|
(19,424 |
) |
Intersegment eliminations |
|
166 |
|
|
|
(442 |
) |
|
|
13 |
|
|
|
195 |
|
Total |
$ |
29,086 |
|
|
$ |
25,491 |
|
|
$ |
53,766 |
|
|
$ |
43,791 |
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
|||||
|
|
|
|
||
Assets |
|
|
|
||
|
|
|
|
||
Cash and cash equivalents |
$ |
64,202 |
|
$ |
45,600 |
Accounts receivable, net |
|
307,973 |
|
|
322,756 |
Inventories |
|
333,907 |
|
|
361,376 |
Other current assets |
|
40,062 |
|
|
37,703 |
Total current assets |
|
746,144 |
|
|
767,435 |
Property and equipment, net |
|
109,684 |
|
|
107,763 |
|
|
336,357 |
|
|
339,185 |
Intangible assets, net |
|
138,370 |
|
|
138,040 |
Other non-current assets |
|
112,595 |
|
|
113,807 |
Total Assets |
$ |
1,443,150 |
|
$ |
1,466,230 |
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
||
|
|
|
|
||
Bank lines of credit |
$ |
60,000 |
|
$ |
235,000 |
Current portion of long-term debt |
|
244,575 |
|
|
8,100 |
Accounts payable and accrued expenses |
|
194,266 |
|
|
189,438 |
Other current liabilities |
|
115,113 |
|
|
105,704 |
Total current liabilities |
|
613,954 |
|
|
538,242 |
Long-term debt |
|
48,668 |
|
|
140,057 |
Other long-term liabilities |
|
142,104 |
|
|
140,177 |
Total liabilities |
|
804,726 |
|
|
818,476 |
Total stockholders’ equity |
|
638,424 |
|
|
647,754 |
Total Liabilities and Stockholders’ Equity |
$ |
1,443,150 |
|
$ |
1,466,230 |
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME AND EARNINGS PER SHARE (in thousands, except earnings per share data) |
|||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||||||||||
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
||||||||||||||||||||
|
Net income |
|
EPS |
|
Net income |
|
EPS |
|
Net income |
|
EPS |
|
Net income |
|
EPS |
||||||||||||||||
GAAP basis |
$ |
19,797 |
|
|
$ |
1.09 |
|
|
$ |
16,354 |
|
|
$ |
0.96 |
|
|
$ |
38,849 |
|
|
$ |
2.13 |
|
|
$ |
27,589 |
|
|
$ |
1.61 |
|
Impairment, restructuring and other charges, net |
|
831 |
|
|
|
0.05 |
|
|
|
2,257 |
|
|
|
0.13 |
|
|
|
3,341 |
|
|
|
0.18 |
|
|
|
3,476 |
|
|
|
0.20 |
|
Amortization of acquired intangible assets |
|
3,162 |
|
|
|
0.18 |
|
|
|
3,768 |
|
|
|
0.22 |
|
|
|
6,360 |
|
|
|
0.36 |
|
|
|
7,488 |
|
|
|
0.44 |
|
Non-cash interest expense |
|
57 |
|
|
|
-- |
|
|
|
139 |
|
|
|
0.01 |
|
|
|
125 |
|
|
|
0.01 |
|
|
|
295 |
|
|
|
0.02 |
|
Tax benefit of above adjustments |
|
(1,009 |
) |
|
|
(0.06 |
) |
|
|
(1,418 |
) |
|
|
(0.09 |
) |
|
|
(2,476 |
) |
|
|
(0.14 |
) |
|
|
(2,690 |
) |
|
|
(0.16 |
) |
Discrete tax items |
|
347 |
|
|
|
0.02 |
|
|
|
(716 |
) |
|
|
(0.04 |
) |
|
|
(1,798 |
) |
|
|
(0.10 |
) |
|
|
(814 |
) |
|
|
(0.05 |
) |
Non-GAAP basis |
$ |
23,185 |
|
|
$ |
1.28 |
|
|
$ |
20,384 |
|
|
$ |
1.19 |
|
|
$ |
44,401 |
|
|
$ |
2.44 |
|
|
$ |
35,344 |
|
|
$ |
2.06 |
|
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME (LOSS) AND OPERATING MARGIN BY SEGMENT (in thousands, except percentages) |
||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||
|
|
Security Division |
|
Healthcare Division |
|
Optoelectronics and
|
|
Corporate /
|
|
Total |
||||||||||||||||||
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
|
|
% of
|
||||||||||
GAAP basis – operating income (loss) |
|
$ |
18,871 |
|
12.5 |
% |
|
$ |
7,030 |
|
13.4 |
% |
|
$ |
13,382 |
|
14.6 |
% |
|
$ |
(9,497 |
) |
|
$ |
29,086 |
|
10.5 |
% |
Impairment, restructuring and other charges, net |
|
|
353 |
|
0.2 |
% |
|
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
478 |
|
|
|
831 |
|
0.3 |
% |
Amortization of acquired intangible assets |
|
|
2,251 |
|
1.5 |
% |
|
|
201 |
|
0.4 |
% |
|
|
710 |
|
0.8 |
% |
|
|
- |
|
|
|
3,162 |
|
1.2 |
% |
Non-GAAP basis– operating income (loss) |
|
$ |
20,775 |
|
14.2 |
% |
|
$ |
7,231 |
|
13.8 |
% |
|
$ |
14,092 |
|
15.4 |
% |
|
$ |
(9,019 |
) |
|
$ |
33,079 |
|
12.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Three Months Ended |
||||||||||||||||||||||||||||
|
|
Security Division |
|
Healthcare Division |
|
Optoelectronics and
|
|
Corporate /
|
|
Total |
||||||||||||||||||
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
|
|
% of
|
||||||||||
GAAP basis – operating income (loss) |
|
$ |
21,593 |
|
12.9 |
% |
|
$ |
1,404 |
|
3.2 |
% |
|
$ |
12,212 |
|
12.4 |
% |
|
$ |
(9,718 |
) |
|
$ |
25,491 |
|
8.6 |
% |
Impairment, restructuring and other charges, net |
|
|
77 |
|
0.0 |
% |
|
|
2,152 |
|
4.9 |
% |
|
|
- |
|
- |
|
|
|
28 |
|
|
|
2,257 |
|
0.8 |
% |
Amortization of acquired intangible assets |
|
|
2,883 |
|
1.8 |
% |
|
|
201 |
|
0.5 |
% |
|
|
684 |
|
0.7 |
% |
|
|
- |
|
|
|
3,768 |
|
1.3 |
% |
Non-GAAP basis– operating income (loss) |
|
$ |
24,553 |
|
14.7 |
% |
|
$ |
3,757 |
|
8.6 |
% |
|
$ |
12,896 |
|
13.1 |
% |
|
$ |
(9,690 |
) |
|
$ |
31,516 |
|
10.7 |
% |
Six Months Ended |
||||||||||||||||||||||||||||
|
|
Security Division |
|
Healthcare Division |
|
Optoelectronics and
|
|
Corporate /
|
|
Total |
||||||||||||||||||
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
|
|
% of
|
||||||||||
GAAP basis – operating income (loss) |
|
$ |
39,764 |
|
14.5 |
% |
|
$ |
12,950 |
|
12.6 |
% |
|
$ |
23,165 |
|
12.6 |
% |
|
$ |
(22,113 |
) |
|
$ |
53,766 |
|
9.7 |
% |
Impairment, restructuring and other charges, net |
|
|
628 |
|
0.2 |
% |
|
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
2,713 |
|
|
|
3,341 |
|
0.6 |
% |
Amortization of acquired intangible assets |
|
|
4,537 |
|
1.5 |
% |
|
|
403 |
|
0.8 |
% |
|
|
1,420 |
|
0.8 |
% |
|
|
- |
|
|
|
6,360 |
|
1.1 |
% |
Non-GAAP basis– operating income (loss) |
|
$ |
44,929 |
|
15.2 |
% |
|
$ |
13,353 |
|
13.4 |
% |
|
$ |
24,585 |
|
13.4 |
% |
|
$ |
(19,400 |
) |
|
$ |
63,467 |
|
11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Six Months Ended |
||||||||||||||||||||||||||||
|
|
Security Division |
|
Healthcare Division |
|
Optoelectronics and
|
|
Corporate /
|
|
Total |
||||||||||||||||||
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
|
|
% of
|
||||||||||
GAAP basis – operating income (loss) |
|
$ |
36,518 |
|
11.7 |
% |
|
$ |
3,032 |
|
3.5 |
% |
|
$ |
23,470 |
|
12.2 |
% |
|
$ |
(19,229 |
) |
|
$ |
43,791 |
|
7.8 |
% |
Impairment, restructuring and other charges, net |
|
|
865 |
|
0.3 |
% |
|
|
2,446 |
|
2.8 |
% |
|
|
15 |
|
0.0 |
% |
|
|
150 |
|
|
|
3,476 |
|
0.6 |
% |
Amortization of acquired intangible assets |
|
|
5,703 |
|
1.8 |
% |
|
|
403 |
|
0.5 |
% |
|
|
1,382 |
|
0.7 |
% |
|
|
- |
|
|
|
7,488 |
|
1.3 |
% |
Non-GAAP basis– operating income (loss) |
|
$ |
43,086 |
|
13.8 |
% |
|
$ |
5,881 |
|
6.8 |
% |
|
$ |
24,867 |
|
12.9 |
% |
|
$ |
(19,079 |
) |
|
$ |
54,755 |
|
9.7 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005383/en/
Vice President, Business Development
Tel: (310) 349-2237
avashishat@osi-systems.com
Source:
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