OSIS OSI Systems Inc

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 24, 2024

 

 

OSI SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

 

Delaware	000-23125	33-0238801
(STATE OR OTHER JURISDICTION OF INCORPORATION)	(COMMISSION FILE NUMBER)	(IRS EMPLOYER 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)

 

N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT.)

 

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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		OSIS		The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company     ¨ 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨ 

 

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On October 24, 2024, we issued a press release announcing our financial results for the quarter ended September 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein 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 any purpose, including for the 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, regardless of any general incorporation language in such filing.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits

 

	Exhibit 99.1:	Press Release of OSI Systems, Inc. dated October 24, 2024.
	Exhibit 104:	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release of OSI Systems, Inc. dated October 24, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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: October 24, 2024
	By:	/s/ Alan Edrick
		Alan Edrick
		Executive Vice President and Chief Financial Officer

 

 

 

Exhibit 99.1

 

OSI SYSTEMS REPORTS FISCAL 2025 FIRST QUARTER

FINANCIAL RESULTS

 

·

Record Fiscal Q1 Revenues of $344 Million (23% growth year-over-year)

·

Q1 Earnings Per Diluted Share

o

GAAP EPS of $1.05

o

Record Q1 Non-GAAP Adjusted EPS of $1.25

·

Q1 Operating Income Growth of 34% Year-Over-Year

·

Q1-Ended Backlog of Approximately $1.8 Billion

·

Company Increases Fiscal 2025 Revenues and Non-GAAP Adjusted Diluted EPS Guidance

 

HAWTHORNE, Calif. — (BUSINESS WIRE) — October 24, 2024—OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced its financial results for the first quarter of fiscal 2025.

 

Deepak Chopra, OSI Systems’ Chairman and Chief Executive Officer, stated “We are pleased to kick off fiscal 2025 with a strong first quarter in which we posted record Q1 revenues and non-GAAP earnings per share led again by outstanding growth in the Security division. Given our robust backlog and high visibility into the opportunity pipeline, we anticipate a strong fiscal year.”

 

For Q1 FY25, the Company reported revenues of $344.0 million, a 23% increase over the $279.2 million reported for the same quarter of the prior year. Net income for Q1 FY25 was $17.9 million, or $1.05 per diluted share, compared to net income of $12.9 million, or $0.75 per diluted share, for the same quarter of the prior year. Non-GAAP net income for Q1 FY25 was $21.3 million, or $1.25 per diluted share, compared to non-GAAP net income for the same quarter of the prior year of $15.6 million, or $0.91 per diluted share.

 

The Company's backlog was approximately $1.8 billion as of September 30, 2024, compared to approximately $1.7 billion as of June 30, 2024. For Q1 FY25, net cash used in operating activities was $37.2 million, driven primarily by increases in working capital to support planned future growth. Capital expenditures were $7.7 million and depreciation and amortization was $11.5 million for Q1 FY25. The Company repurchased 531,314 shares during Q1 FY25 for an aggregate cost of approximately $80 million.

 

Mr. Chopra commented, “The Security division results reflect continuing strong momentum with heightened demand for our product and service offerings, as well as our superior competitive position. The Security division’s revenues in the first quarter of fiscal 2025 increased 36% year-over-year, leading to significant operating income growth and year-over-year adjusted operating margin expansion. During the quarter, we acquired a business that provides critical military, space and surveillance solutions, which is expected to be complementary to our sales channel. Security bookings were solid and we ended the quarter with near-record backlog in this division. This provides us significant confidence that the Security division is well-positioned for the future.”

 

Mr. Chopra continued, “Our Optoelectronics and Manufacturing division delivered solid quarterly results, reporting year-over-year revenue growth despite certain customers continuing to adjust inventory levels and purchasing patterns. The division continues to benefit from our global manufacturing footprint with exposure across multiple end markets.”

 

Mr. Chopra concluded, “During the first quarter of fiscal 2025, we saw improved margins in the Healthcare division on a comparable level of revenues with the same quarter of the prior year. We continue to focus on new product development, principally in our patient monitoring portfolio.”

 

In July 2024 the Company issued $350 million of convertible senior notes due in fiscal 2030 at an interest rate of 2.25%. The net proceeds of the issuance were partially used to reduce the outstanding balance under the Company’s revolving credit facility and to repurchase shares of common stock.

 

 

Fiscal Year 2025 Outlook

 

		Current Updated Guidance		Previous Guidance
Revenues		$1.670 billion - $1.695 billion		$1.620 billion - $1.650 billion
Growth Rate		8.5% - 10.2%		5.3% - 7.2%
Non-GAAP Adjusted Diluted Earnings Per Share		$9.00 - $9.30		$8.80 - $9.15
Growth Rate		10.7% - 14.4%		8.2% - 12.5%

 

The Company is increasing its fiscal 2025 revenues and non-GAAP adjusted diluted earnings per share guidance. 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 2025 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, 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 FY25. 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, 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 2025 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.

 

For Additional Information, Contact:

 

OSI Systems, Inc.

Ajay Vashishat

Vice President, Business Development

Tel: (310) 349-2237

avashishat@osi-systems.com

 

 

OSI SYSTEMS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED Consolidated Statements of Operations

(in thousands, except per share data)

 

		Three Months Ended September 30,
		2023				2024
Revenues:
Products		$	199,709			$	255,808
Services			79,501				88,199
Total net revenues			279,210				344,007
Cost of goods sold:
Products			136,983				170,422
Services			43,482				52,083
Total cost of goods sold			180,465				222,505
Gross profit			98,745				121,502
Operating expenses:
Selling, general and administrative			59,798				72,223
Research and development			15,922				17,773
Restructuring and other charges, net			466				1,178
Total operating expenses			76,186				91,174
Income from operations			22,559				30,328
Interest and other expense, net			(5,748	)			(7,359	)
Income before income taxes			16,811				22,969
Provision for income taxes			(3,932	)			(5,033	)
Net income		$	12,879			$	17,936
Diluted earnings per share		$	0.75			$	1.05
Weighted average shares outstanding – diluted			17,175				17,055

 

UNAUDITED Segment Information

(in thousands)

 

		Three Months Ended September 30,
		2023				2024
Revenues – by Segment:
Security division		$	164,629			$	224,314
Optoelectronics and Manufacturing division, including intersegment revenues			96,128				97,795
Healthcare division			37,787				37,102
Intersegment eliminations			(19,334	)			(15,204	)
Total		$	279,210			$	344,007
Operating income (loss) – by Segment:
Security division		$	20,609			$	28,856
Optoelectronics and Manufacturing division			11,437				10,609
Healthcare division			164				800
Corporate			(9,916	)			(9,510	)
Intersegment eliminations			265				(427	)
Total		$	22,559			$	30,328

 

 

 

OSI SYSTEMS, INC. AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

(in thousands)
		June 30, 2024				September 30, 2024
Assets
Cash and cash equivalents		$	95,353			$	85,053
Accounts receivable, net			648,155				687,610
Inventories			397,939				456,030
Prepaid expenses and other current assets			74,077				81,310
Total current assets			1,215,524				1,310,003
Property and equipment, net			113,967				124,613
Goodwill			351,480				381,444
Intangible assets, net			139,529				183,222
Other non-current assets			115,508				114,232
Total Assets		$	1,936,008			$	2,113,514
Liabilities and Stockholders' Equity
Bank lines of credit		$	384,000			$	259,000
Current portion of long-term debt			8,167				8,217
Accounts payable and accrued expenses			248,427				269,067
Other current liabilities			174,043				176,252
Total current liabilities			814,637				712,536
Long-term debt			129,383				468,084
Other long-term liabilities			128,505				146,399
Total liabilities			1,072,525				1,327,019
Total stockholders’ equity			863,483				786,495
Total Liabilities and Stockholders’ Equity		$	1,936,008			$	2,113,514

 

 

Reconciliation of GAAP to Non-GAAP
NET INCOME AND EARNINGS PER SHARE
(in thousands, except earnings per share data)

 

		Three Months Ended September 30,
		2023								2024
		Net income				Diluted EPS				Net income				Diluted EPS
GAAP basis		$	12,879			$	0.75			$	17,936			$	1.05
Restructuring and other charges, net			466				0.02				1,178				0.07
Amortization of acquired intangible assets			3,707				0.22				3,867				0.23
Non-cash interest expense			-				-				-				-
Tax effect of above adjustments			(1,079	)			(0.06	)			(1,211	)			(0.07	)
Discrete tax benefit			(413	)			(0.02	)			(482	)			(0.03	)
Non-GAAP basis		$	15,560			$	0.91			$	21,288			$	1.25

 

RECONCILIATION OF GAAP TO NON-GAAP

OPERATING INCOME (LOSS) AND OPERATING MARGIN BY SEGMENT

(in thousands, except percentages)

 

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	%
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	%

 

Three Months Ended September 30, 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)		$	28,856				12.9	%		$	10,609				10.8	%		$	800				2.2	%		$	(9,937	)		$	30,328				8.8	%
Restructuring and other charges, net			479				0.2	%			547				0.6	%			152				0.4	%			-				1,178				0.3	%
Amortization of acquired intangible assets			2,986				1.3	%			580				0.6	%			301				0.8	%			-				3,867				1.2	%
Non-GAAP basis– operating income (loss)		$	32,321				14.4	%		$	11,736				12.0	%		$	1,253				3.4	%		$	(9,937	)		$	35,373				10.3	%

 

 

v3.24.3

Cover	Oct. 24, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 24, 2024
Entity File Number	000-23125
Entity Registrant Name	OSI SYSTEMS, INC.
Entity Central Index Key	0001039065
Entity Tax Identification Number	33-0238801
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	12525 CHADRON AVENUE
Entity Address, City or Town	HAWTHORNE
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90250
City Area Code	310
Local Phone Number	978-0516
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OSIS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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