OSI Systems Reports Record Revenues for 2003 Fiscal Third Quarter.Business Editors HAWTHORNE, Calif.--(BUSINESS WIRE)--May 2, 2003 OSI Systems OSI Systems, Inc. (NASDAQ: OSIS) is a worldwide company based in California that develops and markets security and inspection systems such as airport security X-ray machines and metal detectors, medical monitoring and anesthesia systems, and optoelectronic devices. , Inc. (Nasdaq:OSIS OSIS Open Source Information System (now Intelink-U; US DOD) OSIS Ocean Surveillance Information System OSIS One-Stop Internet Shop (European Union) OSIS Open Scriptural Information Standard ): -- Revenues increased 58.5% from year ago period to $50.9 million -- Net income increased 57.2% from year ago period to $3.6 million -- Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States Secretary Tom Ridge Thomas Joseph Ridge (born August 27 1945 near Pittsburgh, Pennsylvania) is an American politician who served as a member of the United States House of Representatives (1983–1995), Governor of Pennsylvania (1995–2001), Assistant to the President for Homeland Security Views Gamma Portal Inspection System at Otay Mesa Border -- Metal Detector detector: see particle detector. Subsidiary Receives TSA TSA See tax-sheltered annuity (TSA). Certification for U.S. Airport Deployment OSI Systems, Inc. (Nasdaq:OSIS) today announced revenues and earnings for its third fiscal quarter and nine months ended March 31, 2003. The Company's revenues for the third quarter of fiscal 2003 were $50.9 million, compared to $32.1 million in the same quarter last year, an increase of 58.5%. Net income for the third quarter was $3.6 million compared to $2.3 million in the same quarter last year, an increase of $1.3 million or 57.2%. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the third quarter of fiscal 2003 was $0.24 on 15.0 million shares compared to $0.17 on 13.4 million shares in the same quarter last year. Excluding the impact of a pre-tax charge of $1 million for the reduction in market value of a previously disclosed strategic equity investment totaling $1.75 million in a publicly traded biometric bi·o·met·rics n. (used with a sing. verb) The statistical study of biological phenomena. bi company, pro-forma net income for the third quarter of fiscal 2003 was $4.3 million, compared to $2.3 million in the same quarter last year, an increase of $2.0 million or 88.9%. Excluding the pre-tax charge, pro-forma diluted earnings per share for the third quarter of fiscal 2003 was $0.29 on 15.0 million shares compared to $0.17 on 13.4 million shares in the same quarter last year. For the nine months ended March 31, 2003, the Company's revenues were $131.7 million compared to $88.6 million in the year-ago nine month period ended March 31, 2002. This represents an increase of $43.1 million or 48.6%. Net income for the nine months ended March 31, 2003 was $10.6 million or $0.73 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to net income for the first three quarters of the prior year of $4.0 million or $0.37 per diluted share. Excluding the impact of a pre-tax charge of $1 million for the reduction in market value of a previously disclosed strategic equity investment in a publicly traded biometric company in the third quarter and a previously disclosed pre-tax charge of $608,000 for the write off of deferred acquisition costs in the second quarter, the pro-forma net income for the first three quarters of the current year increased to $11.7 million or pro-forma diluted earnings per share of $0.81 compared to net income for the first three quarters of the prior year of $4.0 million or $0.37 per diluted share. Additionally, management provided guidance of $91-93 million in revenues for the six month period ending September 30, 2003 and reaffirmed guidance for this fiscal year ending June 30, 2003 of $175 million in revenues and an earnings per share of $1.01, including the acquisition-related charge in the second quarter of $0.03 per share and the investment write off in the third quarter of $0.05 per share. Pro-forma net income and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. information have been provided for assistance in making comparisons to historical results and previously issued guidance for the fiscal year 2003. A detailed reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income and EPS results with pro-forma net income and EPS results has been provided in the tables that follow. Deepak Chopra Deepak Chopra (Hindi: दीपक चोपड़ा; born October 22, 1946) is an Indian medical doctor and writer. He has written extensively on spirituality and diverse topics in mind-body medicine. , OSI (1) (Open System Interconnection) An ISO standard for worldwide communications that defines a framework for implementing protocols in seven layers. Control is passed from one layer to the next, starting at the application layer in one station, proceeding to the Systems' Chairman and Chief Executive Officer, commented, "We continue to demonstrate solid results because of worldwide demand for our security products. This is despite the fact that both the Iraq conflict and SARS epidemic epidemic, outbreak of disease that affects a much greater number of people than is usual for the locality or that spreads to regions where it is ordinarily not present. have occurred during this last fiscal period, causing a global slow-down in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. ." Chopra continued, "Additionally, we were honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. to have Governor Tom Ridge, Secretary for Homeland Security, view a demonstration of our Gamma Inspection Portal during his recent April visit to the U.S.-Mexican border at Otay Mesa. The installation was provided to the Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum Government by Rapiscan as a demonstration of our advanced technology. Both President Bush and Secretary Ridge have highlighted the need for collaborative inspection at our nation's extensive borders." "We are pleased to report that the TSA has certified See certification. our M200HDS (Hitachi Data Systems, Santa Clara, CA, www.hds.com) A leading provider of high-end storage hardware, software and services. Part of the Information Systems & Telecommunications Division of Hitachi Ltd. walk-through metal detector for use in passenger screening at U.S. airports," said Ajay Mehra, President of OSI Systems Security Group. "This, combined with our existing certification for TRX TRX Transceiver TRX Transaction TRx Total Prescription TRX Token Ring Switch TRX Transmit and Receive carry-on baggage inspection systems makes us the only TSA vendor to offer both these capabilities." OSI Systems, Inc. will webcast the live earnings call over the Internet at 1:30 p.m. PT, today. To listen, please log on www.companyboardroom.com and follow the link that will be posted on the front page. A replay of the webcast will be available shortly after the presentation and will be archived on www.companyboardroom.com. A telephonic replay of the call will also be available from 3:30 p.m. Pacific Time on May 2 to 3:30 p.m. Pacific Time on May 4 and may be accessed by calling 800-633-8284 and entering the conference call identification number 21143014. About OSI Systems Inc. OSI Systems Inc. is a diversified diversified (di·verˑ·s global developer, manufacturer and seller of optoelectronic-based components and systems. The company has more than 30 years of optoelectronics See optoelectronic. experience, and through its family of subsidiaries, competes in four specific growth areas: OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and Manufacturing, Security, Medical and Fiber Optics fiber optics, transmission of digitized messages or information by light pulses along hair-thin glass fibers. Each fiber is surrounded by a cladding having a high index of refractance so that the light is internally reflected and travels the length of the fiber . For more information on OSI Systems Inc. or any of its subsidiary companies, visit www.osi-systems.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties including those risks detailed in the company's Securities and Exchange Commission filings that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. In addition to the factors discussed in the filings with the Securities and Exchange Commission, among the other factors that could cause actual results to differ materially are the following: adverse changes in the business conditions and the general economy; competitive factors, such as rival companies' pricing and marketing efforts; availability of third-party material products at reasonable prices; the financial condition of the customer; risks of obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. due to shifts in market demand; and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. involving product liabilities and consumer issues; and a change in the demand for security systems based upon the ever changing domestic and international political climate.
OSI Systems Inc., and Subsidiaries
Consolidated Statement of Operations
(in thousands, except share and per share amounts)
Three months ended Nine months ended
March 31, March 31,
2003 2002 2003 2002
Revenues $50,946 $32,134 $131,720 $88,633
Cost of goods sold 34,852 21,721 88,159 62,342
Gross profit 16,094 10,413 43,561 26,291
Operating expenses:
Selling, general
and administrative 7,474 5,493 21,064 15,385
Research and
development 2,702 1,706 6,462 4,862
Goodwill
amortization 101 303
Total operating expenses 10,176 7,300 27,526 20,550
Income from operations 5,918 3,113 16,035 5,741
Interest (income)
expense, net (203) (180) (584) 51
Write-off of deferred
acquisition costs -- 608
Write-off of equity
Investment 1,026 1,026
Income before
provision for income
taxes and minority
interest 5,095 3,293 14,985 5,690
Provision for income
taxes 1,447 933 4,332 1,635
Income before
minority interest 3,648 2,360 10,653 4,055
Minority interest (41) (65) (85) (65)
Net Income $3,607 $2,295 $10,568 $3,990
Net income available
to common
shareholders $3,607 $2,295 $10,568 $3,990
Diluted earnings per
share $0.24 $0.17 $0.73 $0.37
Weighted average
shares outstanding
assuming dilution 15,002,341 13,387,798 14,398,684 10,860,778
Condensed Consolidated Balance Sheets
(in thousands)
March 31, June 30,
2003 2002
Cash and cash equivalents $70,965 $67,604
Marketable securities 20,269 539
Accounts receivable, net of allowance for
doubtful accounts 41,027 38,812
Inventory 49,201 36,512
Other current assets 9,099 6,662
Total current assets 190,561 150,129
Non current assets 43,806 25,229
Total $234,367 $175,358
Bank lines of credit $29 $--
Current portion of long-term debt 2,625 2,625
Other current liabilities 54,634 31,873
Total current liabilities 57,288 34,498
Long-term debt 2,481 4,463
Other long term liabilities 599 584
Minority interest 164 79
Shareholders' equity 173,835 135,734
Total $234,367 $175,358
Amortization Impact of Adoption of SFAS No. 142
"Goodwill and Other Intangible Assets"
(in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
2003 2002 2003 2002
Operating income:
As reported $5,918 $3,113 $16,035 $5,741
Add back amortization of
goodwill -- 101 -- 303
Adjusted operating income $5,918 $3,214 $16,035 $6,044
Net income:
As reported $3,607 $2,295 $10,568 $3,990
Add back amortization of
goodwill, net of tax -- 101 -- 303
Adjusted net income $3,607 $2,396 $10,568 $4,293
Diluted earnings per share:
As reported $0.24 $0.17 $0.73 $0.37
Add back amortization of
goodwill, net of tax -- 0.01 -- 0.03
Adjusted diluted
earnings per share $0.24 $0.18 $0.73 $0.40
Reconciliation of GAAP Net Income and
EPS with Proforma Net Income and EPS
(in thousands, except share and per share amounts)
Three months ended Nine months ended
March 31, March 31,
2003 2002 2003 2002
GAAP Net Income $3,607 $2,295 $10,568 $3,990
Add
Write off of
deferred
acquisition costs
(net of tax) -- -- 432 --
Write-off of
equity investment
(net of tax) 728 -- 728 --
Proforma net income $4,335 $2,295 $11,728 $3,990
GAAP Diluted earnings
per share $0.24 $0.17 $0.73 $0.37
Add
Write off of
deferred
acquisition costs
(net of tax) -- -- 0.03 --
Write-off of
equity investment
(net of tax) 0.05 -- 0.05 --
Proforma Diluted
earnings per share $0.29 $0.17 $0.81 $0.37
Weighted average
shares outstanding
assuming dilution 15,002,341 13,387,798 14,398,684 10,860,778
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