OSI Systems [OSIS]
4Q14 4Q13 FY14 FY13
Sales $260.1M $227.9M $906.7M $802M
Net Inc. $22.1, $1.07 $11.8M, 0.58 $47.9M, $2.33 $44.1M, $2.15
Sales increased 14% to a record due almost entirely too substantial revenue growth at the company’s Security segment, Rapiscan Systems, which increased its top line by 45% 10 $141.7 million. Rapiscan benefited from higher revenues from the company’s turnkey screening services contract with Mexico, $23 million in shipments under a new Defense Department foreign military sales contract for vehicle and cargo inspection systems in Iraq, and increases across the product portfolio. The total FMS contract related to Iraq is worth $102 million and company officials indicate there is potential for additional work. OSI’s net income benefited from lower overall operating expenses, lower taxes, and higher operating profit at Rapiscan, which rose 35% to $18.5 million. The company’s per share earnings were a quarterly record. Rapiscan’s bottom line results include $1.7 million in impairment, restructuring and other charges. The gains at Rapiscan more than offset flattish sales at the Optoelectronics and Manufacturing Group, which posted a decline in operating profits, and lower sales and profits at the Healthcare Group. Deepak Chopra, OSI’s president and CEO, says the healthcare business has been hit by delayed procurements by its customers. Backlog at the end of the quarter was just above $800 million with Rapiscan’s accounting for just over $700 million of the total. Rapiscan’s bookings were $184 million in the quarter, excluding business from its turnkey services contracts. Free cash flow in the quarter was a negative $1.5 million and for the year a positive $74.2 million. Based on strength at Rapiscan, OSI predicts its sales in fiscal year 2015 will rise to between $960 million and $985 million while net earnings, excluding charges, impairments and certain tax elections, will rise between 12% and 20% to between $3.50 and $3.75 EPS. OSI spent $12 million on research and development during the year, down from $12.7 million a year ago, and expects to ramp up that spending in fiscal year 2015 to focus on product development.