OSI Systems [OSIS]
3Q17 3Q16
Sales $245.1M $210.8M
Net Inc. $14M, 0.72 $9.3M, 0.47
Sales jumped 16% to a record, driven by record revenue in the Security segment, Rapiscan Systems. Rapiscan’s sales soared 31% to $144.8 million, with 25% of the gain coming from the acquisition of American Science & Engineering last fall and the rest from organic growth. The organic growth was due to sales of its Real Time Tomography explosives detection system to international customers to screen checked baggage at airports. The 51% increase in net income was primarily driven by a 25% gain at Rapiscan to $18.3 million, followed by a swing to nearly $1 million in profit at the Healthcare segment, and a modest uptick at the Optoelectronics and Manufacturing segment. The company says gross margins were higher due to improvements in the a stronger dollar related to its turnkey screening services business, a strong quarter by AS&E, and product mix in the Opto segment. Bookings in the Security segment were $132 million in the quarter. OSI’s updated sales guidance for FY ’17 is $950 million to $970 million, down from expectations in the second quarter of $955 million to $990 million in sales due the divesture of a healthcare business and the timing of contract awards slipping into the next fiscal year. The company narrowed its earnings guidance to between $2.85 and $3.05 EPS from the prior outlook of between $2.80 to $3.20 EPS.