OSI Systems [OSIS]
1Q19 4Q18
Sales $266.2M $257.1M
Net Inc. $9.4M, 0.50 $10.2M, 0.52
Sales increased 4% to a record on a record $170 million in revenue at the Rapiscan Systems security segment, which was up 5% and higher sales in the Optoelectronics and Manufacturing segment. Security sales were higher on cargo and vehicle inspection systems, and service. Net income fell 8% due to a swing to an operating loss at the Healthcare segment and lower sales on the turnkey security services contract with Mexico and sales a year ago of explosive trace detectors to the Department of Homeland Security. Operating income at Rapiscan rose nearly 2% to $23.1 million, with the cargo equipment and baggage inspection and explosive trace detection margins contributing to the gain, more than offsetting the declines in the Mexico contract. Rapiscan recorded bookings of around $230M for a 1.5 book-to-bill ratio as orders poured in from U.S. and international customers. Deepak Chopra, OSI’s chairman and CEO, said on the company’s earnings call that the strong order flow was due to continued expansion of “our border security and airport infrastructure efforts in Europe and Asia.” He says U.S. orders were over $100 million. The turnkey services contracts in Albania, Mexico and Puerto Rico continue to do well and the company will be going live in fiscal year 2019 with two contracts that require integrated services and support. Rapiscan also continues to penetrate the event security market and will provide security at several sporting events this year, he adds. OSI raised sales guidance slightly but still within the range of $1.1B and $1.2B and raised EPS outlook by a nickel to between $3.85 and $4.05. Backlog was just over $1 billion at the end of the quarter.