OSI Systems [OSIS]
4Q15 4Q14 FY2015 FY2014
Sales $266.6M $260.1M $958.2M $906.7M
Net Inc. $22.4M, $1.09 $22.1M, 1.07 $65.2M, $3.17 $47.9M, 2.33
Net income edged up a percent in the quarter on handsome gains in its Healthcare division, which more than offset profit declines in the Rapiscan security, and Optoelectronics and Manufacturing divisions. Operating profit at Rapiscan slipped nearly 9% to $16.9 million due to a tough comparison versus a year ago when the division benefited from a foreign military sale to Iraq. Sales in the quarter were a record and were up 2%, again driven by a rebound in the Healthcare division. Sales at Rapiscan fell 7% to $131.5 million due to the lack of foreign military sales to Iraq, which added $23 million to the top line a year ago. Deepak Chopra, OSI’s president and CEO, said one of the quarter’s highlights at Rapiscan was a $27 million contract with Rome airport in Italy for the Real Time Tomography (RTT) explosive detection system. He says additional customers in Europe and the Asia Pacific region have been booked for RTT systems, and that proposal activity for the systems is “robust” Europe. The company’s RTT80 was certified by the Transportation Security Administration in the U.S. earlier this year and the company expects to submit its RTT110 for TSA certification testing. Rapiscan had $142 million in bookings in the quarter. Turnkey services continue to provide strong contributions to the top and bottom lines, says Chopra, and there is still a pipeline of opportunities for additional customers here. In May OSI said that it had moved then Rapiscan President Ajay Mehra to a new position overseeing its OSI Solutions business, which will focus on turnkey solutions in security and healthcare to include third party technologies. Overall the company’s bookings in the quarter were 1.2 times sales and backlog stood at $638 million, with Rapiscan accounting for $512 million. Free cash flow was $12 million and for the year $90 million, a record. Sales in FY ’16 are expected to be between $985 million and $1.2 billion with earnings between $3.75 and $4 per share. All three of the company’s operating segments are expected to grow.