OSI Systems [OSIS]
4Q16 4Q15 FY16 FY15
Sales $221.5 $266.6 $829.7M $958.2M
Net Inc. $5.9M, 0.30 $22.4M, 1.09 $26.2M, $1.30$65.2M, $3.17
Sales fell 17% on declines across all three of the company’s segments with the Security and Healthcare businesses off the most. Sales in the Rapiscan Systems security segment fell 19% to $110.5 million due to contract delays and a slower conversion of backlog into revenue, says Deepak Chopra, the company’s president and CEO. For example, he says, a $20 million shipment to one customer planned for the fourth quarter was delayed at the request of the customer with most of it likely to be delivered in the second quarter. Net income tumbled 74% on the lower sales on higher restructuring and impairment charges. The biggest drop in operating income was in the Healthcare segment followed by a 52% slide at Rapiscan to $8.1 million due in part to the lower sales and a mix toward lower margin products. OSI’s overall selling, general and administrative expenses were higher despite the lower sales and research and development expenses as a percentage of sales increased. Bookings in the quarter equaled sales and backlog stood at $623 million with about $500 million in the Security segment. Security bookings for the year were just under $400 million and sales were $411.2 million. For FY ’17 OSI is projecting overall sales to grow between 4% and 8% to between $865 million to $895 million. Earnings, excluding restructuring and other charges, are expected to grow between 23% and 37% to between $2.60 to $2.90 EPS. Chopra says sales of the company’s RTT explosive detection system for checked baggage screening are expected to be substantial given orders in FY ’16 and continuing into the new year. Benchmark Co. analyst Josephine Millward predicts that OSI’s RTT sales will ramp up from about $10 million currently to more than $50 million in FY ’17. OSI’s outlook excludes the pending acquisition of American Science and Engineering [ASEI].