OSI Systems [OSIS]
4Q19 4Q18 FY19 FY20
Sales $308.4M $287.3M $1.2B $1.1B
Net Inc. $16.7M, 0.89 $5.1M, 0.27 $64.8M, 3.46 ($29.2M, 1.57)
Profits in the quarter more than tripled due to significant improvements in operating income at all three of the company’s segments and a steep drop in restructuring charges, which combined to more than offset higher taxes. Sales increased 7% overall to a quarterly record, driven primarily by an increase in the Security segment followed by the Optoelectronics and Manufacturing segment. Security revenue increased 6% to a record $195.4 million on demand for its cargo inspection systems and RTT systems that screen checked bags at airports for international customers. Security segment operating income increased 30 percent to $23.4 million on higher sales, a 90-basis point expansion in operating margin, and lower restructuring and impairment charges. Orders in the quarter were level with sales and backlog stood at $911 million. Deepak Chopra, OSI’s chairman and CEO, said on the company’s earnings call that activity around Security products was up worldwide in FY ’19, noting that demand in Europe for new checked baggage inspection systems is driving RTT sales. He also said international customers are also acquiring RTT systems for air cargo applications and that cargo inspection sales are up due to increased commercial international trade. OSI’s relatively new ORION X-Ray system for checkpoint applications is gaining traction. Two small turnkey services contracts with Guatemala and a customer in Southeast Asia will begin generating sales in the back half of FY ’20, he said. OSI also has a new integrated services contract with a customer in the Middle East, he said. OSI initiated guidance for FY ’20, with sales expected to be between $1.2 billion and $1.3 billion and adjusted earnings between $4.58 and $4.80 per share. Adjusted income in FY ’19 was $4.32 per share.