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OSI Systems Inc. has reported revenues of $287 million for the fourth quarter of fiscal year ended June 30, 2018, an increase of 14% from the $252 million reported for the same period in the previous year. Net income for the fourth quarter of FY 2018 was $5.1 million, compared to net income of $1.5 million for the fourth quarter of FY 2017.
"We are pleased to announce a strong finish to fiscal 2018 highlighted by impressive sales and bookings in the Security division. We are proud to have surpassed $1 billion in annual sales for the first time in our history. We enter fiscal 2019 with a strong backlog, an enhanced leadership team, and heightened focus on our core strengths," says Deepak Chopra, OSI Systems’ chairman and chief executive officer. "For the fiscal year ended June 30, 2018, OSI Systems reported revenues of $1.089 billion, an increase of 13% over revenues in the prior fiscal year. Net loss for fiscal 2018 was $29.1 million, or $(1.57) per diluted share, compared to net income of $21.1 million, or $1.07 per diluted share, in the prior fiscal year. Non-GAAP net income for the fiscal year ended June 30, 2018 was $69.5 million, or $3.61 per diluted share, compared to non-GAAP net income of $58.8 million, or $2.99 per diluted share, for the 2017 fiscal year.
"During the three months ended June 30, 2018, the company's book-to-bill ratio for equipment and related services (non-turnkey) was approximately 1.3. As of June 30, 2018, the company's backlog was $976 million, compared to $738 million as of June 30, 2017. For the three months and fiscal year ended June 30, 2018, cash flow from operations was $17 million and $133 million, respectively, as compared to $11 million and $63 million for the three months and fiscal year ended June 30, 2017.
"Our Security division finished the year with strong revenues and backlog. Fourth quarter revenues in the division increased 26% to a record $185 million. Excluding $17.5 million of revenues from the trace detection business that we acquired in July 2017, fourth quarter sales in our Security division increased 14% over sales in the same prior-year fiscal period. During the quarter, we won several notable orders with overall Security division bookings of $198 million."
The Optoelectronics and Manufacturing division continued the steady performance seen throughout fiscal 2018. Fourth quarter sales increased 9% on a year-over-year basis. However, one of the company's businesses within this division incurred an operating loss in the quarter contributing to an overall year-over-year reduction in operating income. "We have taken steps to address the operational issues and expect improved performance in fiscal 2019," Chopra further commented.
Fourth quarter sales in the Healthcare division decreased by 11% as compared to the prior fiscal year, according to Chopra. "Although we are disappointed with the second half results of our Healthcare division, we are encouraged by the direction under new leadership. We are increasing focus on patient monitoring, diagnostic cardiology, and supplies and accessories and leveraging our market positions in the U.S. and Europe, while de-emphasizing our anesthesia products that lack scale. We anticipate these actions should lead to increased margins in this division,” Chopra said. "During fiscal 2018, we repurchased $63 million of common stock as part of our share repurchase program, returning value to our shareholders, and now have approximately 851,000 shares available for future repurchases. Going forward, we will continue to focus on creating long-term shareholder value by pursuing various growth initiatives, targeting strategic acquisitions, and exiting non-core lines of business."
As a result of the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017, the Company recognized a charge of $55 million during the fiscal year ended June 30, 2018. The charge includes management’s estimate of the tax on accumulated overseas profits and the revaluation of deferred tax assets and liabilities. The changes included in the Tax Act are broad and complex. The final impacts of the Tax Act may differ materially from the amounts estimated due to, among other things, changes in interpretation of the Tax Act, any legislative action that may be taken to address questions arising due to the Tax Act and any changes in accounting standards for income taxes or related interpretations in response to the Tax Act. The Company currently anticipates finalizing and recording any resulting adjustments by the end of the 2018 calendar year.
The effective tax rate for fiscal 2018 was 179.0% primarily as a result of the Tax Act. Excluding discrete items and the impact of the Tax Act, the effective tax rate would have been approximately 27% for fiscal 2018. For the fourth quarter of fiscal 2018, the effective tax rate was 10.7%. Excluding discrete items and the impact of the Tax Act, the fourth quarter effective tax rate would have been approximately 19.7%.
About OSI Systems
OSI Systems is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications in the homeland security, healthcare, defense and aerospace industries. The Company combines more than 40 years of electronics engineering and manufacturing experience with offices and production facilities in more than a dozen countries to implement a strategy of expansion into selective end-product markets. For more information on OSI Systems or its subsidiary companies, click here.