OSI Systems Inc. Reports Revenues of $24.8 Million, Net Income from Operations of $0.20 Per Share Before Acquisition-Related Charges

Business Wire, Feb 3, 1999

LOS ANGELES--(BUSINESS WIRE)--Feb. 3, 1999--OSI Systems Inc. (NASDAQ: OSIS) Wednesday announced revenues and earnings for the second quarter of its fiscal year 1999, which ended Dec. 31, 1998.

Revenues for the second quarter of fiscal 1999 were $24.8 million, compared to $24.3 million for the second quarter of last year. Pro forma net income for the current quarter, which excludes the acquisition-related charges discussed below, was $2.0 million, or diluted earnings per share of $0.20, compared with net income of $2.4 million, or diluted earnings per share of $0.24, for the second quarter of last year.

During the first and second quarters of fiscal 1999, OSI Systems completed its acquisitions of Osteometer MediTech/AS, Metorex Security Products Oy and Silicon Microstructures Inc. In connection with these acquisitions, OSI is taking a one-time estimated in-process research and development charge of approximately $2.6 million or $0.26 per share. OSI is currently finalizing the amount of its in-process R&D charge, which may change depending on final valuation reports.

The Company expects these valuations to be completed shortly.

Taking into account the charge related to all three above-mentioned acquisitions, the Company reported a net loss of $603,000 or diluted earnings per share of ($0.06) for the current second quarter as compared to net income of $2.4 million, or $0.24 per share for the second quarter of last year.

Revenues for the six months ending Dec. 31, 1998 were $46.3 million, resulting in net income, before in-process R&D charge, of $3.6 million or diluted earnings per share of $0.37. Factoring in the one-time charge, the Company reported net income of $1.1 million and diluted earnings per share of $0.11. This compares with fiscal 1998 six-month revenues of $47.2 million, net income of $3.8 million and diluted earnings per share of $0.46.

"The last three months of calendar 1998, our fiscal second quarter, were spent completing the successive acquisitions of Metorex Security Products and Silicon Microstructures. This was in addition to beginning the integration of our Osteometer acquisition completed only months before in September 1998," said Deepak Chopra, OSI's Chairman and Chief Executive Officer. "Our near-term focus is on integrating these acquisitions and instilling in those companies a sense of OSI Systems' corporate culture.

"Metorex Security Products provides us with a world-class metal detection system to complement the existing channels of distribution in our security business, while the Silicon Microstructures acquisition adds silicon pressure-sensor capabilities to our technology platform and entrance into the automotive market. Osteometer gives us an entry into the life science applications and medical systems arena," continued Chopra. "Through these acquisitions we have strengthened our company and created the opportunity to further leverage our excellent manufacturing capabilities and tremendous geographic reach."

Regarding OSI's successes during the quarter, Chopra said, "Of significance was our ability to complete the approximately $3 million shipment of a previously delayed order for cargo scanning machines for an overseas customer. We also received a milestone technical support contract from the People's Republic of China for a large truck-scanning installation, putting us in a position to bid on large, multi-million dollar X-ray systems projects. Having this world-class reference site will enable us to demonstrate our capabilities at the high-end of the security products arena."

Addressing the recent appointment of a Vice President of Communications to manage the complexities associated with building a corporate identity for a company of OSI Systems' diverse operating units, Chopra said, "We are pleased that Dereck Andrade has joined the OSI Systems team. We are looking forward to utilizing his communications expertise to increase the visibility of our products and services, as well as increasing investor awareness for OSI Systems' unique business model."

OSI Systems, with headquarters in Hawthorne, Calif., manufactures and sells optical and pressure-sensitive electronics subsystems worldwide through its global network of sales and manufacturing facilities in Singapore, Malaysia, Denmark, Norway, Finland, the United Kingdom and the United States. OSI customers include many of the leading Fortune 1000 companies. Its products are used in a wide range of applications including security, medical, aerospace, oil exploration and automotive. For security and inspection customers worldwide, OSI manufactures and sells X-ray inspection and metal detection systems under the trade names Rapiscan(tm) and Metor(tm). OSI manufactures and sells electromechanical pressure-sensing subsystems under the Silicon Microstructures trade name. OSI also sells complete systems for life science applications, including X-ray and ultrasound systems for detecting osteoporosis under the trade names UltraSure(tm) and DexaCare(tm) through its wholly owned subsidiary, Osteometer MediTech. The Company, which employs approximately 800 people worldwide, had revenues of $94 million in its 1998 fiscal year, which ended June 30, 1998.