HAWTHORNE, CA – OSI Systems reported fiscal third quarter revenues of $290.5 million, an increase of 2.4% year-over-year.

Net income for the period ended Mar. 31 was $42.7 million, up 127.1% compared to the same period last year.

“We are pleased with our overall performance in the third quarter, during which we continued to profitably grow our business in a difficult general economic environment that included heightened supply chain and logistics challenges,” said Deepak Chopra, OSI Systems’ chairman and CEO. “We believe that with the strength of our backlog and near-term pipeline of opportunities we are well positioned to finish the fiscal year with a strong fourth quarter.”

For the nine months ended Mar. 31, revenues were $846.4 million, growth of 3.9%. Net income was $81.6 million, up 69.3%.

For the three and nine months ended Mar. 31, the company's book-to-bill ratio was 1.1 and 1.2, respectively. As of Mar. 31, OSI’s backlog was over $1.2 billion, representing an increase of 14% from the end of the last fiscal year. Cash generated from operations was $38.4 million, and capital expenditures were $2.9 million during the fiscal third quarter.

“The Security division revenues increased in the third quarter compared to the prior year, while operating income was impacted by higher supply chain and logistics costs, the mix of revenue, and the cost of certain promotional activities, which were not incurred in the prior year due to the pandemic. With our significant Security backlog, we are expecting solid growth in the fourth quarter.

“Our Optoelectronics and Manufacturing division again delivered solid financial results, along with record bookings leading to a record backlog for the division. The division has benefitted from our vertically integrated manufacturing global footprint and is consistently viewed as a trusted partner by leading OEMs.

“Our Healthcare division continued to perform well and delivered a strong operating margin. As anticipated, we reported a small reduction in revenues for the third quarter of fiscal 2022 in comparison to the same prior-year period, which had been bolstered during the Covid pandemic. During the quarter, we continued to focus on new product development principally in our patient monitoring portfolio to enhance our core offerings.”

During the quarter, the firm executed a sale-leaseback transaction for its facilities in Hawthorne, CA. The company sold the property for $32 million and recognized a gain on sale of $27.4 million.

“In addition to the solid operating results, we were pleased with the continued improvements to our capital structure, as we generated significant proceeds from the sale of our Hawthorne facility and continued to repurchase shares,” said Alan Edrick, executive VP and CFO. “The sale-leaseback of our Hawthorne facility was completed at a very attractive sale price with favorable leaseback terms unlocking the value in this asset. Further, we were active in our stock repurchase program, acquiring 635,962 shares. We have retired approximately 6% of our outstanding shares during the first nine months of fiscal 2022 as part of our capital allocation strategy, leaving us with the ability to repurchase approximately 1.4 million additional shares under our current buyback program. We also completed two small strategic acquisitions in our Security division, which are expected to strengthen our direct presence in certain regions and broaden our technology portfolio.”

For fiscal 2022, OSI expects revenues between $1.16 billion and $1.195 billion.

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