Q1 2025 OSI Systems Inc Earnings Call Transcript
Key Points
- OSI Systems Inc (OSIS) reported a 23% year-over-year increase in revenues for Q1 fiscal 2025, reaching a record $344 million, driven by strong performance in the security division.
- The company achieved a record Q1 non-GAAP adjusted earnings per share of $1.25, reflecting significant revenue growth.
- OSI Systems Inc (OSIS) ended the quarter with a robust backlog of approximately $1.8 billion, providing good visibility for future operations.
- The company completed a convertible debt financing in July, raising $350 million, which reduced borrowing costs and was immediately accretive.
- A strategic bolt-on acquisition in the security division is expected to be accretive to fiscal 2025 non-GAAP earnings per share, enhancing the company's technology portfolio.
- The healthcare division experienced a slight year-over-year decline in sales due to challenging market conditions, although profitability improved.
- Cash used in operations was $37 million in Q1, primarily due to higher inventories and receivables in support of the security division's revenue growth.
- The company's gross margin of 35.3% was slightly down from the previous year's 35.4%, with fluctuations expected due to revenue mix and supply chain costs.
- Net interest and other expenses increased to $7.4 million in fiscal '25 from $5.7 million in fiscal '24, primarily due to higher borrowings.
- The company faces potential risks from global economic conditions and geopolitical unrest, which could impact the timing of contract opportunities.
Thank you for standing by and welcome to the OSI Systems first quarter 2025 conference call. (Operator Instructions) Again as a reminder, today's program is being recorded.
Now I'd like to introduce your host for today's program. Alan Edrick, Executive Vice President and Chief Financial Officer of OSI. Please go ahead, sir.
Well, thank you. Good morning and thank you for joining us. As said, I'm Alan Edrick, Executive Vice President and CFO of OSI Systems. And I'm here today with Deepak Chopra, OSI's President and CEO. Welcome to the OSI Systems fiscal '25 first quarter conference call. We are pleased that you can join us as we review our financial and operational results. Earlier
today, we issued a press release announcing our fiscal '25 first quarter financial results before we discuss these results. However, I would like to remind everyone that today's discussion will include forward-looking statements and the company wishes to take advantage of the safe
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