OSI Systems Inc. (OSIS, Financial) filed Annual Report for the period ended 2012-06-30.
Osi Systems, Inc. has a market cap of $1.42 billion; its shares were traded at around $72.9 with a P/E ratio of 29.2 and P/S ratio of 1.8. Osi Systems, Inc. had an annual average earning growth of 19.6% over the past 10 years.
Fiscal 2012 Compared with Fiscal 2011. For fiscal 2012, SG&A expenses increased by $9.1 million, or 6%, to $151.7 million, from $142.6 million for fiscal 2011. This $9.1 million increase was primarily attributable to $4.3 million of start-up costs related to a large turnkey screening solutions agreement, which is expected to generate revenues in fiscal 2013 and an increase in SG&A costs to support our 21% revenue growth. As a percentage of revenue, SG&A expenses were 19.1% for fiscal 2012, compared to 21.7% for the comparable prior year period as we further leveraged our infrastructure.
Fiscal 2011 Compared with Fiscal 2010. Cash generated by operating activities in fiscal 2011 was $40.1 million, a decrease of $12.0 million, or 23%, from fiscal 2010. This reduction was primarily due to changes in working capital in the current-year period when compared to the prior-year period, including: (i) a $59.6 million increase in inventory, reflecting both a build-up of inventory, mainly in our Security and Optoelectronics and Manufacturing divisions to support growth as well as improvements realized in the prior fiscal year from inventory reduction initiatives; (ii) a $15.6 million decrease in advances received from customers; and (iii) a $5.1 million decrease in accrued payroll and related expenses. These unfavorable changes in cash flow were partially offset by the following favorable changes in working capital: (i) a $20.3 million improvement in the change from accounts receivable reflecting our ongoing focus on collection activity; (ii) a $19.8 million increase in cash from accounts payable, which largely corresponds to the aforementioned inventory buildup; (iii) a $9.2 million increase in cash from deferred revenues and (iv) an $18.1 million increase in net income for fiscal 2011, after giving consideration to non-cash operating items including depreciation and amortization, stock-based compensation, deferred taxes, provision for losses on accounts receivable and tax effect on the exercise of stock options among others for both periods.
In 1994, we, together with an unrelated company, formed ECIL-Rapiscan Security Products Limited, a joint venture organized under the laws of India. We own a 36% interest in the joint venture, our Chairman and Chief Executive Officer owns a 10.5% interest, and our Executive Vice President and the President of our Security division owns a 4.5% ownership interest. Our initial investment was $0.1 million. For the years ended June 30, 2010, 2011 and 2012, our equity earnings in the joint venture amounted to $0.4 million, $0.6 million and $0.4 million, respectively. We, our Chairman and Chief Executive Officer and our Executive Vice President and the President of our Security division collectively control less than 50% of the board of directors voting power in the joint venture. As a result, we account for the investment under the equity method of accounting. The joint venture was formed for the purpose of the manufacture, assembly, service and testing of security and inspection systems and other products. Some of our subsidiaries are suppliers to the joint venture, which in turn manufactures and sells the resulting products. Sales to the joint venture for fiscal 2010, 2011 and 2012 were approximately $4.4 million, $7.1 million and $5.8 million, respectively. Receivables from the joint venture were $2.2 million and $1.5 million as of June 30, 2011 and 2012, respectively.
We have contracted with entities owned by our Chief Executive Officer and/or his family members to provide messenger services, auto rental and printing services. Included in cost of sales and selling, general and administrative expenses for fiscal 2010, 2011 and 2012, are approximately $64,000, $60,000 and $65,000, respectively, for messenger service and auto rental; and $60,000, $31,000 and $14,000, respectively, for printing services. Further, a subsidiary of the Company is leasing warehouse space on a month-to-month basis for approximately $3,000 per month from an entity controlled by our Chief Executive Officer.
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Osi Systems, Inc. has a market cap of $1.42 billion; its shares were traded at around $72.9 with a P/E ratio of 29.2 and P/S ratio of 1.8. Osi Systems, Inc. had an annual average earning growth of 19.6% over the past 10 years.
Highlight of Business Operations:
Revenues for the Optoelectronics and Manufacturing division for fiscal 2012 increased $17.9 million, or 9%, to $210.8 million from $192.9 million for fiscal 2011. This increase was driven both by an increase in commercial optoelectronics sales, which increased by $9.8 million, or 11%, both to external customers and through intersegment sales, primarily to our Security division and due to an increase in contract manufacturing sales of $7.7 million, or 8%. The Optoelectronics and Manufacturing division recorded intersegment sales of $45.2 million, compared to $46.5 million in the comparable prior-year period. Such intersegment sales are eliminated in consolidation.Fiscal 2012 Compared with Fiscal 2011. For fiscal 2012, SG&A expenses increased by $9.1 million, or 6%, to $151.7 million, from $142.6 million for fiscal 2011. This $9.1 million increase was primarily attributable to $4.3 million of start-up costs related to a large turnkey screening solutions agreement, which is expected to generate revenues in fiscal 2013 and an increase in SG&A costs to support our 21% revenue growth. As a percentage of revenue, SG&A expenses were 19.1% for fiscal 2012, compared to 21.7% for the comparable prior year period as we further leveraged our infrastructure.
Fiscal 2011 Compared with Fiscal 2010. Cash generated by operating activities in fiscal 2011 was $40.1 million, a decrease of $12.0 million, or 23%, from fiscal 2010. This reduction was primarily due to changes in working capital in the current-year period when compared to the prior-year period, including: (i) a $59.6 million increase in inventory, reflecting both a build-up of inventory, mainly in our Security and Optoelectronics and Manufacturing divisions to support growth as well as improvements realized in the prior fiscal year from inventory reduction initiatives; (ii) a $15.6 million decrease in advances received from customers; and (iii) a $5.1 million decrease in accrued payroll and related expenses. These unfavorable changes in cash flow were partially offset by the following favorable changes in working capital: (i) a $20.3 million improvement in the change from accounts receivable reflecting our ongoing focus on collection activity; (ii) a $19.8 million increase in cash from accounts payable, which largely corresponds to the aforementioned inventory buildup; (iii) a $9.2 million increase in cash from deferred revenues and (iv) an $18.1 million increase in net income for fiscal 2011, after giving consideration to non-cash operating items including depreciation and amortization, stock-based compensation, deferred taxes, provision for losses on accounts receivable and tax effect on the exercise of stock options among others for both periods.
In 1994, we, together with an unrelated company, formed ECIL-Rapiscan Security Products Limited, a joint venture organized under the laws of India. We own a 36% interest in the joint venture, our Chairman and Chief Executive Officer owns a 10.5% interest, and our Executive Vice President and the President of our Security division owns a 4.5% ownership interest. Our initial investment was $0.1 million. For the years ended June 30, 2010, 2011 and 2012, our equity earnings in the joint venture amounted to $0.4 million, $0.6 million and $0.4 million, respectively. We, our Chairman and Chief Executive Officer and our Executive Vice President and the President of our Security division collectively control less than 50% of the board of directors voting power in the joint venture. As a result, we account for the investment under the equity method of accounting. The joint venture was formed for the purpose of the manufacture, assembly, service and testing of security and inspection systems and other products. Some of our subsidiaries are suppliers to the joint venture, which in turn manufactures and sells the resulting products. Sales to the joint venture for fiscal 2010, 2011 and 2012 were approximately $4.4 million, $7.1 million and $5.8 million, respectively. Receivables from the joint venture were $2.2 million and $1.5 million as of June 30, 2011 and 2012, respectively.
We have contracted with entities owned by our Chief Executive Officer and/or his family members to provide messenger services, auto rental and printing services. Included in cost of sales and selling, general and administrative expenses for fiscal 2010, 2011 and 2012, are approximately $64,000, $60,000 and $65,000, respectively, for messenger service and auto rental; and $60,000, $31,000 and $14,000, respectively, for printing services. Further, a subsidiary of the Company is leasing warehouse space on a month-to-month basis for approximately $3,000 per month from an entity controlled by our Chief Executive Officer.
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