OSI Systems, Inc. (NASDAQ: OSIS) stock fell over 0.8% on 21st August, 2020 (as of 9:53 am GMT-4; Source: Google finance) after the company issued disappointing revenue guidance for fiscal 2021 & mixed results for the fourth quarter of FY 20. OSIS in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.22, while reported 10.19 percent fall in the adjusted revenue to $276,967,000 in the fourth quarter of FY 20, missing the analysts’ estimates for revenue of $285,130,000. Moreover, in the fourth quarter, Optoelectronics and Manufacturing division’s total revenues were down 10% to $67 million, which was expected, mainly due to this pandemic. The sensor product acquisition primarily serves the defense and space satellite markets that the company had completed earlier in the year performed well during the quarter.
The company has reported Non-GAAP net income for the fourth quarter of fiscal 2020 of $22.5 million, compared to non-GAAP net income for the fourth quarter of fiscal 2019 of $21.6 million.
Meanwhile, after the quarter end, the company acquired SafeNSound, which is an innovative cloud platform solution, which assists healthcare providers in achieving their aim of better outcomes, improve patient experience, higher staff satisfaction and lower costs. This was a technology acquisition and now the SafeNSound team is expected to continue to develop innovative solutions that further enhance the value of the patient monitoring systems and enable the company to enter into new markets such as remote patient monitoring.
The company continues to drive operating margin expansion as the Q4 year-over-year adjusted operating margin rose from 11.1% to 12.3% driven by both the Security and the Healthcare divisions. The adjusted operating margin in the Security division expanded to 15.5% compared to 13.5% in the prior year fourth quarter, due to sound operational execution and cost controls. Due to increased revenues, the Healthcare division posted significant operating margin expansion from 13.1% in Q4 last year to 17.4% in Q4 of fiscal ’20.
Healthcare division revenues grew 15% year-over-year due to increased demand in patient monitoring products, as the company saw reductions in revenues in each of the Security and Opto divisions. Security sales were down 16% year-over-year, mainly due to the impact of the pandemic on the fulfillment of orders in the backlog as well as the timing of new orders. OSI Systems expects 2021 revenue to be in the range of $1.09 billion and $1.14 billion, which is below a FactSet median estimate of $1.19 billion.