OSI Systems and Its Commitment to Safer Air Travel

Josef Ray is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

It has been another good fiscal year for specialized-electronics provider OSI Systems (NASDAQ: OSIS), as it reported another stunning 21% boost for its fiscal 2012’s revenue. This is OSI Systems’ third annual increase, with sales amounting to approximately $793 million at the close of fiscal 2012. With the company’s first quarter of fiscal 2013 boasting revenue growth to $182 million, OSI Systems is confident that it will announce a fourth year increase in its sales to between $870 million and $890 million.

OSI Systems' forward-looking statements for financial 2013 are very much real, with the amount of hard work and growth it exhibits through the years.  Dedicated to manufacturing and distribution of different electronic systems and components, OSI Systems is able to reach a diversity of markets in different parts of United States, Europe, and Asia. With three specialized operating divisions, the company is able to compartmentalize tasks for each division to focus on specific target markets.

Rapiscan Systems, the security and inspection department of the company includes inspection systems for baggage, cargoes, vehicles, and people. It is also one of the lead developers of dual or multi-energy X-ray technology with computer software enhanced imaging innovation that brings security to a higher and more efficient level. One of the biggest contracts by the security division this year is a $15 million purchase by the U.S. Federal Agency of multiple units of the Rapiscan 600 series X-ray baggage inspection systems. Outside the Unites States, Rapiscan has also established a solid market with Rapiscan's 620DV advanced baggage scanner’s recent approval from the European Civil Aviation Conference's (ECAC) and UK's Department for Transport. This technology is exactly what airports all over the globe need for complete and cost-effective screening that is able to meet the demands of liquid explosive threats.

With OSI Systems’ eighth consecutive quarter of double-digit growth, its Optoelectronics and Manufacturing division keeps up to par with 12% boost from various local and international agreements and distributions. Trading under the name OSI Electronics, it is able to produce both standard and specialized products for specific applications such as aerospace and defense, industrial mechanization, automotive diagnostics and even renewable energy. The division manufactures optoelectronic devices and services to third party original equipment manufacturers and to its own Security and Healthcare divisions. This year, OSI Electronics announced more third party multi-year agreements which would continue to stabilize the company’s global footprint and influence. One of the said agreements with a leading automotive electronics provider is expected to generate sales of approximately $10 million.

The company has also established a stable base on the health sector with its Healthcare division under Spacelabs. One of the feature products by Spacelabs Healthcare that consistently gains numerous contracts is its Patient Monitoring Solution, which gives the company $2 million bonds for each agreement. Recently, the division has received Section 510(k) clearance from the US Food and Drug Administration (FDA) to distribute AriaTele telemetry transmitter, a state-of-the-art transmitter that utilizes the latest technology to provide maximum performance, product life and comfort for patients undergoing Patient Monitoring. As the lead developer of medical telemetry, this innovation provides continuous multi-parameter monitoring of ambulatory patients sought by different medical centers in many U.S. and European countries. Aside from Patient monitoring and anesthesia delivery systems, another trademark of Spacelabs Healthcare is its Sentinel Cardiology Information Management System, which is able to collate and integrate all data from different Spacelabs products into a central database that could be accessed by certain medical care providers and administrators.

Compared with rival companies, OSI Systems continues with excellent revenue growth annually because of the diversity of fields and sectors it is able to tap. With a quarterly revenue growth of 13%, the company proves to be a promising investment with the amount of business expansion it is able to exhibit in comparison to Entegris (NASDAQ: ENTG) at only 7% and RF Micro Devices (NASDAQ: RFMD) at -14.0%. Another interesting statistic to look at is the company’s measure of Return on Investment (ROI). Compared to RF Micro Devices and CSR PLC, both at negative percentages, OSI Systems verifies its efficiency in managing assets and generating earnings with an ROI of 6.30%.

From OSI Systems’ outstanding accomplishments and solid global manufacturing and sales presence, the company’s stock continues to gain analysts’ favors and reaffirmation of ‘Buy’ and ‘Outperform’ ratings. With the company continuously exhibiting excellent figures and top-quality products and services worldwide, investors should grab this opportunity before OSI Systems hits their target price of $93.00 on the stock market.

JosefRayDagatan has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus