OSI Systems, Inc. (NASDAQ:OSIS) Q4 2020 Earnings Conference Call - Final Transcript

Aug 20, 2020 • 04:30 pm ET


OSI Systems, Inc. (NASDAQ:OSIS) Q4 2020 Earnings Conference Call - Final Transcript


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Alan Edrick

we saw an increase in our days sales outstanding to 89 days in Q4 fiscal' 20 as compared to 70 days in the prior period. As a higher proportion of our sales occurred in the second half of the quarter, given more pandemic operational challenges in the first half of the quarter, thus leading to payments occurring subsequent to our fiscal year-end.

Capex in the fourth fiscal quarter was $4.3 million, while depreciation and amortization expense in the quarter was $12 million. Our cash flow conversion was strong. The fiscal '20 conversion of operating cash flow less capex to net income was 145%. As mentioned earlier, in April, our Board authorized a new 1 million share buyback program, which was increased to 3 million shares this month in total. We did not make any stock repurchases during the last quarter, so the full share figure is available under the program. Also, as mentioned earlier, our balance sheet is strong with modest net leverage and no debt maturities until fiscal '23.

And finally, turning to guidance. For fiscal '21, the company anticipates revenue in the range of $1.09 billion to $1.14 billion and non-GAAP earnings per diluted share in the range of $4.50 to $5.05. We expect to see revenue headwinds in the first half of fiscal '21 stemming from the pandemic and build positive momentum as the year proceeds. The non-GAAP diluted EPS range excludes potential impairment, restructuring and other charges, amortization of acquired intangible assets and non-cash interest expense and their associated tax effects as well as discrete tax items.

We currently believe this revenue and non-GAAP earnings guidance reflect reasonable estimates and we have reflected the anticipated impact of the COVID-19 pandemic in our guidance. However, given uncertainties as to the duration and scope of the COVID-19 pandemic, as well as other variables, the extent to which COVID-19 may impact the company's financial results is difficult to predict and could vary materially from the anticipated impact reflected in our estimates and guidance. Actual revenues and non-GAAP earnings could vary from the anticipated ranges due to other risks and uncertainties discussed in our SEC filings as well. In the face of these unusual times, we continue to remain focused on the growth of our business through investment in product development and strategic acquisitions, while also managing our cost structure. We believe these efforts will enable OSI to continue our leadership in providing innovative products and solutions.

Finally, and importantly, we would like to take this opportunity to recognize and to thank the entire OSI Systems team around the world for its commitment to safety, dedication and supporting our customers and agility in the face of uncertainty, all of which helps to create value for our stakeholders.

And at this time, we would be happy to open the call to questions.