OSI Systems, Inc. reported significant financial growth for the three months ended September 30, 2024, with net revenues increasing to $344.0 million, a 23.2% rise from $279.2 million in the same period of the previous year. This growth was primarily driven by the Security division, which saw revenues jump from $164.6 million to $224.3 million, accounting for 65.2% of total revenues. The increase in the Security division was attributed to higher sales in cargo and vehicle inspection systems, trace detection systems, and checkpoint screening.

Gross profit for the quarter also rose, reaching $121.5 million compared to $98.7 million in the prior year, maintaining a gross margin of approximately 35.3%. Operating income improved from $22.6 million to $30.3 million, while net income increased from $12.9 million to $17.9 million, resulting in basic earnings per share rising from $0.77 to $1.07.

The company’s total assets grew from $1.94 billion as of June 30, 2024, to $2.11 billion by September 30, 2024. This increase was accompanied by a rise in total current assets from $1.22 billion to $1.31 billion. However, total stockholders' equity decreased from $863.5 million to $786.5 million, largely due to increased long-term debt, which surged from $129.4 million to $468.1 million, reflecting financing for acquisitions.

In July 2024, OSI Systems issued $350.0 million in convertible senior notes, which contributed to a net cash inflow of $340.4 million. The company also made a strategic acquisition of a provider of military, space, and surveillance solutions for approximately $76.0 million, financed through borrowings. This acquisition is expected to enhance OSI's capabilities in the defense sector.

Operating expenses increased, with selling, general, and administrative expenses rising by $12.4 million, primarily due to unfavorable foreign currency exchange rates and higher employee compensation. Research and development expenses also grew by $1.9 million, reflecting ongoing investment in new product development.

Cash and cash equivalents at the end of the reporting period totaled $85.1 million, a decrease from $95.4 million at the end of the previous quarter. The company reported net cash used in operating activities of $37.2 million, contrasting with cash provided of $17.1 million in the same quarter last year. The increase in cash used was largely due to the acquisition and higher operational costs.

Overall, OSI Systems demonstrated robust revenue growth and strategic expansion through acquisitions, despite facing challenges related to increased debt and operational expenses.

About OSI SYSTEMS INC

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