Osi Systems, Inc. · NASDAQ:OSIS
Osi Systems — Spacelabs Healthcare — H1 2006 Earnings Presentation
28 slides from Osi Systems's earnings presentation, March 2006
Slide 1: Interim Results First Six Months Fiscal 2006
Interim Results First Six Months Fiscal 2006 1
Slide 2: Safe Harbour Statement
Safe Harbour Statement This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding the company’s expectations, goa
Slide 3: Agenda
Spacelabs Healthcare, Inc. Agenda Company overview Operational highlights Financial highlights Group strategy and outlook Conclusion Appendices 3
Slide 4: Company Overview
Spacelabs Healthcare, Inc. Company Overview Profitable international medical technology business Worldwide business strategy – multinational distribution, manufacturing and R&D Business model – Target markets w/w > US$4billion annually – High visibility, 23% recurring revenues in service and S&A Rec
Slide 5: Organisational Structure
Spacelabs Healthcare, Inc. Organisational Structure Patient Anaesthesia / Medical Solutions Monitoring Ventilation Bone Ambulatory Blood Pressure Densitometry Pulse Oximetry Medical Data 5
Slide 6: Operational Highlights
Spacelabs Healthcare, Inc. Operational Highlights Awarded three year multi-source supplier contract with Premier, Inc., one of the U.S’s leading hospital and healthcare systems alliances; Launched a wireless network option for a range of UltraviewSL 2400 compact monitors in North America; Received 5
Slide 7: Patient Monitoring
Patient Monitoring Strong sales order intake – up 15% globally. Manufacturing gross margin improvement of 5% Launch of new wireless patient monitors into North American market – Launch worldwide by Spring 2006 Ongoing commitment to R&D Low acuity monitor target launch 2006 Accredited by the top 3 U.
Slide 8: Anaesthesia
Anaesthesia Integration into Spacelabs Healthcare ongoing; Received 510(k) approval from the FDA for distribution of the Blease Sirius anaesthesia system into the U.S. market – target launch 2007 Approximately 40 new distributors added internationally Production capacity improved through product re-
Slide 9: Other Highlights
Other Highlights Medical Data – New contract to monitor three large multinational trials for major pharma company – Backlog increased from $2.3 million (June) to $5.2 million (Dec) Partnerships & Collaborations – Released new real-time charting module for NICU in conjunction with Clinical Computer S
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS Ralph Hunter, CFO 10
Slide 11: Financial Highlights
Financial Highlights Revenue for 1H FY 2006 $112.4m, up 16% (1H FY 2005: $96.8m); Gross profit improvement of 3%, to 47% due to new product launches; SG&A at $36.8m, up 21% - due mainly to Blease & sales volume; R&D at $9.4m, up 25% - due to Blease & ongoing R&D spend; Operating income up 57% to $6.
Slide 12: Profit & Loss Statement
Profit & Loss Statement 1H Fiscal 2006 First Half ended First Half % Difference Prior year H1 Rev Dec 31 2005 Dec 31 2004** benefited c.$8.5m US$m US$m deferred revenue Turnover 112.4 96.8 16% Cost of Sales (59.1) (53.6) Gross Profit 53.3 43.2 23% SG&A (36.3) (30.5) R&D (9.4) (7.5) Strong order inta
Slide 13: Quarterly Revenue Growth - Proforma Basis
Quarterly Revenue Growth - Proforma Basis 70 $61 m $58m 60 $56m $52m $51m $51m $50 m $51m $49 m 50 $47m $44m $40m $41m $40 m 40 2003 millions 2004 2005 30 2006 20 10 0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 *Proforma financial results, includes Spacelabs Medical and Blease Medical 13
Slide 14: Balance Sheet
Balance Sheet 1H Fiscal 2006 As at 31 As at 30 June December 2005 2005 US$m US$m Cash & Cash Equivalents 11.7 7.9 Debtors 58.4 44.1 Inventory 32.8 38.2 Other Current Assets 7.2 8.1 Fixed Assets 7.6 7.1 Goodwill & other intangible assets 23.7 24.9 Other 1.2 1.0 TOTAL ASSETS 142.6 131.3 Creditors 17.6
Slide 15: Cashflow Statement
Cashflow Statement 1H Fiscal 2006 6 months 6 months ended ended 31 31 December December 2005 2004 US$ m US$ m Net Income 4.1 2.7 Depreciation and Amortisation 2.0 1.3 Net working capital movements (5.5) (0.7) Net cash provided by operating activities 0.6 3.3 Net cash used in investing activities (1.
Slide 16: Group Strategy
Group Strategy Achievements in H1 FY 2006 Retain historic customer base Leverage brand and sales channels Gross margin: improvements already impacting P&L Product line expansion through R&D Product line expansion through strategic acquisitions Expand presence in developing markets 16
Slide 17: Outlook
Spacelabs Healthcare, Inc. Outlook Expected performance in 2H FY 2006 in line with published market estimates Continued investment in R&D Focus on manufacturing and selling synergies within product lines M&A opportunities – complementary technologies and products 17
Slide 18: Appendices
Spacelabs Healthcare APPENDICES
Slide 19: Board and Management Structure
Spacelabs Healthcare Board and Management Structure Sir John Banham, Chairman George Kennedy CBE, Vice Chairman Non-Executive Board Steve Good, NED Meyer Luskin, NED Deepak Chopra, CEO Executive Board Ralph Hunter, CFO Nikhil Mehta, BD Victor Sze Joe Davin Dave Tilley Nicholas Ong Jim Roop Roy Hays
Slide 20: Global Presence
Spacelabs Healthcare Global Presence Distributors: Direct Sales: Approx 110 countries Distribution USA, CAN, UK, FRA, GER Distribution Offices: Europe, USA, Latin / South America, Singapore, Asia Manufacturing USA, UK and India R&D Centres USA, UK and India 20 Approximately 1,050 employees and offic
Slide 21: Patient Monitoring: Market position and strategy
Patient Monitoring Market position and strategy Global player – Strong international brand recognition • Spacelabs Medical • USA, Asia& Europe – Leading independent supplier in the US – International sales and service coverage Unique selling points – Long-term customers and strategic partnerships –
Slide 22: Patient Monitoring: Market Overview
Patient Monitoring Market Overview Market size – Est. US$2.3bn • Growing 3-5% in USA & Europe; 10-15% Asia (Frost & Sullivan) • Telemetry (wireless) monitoring – Growing at 15% in the US • Two market segment Market segment Acute Care Non-Acute Care OR, ICU, CCU GP’s and homecare Environment surgery
Slide 23: Patient Monitoring: Market position and strategy
Patient Monitoring Market position and strategy New product line – Ultraview SL 2600 launched December ‘05 – Wireless capability – (insert) New product line – Ultraview SL launched August ’04 – Improved functionality – Improved average margins by 5% – US sales c.90% converted in June ’05; RoW in 200
Slide 24: Patient Monitoring: Revenue Model
Patient Monitoring Revenue Model Capital Sales – Purchasing decision – Clinicians / Hospital IT procurement – Monitor price range US$6,000 – 30,000 – Installation of fully integrated system has included contracts of approx. US$6m Services Income – Contracts sold on annual basis – Recurring revenue:
Slide 25: Anaesthesia Systems & Accessories
Anaesthesia Systems & Accessories Acquired Blease Medical February 2005 UK based Market size – Est. US$700m pa Customers Competition – Hospitals, surgery centres, clinics – Drägerwerk AG – OEMs – GE Healthcare Leading player Sold 4,500 systems in - OEM products (vaporisers and ventilators) past 10 y
Slide 26: Anaesthesia: Portfolio of products
Anaesthesia Portfolio of products Focus® family Sirius® family OEM Parts & Accessories Focus 6500 Focus 8500 Sirius 2200 Sirius 3000 8500 ventilator w/ 6500 ventilator Focus 2200 Sirius 3000 w/ 8500 ventilator Datum Vaporizers 26
Slide 27: Dolphin Medical
Dolphin Medical Pulse Oximetry Non-invasive measurement of blood oxygen Market size – US market alone est.US$780m – US$ 350m recurring disposable Product business – Pulse oximeters Competition – Compatible disposable and – Nellcor -Tyco (dominate leader), reusable sensors Massimo – OEM sales for sen
Slide 28: Medical Data
Medical Data Digital collection, interpretation Market size and distribution of cardiac safety – Est. US$240m per annum clinical trials data – growing to US$1.4 bn due to FDA regulations Customers Competition – Pharma companies, CROs – eResearch, BMS, Covance Positioning - Established brand name in