Osi Systems, Inc. · NASDAQ:OSIS
Osi Systems — Investor Presentation (February 2005)
70 slides from Osi Systems's investor presentation, February 2005
Slide 1: Corporate Presentation: OSI Healthcare Group
CORPORATE PRESENTATION: OSI Healthcare Group
Slide 2: Safe Harbor Statement
“Safe Harbor” Statement This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because such statements are subject to risks and uncertainties actual results may differ materially
Slide 3: Presentation Overview
Presentation Overview • OSI Overview • OSI Security Group Summary • Optoelectronics and Manufacturing Summary • OSI Healthcare Group
Slide 4: Company Background
Company Background Nasdaq: OSIS Share Price as of 02/18/05: $16.72 Market Cap: $272m Forecast 2005 Revenue: $382m Diversified global developer, manufacturer and seller of: ! Security and Inspection Systems ! Medical Monitoring Systems ! Optoelectronics-based Components, Sub-assemblies & OEM Manufact
Slide 5: Moving up the Value Stream
"+ Corporate Overview [eL5]/SYSTEMS, INC. Ali materials are proprietary and confidential
Slide 6: Revenue Trend
Revenue Trend $500.0 400.0 CAGR 30.5% 300.0 L} Non-Security 2000 2001 2002 2003 2004 2005 *Excluding Discontinued Operations * Corporate Overview
Slide 7: Global Presence
Global Presence * * * Corporate veadquarte® * * Hawthorne, California * Corporate Overview
Slide 8: Experienced Management Team
Experienced Management Team NAME TITLE YEARS AT OSI Deepak Chopra Chairman & CEO 17 Dave Tilley President, Spacelabs 10* President Ajay Mehra 15 Security Group Anuj Wadhawan CFO 13 Andreas F. Kotowski CTO 11 President, Manoocher Mansouri 16 UDT Sensors *Spacelabs acquired by OSI Systems on March 19,
Slide 9: OSI Operating Performance
OSI Operating Performance $M 2Q 05 2Q 04 FY 04 FY 03 Sales 102.5 51.1 247.1 182.6 Profit After Tax 2.5 3.0 10.0 15.8 EPS - diluted 0.15* 0.20 0.65* 1.09 Weighted Avg. Shares 16.7 15.1 15.2 4.5 Assuming dilution Fiscal 2005 Revenue Guidance - $382m 3Q Fiscal 2005 Guidance $92 - $94m Revenue** with br
Slide 10: Balance Sheet (in millions)
Balance Sheet (in millions) $M 12/31/04 6/30/04 6/30/03 Cash/Cash Equivalent $ 29.1 $ 39.9 $ 98.2 Working Capital $ 145.4 $ 143.4 $ 141.9 Total Assets $ 335.5 $ 331.8 $ 229.5 Stockholders’ Equity $ 233.2 $ 227.5 $ 180.4 •1.5 million shares available to purchase under Share Buy Back Program •During Q
Slide 11: Margin Trends
Margin Trends % of Revenue 2005 (1H) 2004 2003 2002 2001 Gross Margin 36.9% 33.8% 32.8% 30.8% 27.2% SG&A 26.1% 21.8% 16.0% 17.4% 19.4% R&D 7.2% 5.9% 4.9% 5.2% 6.0% Operating Income 3.6% 5.6% 12.0% 7.9% 1.4% Retention & Amoritization 1.0% 0.6% Reported Operating Incomee 2.6% 5.0% Retention bonus esta
Slide 12: Segment Performance
Segment Performance: For First Two Quarters Fiscal 2005 OSI Security Group $M Q2 05 Q2 04 1H 05 1H 04 Security & Inspection Systems Sales 32.0 29.0 62.0 52.7 Op. Income (1.3)*** 3.2 1.1 5.5 Rapiscan, Metor, Ancore, ARACOR Profit Margin NA 11% 2% 10% OSI Healthcare Group $M Q2 05 Q2 04 1H 05 1H 04 Me
Slide 13: Operating Segments
Operating Segments •Rapiscan – Parcel, People & Large •Spacelabs – Patient •UDT Sensors •Rapitec Cargo Inspection: X-ray & Gamma Monitoring ICU & •AME •OSI Defense •Metorex – People Inspection Anesthesia. •Ferson •OSI Laserscan •ARACOR – Large Cargo •Blease - Anesthesia and Mobile X-ray ventilation
Slide 14: OSI Security Group - Core Strengths
OSI Security Group - Core Strengths ! Leader in multi-billion dollar worldwide security and inspection market ! Only vertically integrated security solutions provider ! Commitment to R&D – Product innovation ! Broadest product offering in Large Cargo Inspection Market: - X-ray, Gamma & Neutron ! Ins
Slide 15: OSI Opto-electronics & Manufacturing Overview
OSI Opto-electronics & Manufacturing Overview ! 35 years of Opto-electronic manufacturing experience; ! Global manufacturing capabilities; ! Life cycle manufacturing; ! Strong engineering design in USA and Europe; ! Low cost manufacturing facilities globally; ! Ability to capture manufacturing margi
Slide 16: OSI's Healthcare Group of Companies
OSI’s Healthcare Group of Companies
Slide 17: Long Term Commitment & Investment in Healthcare
Long Term Commitment & Investment in Healthcare ! 1988 Established Medical Group to provide turn-key manufacturing of medical devices for: Nellcor, Masimo, Ohmeda, Datascope, Invivo Research, and many others ! 1997 Acquired Aristo Pulse Oximetry business ! 1998 Acquired Osteometer Meditech ! 1999 Ac
Slide 18: Hospital Solution
Hospital Solution Connectivity ! Full line of patient monitoring equipment and patient gathering information Critical care units ! SPO2 sensors for patient monitoring Partnerships equipment HIS Remote telemetry ! Anesthesia and monitoring Ventilation Emergency Perioperative
Slide 19: Perioperative
Perioperative ! OR patient monitoring equipment ! SPO2 sensors for patient monitoring equipment ! Anesthesia and ventilators
Slide 20: Care Units
Care Units ! Full line of patient monitoring equipment ! SPO2 sensors for patient monitoring equipment ICU CCU NICU PICU ! Critical care ventilators
Slide 21: Emergency Room
Emergency Room ! Transport patient monitoring equipment ! SPO2 sensors for patient monitoring equipment ! Portable ventilators
Slide 22: Telemetry
Telemetry ! Wireless Patient Monitoring throughout hospital ! Remote care
Slide 23: Clinical Information Connectivity
Clinical Information Connectivity ! Patient information gathering and networking including select 3rd party devices ! Opening clinical information from other systems to the patient monitoring product line
Slide 24: Acquisition Strategy for OSI Healthcare
Acquisition Strategy for OSI Healthcare Spacelabs ! Established brand name; ! Manufacturing synergies with OSI Optoelectronics & Manufacturing Group; ! Large global installed base of approximately 110,000 monitors; ! Ability to market Dolphin Pulse Oximetry to large installed base. Blease ! Complete
Slide 25: Spacelabs Healthcare
acelabs a2 * Healthcare
Slide 26: Spacelabs Medical – Background
Spacelabs Medical – Background ! Spacelabs acquired in March 2004 through divesture from GE Healthcare for $47 million* ! Headquartered in Issaquah WA ! Employs 800 people globally ! Spacelabs patient monitoring installed base of 110,000 units worldwide ! Global sales and service coverage with direc
Slide 27: Long History of Innovation
Long History of Innovation First Combined Direct First Touchscreen Maternal and recording Interface on monitor Obstetrical Monitor electro cardiograph, First NIBP in a First BISTM First now at monitoring module embedded Smithsonian module Citrix® Client 1958 1985 1988 1996 1998 2003 First Medical Fi
Slide 28: Spacelabs - Blue Chip Customer Base
Spacelabs - Blue Chip Customer Base
Slide 29: Spacelabs Medical - Strategic Partnerships
Spacelabs Medical - Strategic Partnerships • Long-term strategic partnerships • Open architecture product platform • Information connectivity • Easy integration into existing hospital Information systems •Centralized clinical information from 3rd party devices •Compatibility with future technology s
Slide 30: Spacelabs Marketing Approach
Spacelabs Marketing Approach • Align products and services to enhance care efficiencies • Provide products with forward and backward compatibility maximizing capital investments • Provide consolidation of and access to patient information when and where healthcare providers need it. • Product featur
Slide 31: Intesys Clinical Suite
Spacelabs Medical Connectivity Intesys Clinical Suite •A scaleable suite of products that gathers and manages waveforms, and numeric information across a network •Provides connectivity to patient information via the internet or client server •Connects to existing HIS systems •Economically scaleable
Slide 32: WinDNA
Spacelabs Medical Connectivity …WinDNA® •Instantly access labs, radiology and charting at the bedside
Slide 33: Spacelabs Connectivity with 3rd Party Devices
Spacelabs Connectivity with 3rd Party Devices •Capture patient information from a growing number of 3rd party devices such as ventilators, capnography, and infusion pumps
Slide 34: Spacelabs Medical Central Monitoring
Spacelabs Medical Central Monitoring •Combines central monitoring for hardwired and wireless patient monitoring Ultraview SL3800 •Ability to control, review, and record information from any networked patient monitor. •Scaleable central monitoring
Slide 35: Spacelabs Variable Acuity Monitoring
Spacelabs Variable Acuity Monitoring Full product line provides solutions for all low or high acuity monitoring needs •Transport •Care Units •Telemetry Ultraview SL2400 Ultraview SLP 100 •Perioperative •Modular parameter monitoring: ECG, Resp, SpO2, NIBP, Temp, IP, CO, EtCO2, BIS Low Acuity Market O
Slide 36: Ultraview SL: Next Generation in Patient Monitoring
Ultraview® SL: Next Generation in Patient Monitoring Launched in August 2004 Ultraview SL3800 Ultraview SL2400 Ultraview SL 2800
Slide 37: US Critical Care Monitoring Competitive Landscape
US Critical Care Monitoring Competitive Landscape Types Category Predominate Companies Typical ASP’s Medium-High Univ & Regional Spacelabs, Philips, GE $12,000 to $25,000 Acuity Large Hospitals Hospital 500+ Beds Medium-High Major Hospitals Spacelabs, Phillips, GE, $12,000 to $25,000 Acuity Medium 3
Slide 38: European Critical Care Monitoring Competitive Landscape
European Critical Care Monitoring Competitive Landscape Types Category Predominate Companies Typical ASP’s Medium-High Univ & Regional Spacelabs, Philips, GE, $10,000 to $18,000 Acuity Large Hospitals Draeger Hospital 500+ Beds Medium-High Major Hospitals Spacelabs, Phillips, GE, $10,000 to $18,000
Slide 39: APAC Critical Care Monitoring Competitive Landscape
APAC Critical Care Monitoring Competitive Landscape Types Category Predominate Companies Typical ASP’s Medium-High Univ & Regional Spacelabs, Philips, GE, $6,000 to $17,000 Acuity Large Hospitals Nihon Kohden, Mindray Hospital 500+ Beds Fukuda Denshi Medium-High Major Hospitals Spacelabs, Phillips,
Slide 40: Latin American Critical Care Monitoring Competitive Landscape
Latin American Critical Care Monitoring Competitive Landscape Types Category Predominate Companies Typical ASP’s Medium-High Univ & Regional Spacelabs, Philips, GE $6,000 to $17,000 Acuity Large Hospitals Hospital 500+ Beds Medium-High Major Hospitals Spacelabs, Phillips, GE, $4,500 to $14,000 Acuit
Slide 41: Our Distribution Channels
Our Distribution Channels UK, France, Direct sales & service Germany, US and channels Canada Leveraging long term Rest of the world relationships from global distributor network Distributor Europe: Helsinki, Finland Management Asia Pacific: Singapore Offices Latin America: Miami
Slide 42: Spacelabs Opportunity – Market Share
Spacelabs Opportunity – Market Share OPPORTUNITY Current Market Shares •Spacelabs Products and Global Installed Base • 110,000 patient monitors for ICU, ER, OR and step-down units: 66,000 in USA, 11,000 in Europe, 33,000 in Asia of these: - 10,000 Central Nurse Stations - 8,500 Telemetry Products •
Slide 43: Recurring Revenues
Recurring Revenues Recurring Revenues • Service • Supplies & Accessories ! Spacelabs branded pulse oximetry products in near future • Medical Data (Now part of OSI Medical Solutions) ! ECG core lab providing cardiac safety and efficacy testing services ! Customers include pharmaceutical and biotech
Slide 44: Service Commitment
Service Commitment ! Commitment throughout organization ! Spacelabs approved service provider ensures - Training by the manufacturer - Manufacturer approved and traceable spare parts - Up-to-date technical documentation - Exemplary traceability ! Customer feedback - integral part of quality manageme
Slide 45: Spacelabs Today
Spacelabs Today ! Financially solid, three consecutive profitable quarters and growing ! Focused and reenergized business -Culture / commitment to customer -Global experience -Right sized ! Strengthened product portfolio – introduction of Ultraview SL ! Complimentary Blease anesthesia and Dolphin pu
Slide 46: Anesthesia Delivery and Ventilation Market Opportunity
Anesthesia Delivery and Ventilation Market Opportunity Pre 2005 Status: • $700 million worldwide market • 10 year EU supply agreement with GE Healthcare per terms of divestiture • Customers seeking a strong alternate choice
Slide 47: New Acquisition: Blease Medical
New Acquisition February 2005: Completed the acquisition of Blease Medical
Slide 48: Blease Overview
Blease Overview •Established in 1946 in Chesham, UK •Fiscal 2004 revenue of approx. GBP 10 Million •Fiscal 2005 EPS guidance neutral •Sales in 80 countries worldwide (Non- US/Canada) •Specialist in the design, manufacture and distribution of anaesthesia systems •Full range of low/mid/high level anae
Slide 49: Blease Portfolio of Products: Focus Family
Blease Portfolio Of Products Focus® family Focus 6500 Focus 8500 Focus 2200
Slide 50: Blease – New Product Introduction
Blease – New Product Introduction Sirius® family New Sirius 2000 Sirius 3000 w/ 6500 ventilator Sirius 3000 w/ 8500 ventilator
Slide 51: Blease Portfolio of Products: Genius MRI
Blease Portfolio Of Products Genius® MRI
Slide 52: Blease Technology - OEM
Blease Technology - OEM Absorber 6500 ventilator 8500 ventilator Datum Vaporizers •Worldwide agreements with other companies to supply ‘state of the art’ technology to companies enabling them to offer best product solutions in their local markets.
Slide 53: OSI Medical Solutions
OSI Medical Solutions •Dolphin Medical •Spacelabs Ambulatory Blood Pressure (ABP) •Medical Data •Osteometer Meditech
Slide 54: Medical Solutions - Background
Medical Solutions - Background Medical Solutions is comprised of: ! Dolphin Medical ! Spacelabs ABP ! Spacelabs Medical Data ! Osteometer MediTech Headquartered in Issaquah WA. ! Employees approximately 230 people globally Manufacturing facilities located: ! Issaquah, WA Hyderabad, India ! Hawthorne
Slide 55: Dolphin Medical, Inc. – Pulse Oximetry
Dolphin Medical, Inc. – Pulse Oximetry Pioneer in Pulse Oximetry Dolphin line of compatible pulse oximetry sensors Dolphin ONE - high performance oximetry platform Established OEM Manufacturer of oximetry sensors and hardware Market ! $700M market for oximetry accessories (compatible cables and sens
Slide 56: Dolphin Market
Dolphin Market Opportunities Nellcor Key Patents expired Nov 2003 ! Dolphin Medical significant leverage Emerging market for high performance, 2nd generation oximetry ! Current sensors are analog and signal quality suffers. ! Dolphin utilizes digital signal processing ! Dramatically improve signal q
Slide 57: Dolphin Products
Dolphin Products Compatible Sensors ! FDA approved ! Clinically validated for patient safety ! Meet or exceed manufacture specification for accuracy ! Offer “decree of monitor compatibility” ! Competition includes Envitech, MediAid, Sensidyne, Goodmoa. First pocket PC Oximeter •First oximeter in a c
Slide 58: Dolphin Products continued
Dolphin Products continued.. Dolphin 2150 Hand-Held Oximeter ! New full-featured hand-held pulse oximeter ! Dolphin ONE™ Technology ! Battery or AC operation ! Temperature Option (YSI series) ! Printing Capability ! Backlit display Dolphin 2100 Stand-Alone Pulse Oximeter ! A full featured stand - al
Slide 59: Spacelabs ABP - Background
Spacelabs ABP - Background ABP – “Ambulatory Blood Pressure” ! Spacelabs Medical product ! Measures patients blood pressure remotely ! Sold over 30,000 units globally ! Gold Standard – World wide for ABP ! Fully Validated – AMII, BHS ! 95% Market Share in Clinical Research MARKETS ! University / Hos
Slide 60: Spacelabs ABP - Market Share
Spacelabs ABP - Market Share International USA Spacelabs* 30% Spacelabs* 40% SunTech 20% SunTech 25% Novacor 15% Welch Allyn 25% Meditech 15% A&D 5% A & D 10% All Others 5% All Others 10% * Now part of OSI Medical Solutions
Slide 61: Spacelabs Medical Data
Spacelabs Medical Data* Background ! Established in 1985 – Holter research services for landmark C.A.S.T study ! First ECG studies conducted in 1998 ! Domestic and International single and multi-site trials for 80 sponsors in 65 countries ! Approximately 300 trials since 1995 Services Offered ! Core
Slide 62: Spacelabs Medical Data Market Share
Spacelabs Medical Data* Market Share Other 11% SLMD 9% BMS eResearch 12% 53% Covance 15% Marketplace ! Estimated growth to 1.4 billion for ECG core labs by 2007 ! Global R & D expanding by 7.2% a year ! Number of Phase 1 studies have increased by 8.2% each year over last 4 years ! Small number of es
Slide 63: Med Data - Opportunity Driven By New Regulation
Med Data - Opportunity Driven By New Regulation November 2002 FDA-Health Canada Concept Paper ! All new drugs must be tested for cardiac safety !! Impact on Volume ! ECG should be recorded and stored as a digital signal !! Impact on Price ! ECG readings should be performed by cardiologists operating
Slide 64: Osteometer MediTech, Inc
Osteometer MediTech, Inc Background ! Founded 1989 in Denmark ! Bone Densitometers for diagnosis of osteoporosis and osteopenia (low bone mass). ! Peripheral devices: forearm and heel. ! Asia (Japan and Korea) are Osteometer’s main markets: 66% of revenue. ! Located in Hawthorne, CA Competition Dome
Slide 65: Summary
Summary
Slide 66: OSI Healthcare Opportunities
OSI Healthcare Opportunities 1. Spacelabs replacement cycle: ! Spacelabs installed base of 110,000 units worldwide ! 8-12 year replacement cycle ! 9%-10% of installed base or approximately 10,000 units replaced annually ! Average sale price $15,000 - $25,000 per unit ! Annual Revenue Potential $150
Slide 67: OSI Healthcare Opportunities continued
OSI Healthcare Opportunities continued…. 3. Spacelabs Manufacturing Synergies ! Spacelabs outsources approximately $50 M of manufacturing annually ! Of this, $25 million identified as being transitioned from 3rd party vendors to OSI group companies ! Transition begun in Q4 fiscal 2004, financial ben
Slide 68: OSI Healthcare Opportunities continued
OSI Healthcare Opportunities continued.. 7. Dolphin Pulse Oximeters ! Nellcor compatible sensors ! Conmed Inc. (NASDAQ: CNMD) relationship ! Next generation pulse oximeters: Dolphin One ! Leverage Spacelabs installed base 8. Med Data Growth ! New regulations for cardiac testing in clinical trials 9.
Slide 69: Summary
Summary • Healthcare group a vigorous competitor with opportunity for strong revenue growth • Leverage revenue growth to deliver industry level operating margins of approximately 9% to 11% • Complete suite of perioperative products • Optoelectronics manufacturing provides vertical integration • Grow
Slide 70: Thank You
Thank You