OSI Systems, Inc. · NASDAQ:OSIS
OSI Systems — Investor Presentation (February 2005)
59 slides from OSI Systems's investor presentation, February 2005
Slide 1: Corporate Presentation: OSI Security Group
CORPORATE PRESENTATION: OSI Security 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 • Healthcare Summary • Optoelectronics and Manufacturing Summary • OSI Security 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 President Security Ajay Mehra 15 Group Anuj Wadhawan CFO 13 President, Dave Tilley 10* Spacelabs Medical Andreas F. Kotowski CTO 11 President, Manoocher Mansouri 16 UDT Sensors *Spacelabs acquired by OSI Systems on M
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 Healthcare Overview
OSI Healthcare Overview ! Committed to Healthcare since 1988; ! Pioneered pulse oximetry business; ! Experienced OEM manufacturer for companies such as: Tyco, GE, Datascope, etc; ! Completed and integrated several acquisitions; ! Spacelabs installed base of 110,000 patient monitors; ! Spacelabs bran
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 Security Group Companies
OSI’s Security Group Companies
Slide 17: OSI's Security Group Overview
OSI’s Security Group Overview ! Leader in multi-billion dollar worldwide security and inspection market ! Only vertically integrated security solutions provider ! Four Key Security Subsidiaries ! Rapiscan – X-ray and Gamma scanning devices ! METOR – Metal Detectors ! Ancore – Material Specific Detec
Slide 18: Market Landscape
Market Landscape SEGMENT TECHNOLOGIES COMPANIES People Screening Metal Detectors OSIS, Ceia, Garret Backscatter OSIS, AS&E Baggage & Parcel Inspection - Carry-on & Non-Aviation X-Ray OSIS, Smiths, L3 - Hold Baggage Screening CT OSIS*, L3, GE (InVision) (Checked Baggage) Multi View X-Ray OSIS*, Smith
Slide 19: Competitive Landscape: Baggage & Parcel/People Screening
Competitive Landscape: Baggage & Parcel/People Screening Applications Customers Carry-on baggage U.S. Airports (TSA) British Airport Authority inspection Major European Airports Major Asian Airports Parcel inspection Israel Airport Authority U.S. Marshals Corporate mailrooms DOD DHS Visitor accompan
Slide 20: Baggage & Parcel Inspection Products
Baggage & Parcel Inspection Products
Slide 21: Baggage & Parcel Scanning Products
Baggage & Parcel Scanning Products Large parcels Automatic Detection Weatherproof, Transportable, Military Design Palletized Freight Checkpoint Security
Slide 22: 620XR – Checkpoint Baggage Screening
620XR – Checkpoint Baggage Screening • Targeted for use at airports, New government facilities & major public events • Modular system architecture • Innovative Design • Unparalleled reliability and serviceability • Highest Image Quality • Lowest Cost of Operation
Slide 23: 620XR Threat Images
620XR Threat Images • Hand Gun • Explosives
Slide 24: 522WP, Rugged All-Weather Machine
522WP, Rugged All-Weather Machine •Product is a self contained shipping container New •Helicopter lifting sling points •Target Market: !Naval operations (securing destination ports prior to the physical arrival of the vessel); !Outdoor venues; Freezing, and Tropical environments (-20 to 50C)
Slide 25: People Screening Products
People Screening Products * Security and Inspection
Slide 26: Walk Through Metal Detectors
Walk Through Metal Detectors Metor 200 WP Metor 200 HS Metor 300 (Weather Proof)
Slide 27: Rapiscan Secure 1000 Personnel Screener
Rapiscan Secure 1000 Personnel Screener • Smallest footprint in the industry • Lowest x- ray dosage in industry • Largest installed base *Only commercially deployed technology that detects ceramics, plastics, metal and explosives
Slide 28: Detection Capabilities
Detection Capabilities (shown w/Crystal ClearTMSoftware) Belt Buckle Ceramic Knife C-4 Wrist Watch 9mm Glock (with Plastic Handle) Keys Wallet Coins For privacy and Operator safety concerns, the unit can be operated remotely.
Slide 29: Hold Baggage Screening Products (Checked Baggage)
Hold Baggage Screening Products (Checked Baggage)
Slide 30: New Products: Hold Baggage Screening
New Products: Hold Baggage Screening MVXR5000: 5-VIEW X-RAY Automated High Speed Multi-View X-Ray Applications: •High Speed Hold Baggage Screening (Non-USA) Technology Employed: •High Quality Image Dual Energy, Multiple View, Transmission X-ray •Automatic Explosives Detection Algorithms New Effectiv
Slide 31: New Product: Hold Baggage Screening XRD1000
New Product: Hold Baggage Screening XRD1000, Explosives Detection Device (“EDD”) • High quality dual-energy x-ray images with automatic detection New • Dual energy information is given to x-ray difraction system to automatically check against a database of explosive materials • Throughput- 150 bags
Slide 32: Certified Explosives Detection Systems (EDS)
Certified Explosives Detection Systems (“EDS”) COMPETITORS GE (InVision) L-3 Reveal Tech. OSI Model CTX Examiner CT80 Electronic Real Time Tomography Throughput 300-400 300-400 80 approx. 1200+ bags/hr bags/hr bags/hr bags/hr (Under Development) ADVANTAGES of OSI approach ! Price/performance advanta
Slide 33: EDS Products In Development
EDS Products In Development Checkpoint EDS High Speed CT Hold Baggage Screening • 60cm diameter tunnel • 1m wide conveyor • Minimum throughput of 300 bags per hour • 1500 bag per hour • Low installation cost for in-line installation
Slide 34: Cargo & Vehicle Inspection (CVI)
Cargo & Vehicle Inspection (“CVI”)
Slide 35: Cargo & Vehicle Inspection – The Opportunity
Cargo & Vehicle Inspection – The Opportunity • Cargo inspection business is in its infancy • Only 5% of incoming containers into the U.S. being inspected • Current methods of manual inspection not feasible on large scale due to throughput and high false alarm rates • Currently no standard solution "
Slide 36: Cargo & Vehicle Inspection: Three Scanning Technologies
Cargo & Vehicle Inspection Three scanning technologies: X-Ray Gamma Source Neutron Analysis – material specific Fixed, mobile and relocatable solutions
Slide 37: Competitive Landscape: Cargo & Vehicle Inspection
Competitive Landscape: Cargo & Vehicle Inspection Applications Major Customers Duty & Drug Interdiction Malaysia DHS WMD/Explosives South Korea DOD Ports & Border Crossings Taiwan India Force Protection (DOD) China Mexico Air Cargo Inspection Israel Romania Australia X-ray Gamma Material Specific Hy
Slide 38: Fixed & Relocatable Site Configurations
Fixed & Relocatable Site Configurations Korea Relocatable X-Ray 9MeV Hong Kong Fixed Site X-Ray 9MeV GaRDS Portal (Gamma) VEDS TNA (Neutron)
Slide 39: Mobile Cargo & Vehicle Inspection Products
Mobile Cargo & Vehicle Inspection Products
Slide 40: The GaRDS Product
The GaRDS Product Gamma Radiographic Detection Detectors System Gamma Source • One of these units is currently employed in India •170mm of steel penetration
Slide 41: Eagle – 6 MeV
Eagle – 6 MeV Operator’s Cab Front Driver Cab (another in back) •Wireless Data Transmission •Mobile Within a Seaport •Relocatable by Truck, Rail or Ship •Highly Maneuverable •Powerful 6 MV X Rays •Scan a 20 ft Container in Less Than 10 Seconds •100% Inspection in Single Pass •Scan in both directions
Slide 42: Penetration by Energy Level
Penetration by Energy Level 450keV X-Ray System 2-3MeV X-Ray System Unable To Penetrate 6MeV X-Ray System
Slide 43: Automatic Material-Specific CVI Products
Automatic Material-Specific CVI Products
Slide 44: Beyond Imaging
Beyond Imaging: Imaging Technologies: X-ray and Gamma ! Results analyzed by operator ! Human decision in threat detection Advanced Technologies: Thermal Neutron Analysis (TNA) and Pulsed Fast Neutron Analysis (PFNA) ! Automated threat detection and analysis ! Material Specific ! Position Specific
Slide 45: Vehicular Explosives Detection System (VEDS)
Vehicular Explosives Detection System (VEDS) ! Utilizes Thermal Neutron Analysis (“TNA”) technology !VEDS is a simple to operate, “red light or green light” type of system (shown here in a mobile) ! Can be configured with multiple heads for higher throughput ! Available in three configurations: on r
Slide 46: Pulsed Fast Neutron Analysis (PFNA)
Pulsed Fast Neutron Analysis (“PFNA”) • Patented material-specific technology Gamma Detectors • Developed over 20 years at the cost of approx. $100m • Identifies the contents of a container at its elemental- chemical level Truck Being •Automatically detects security threats and contraband Scanned •M
Slide 47: Aerial Photo of Ysleta crossing at El Paso PFNA Site
Aerial Photo of Ysleta crossing at El Paso PFNA Site Commissioning expected early 2005 Existing inspection facility ACI (PFNA) US-Mexico border Location
Slide 48: El Paso Milestones
El Paso Milestones Project Milestones Dates* Calibration & Optimization Jan – Apr 2005 Handover to Government Apr 2005 Government Testing/Training Apr – Aug 2005 Report Submission By Govt Aug – Oct 2005 *Current Timetable as of Feb 2005
Slide 49: Samples of Some Actual PFNA Material Signatures
Samples of Some Actual PFNA Material Signatures Materials Elements Rice Cocaine C4 Explosive Glass Aluminum Oxygen 1.01 6.13 Signal Signal Signal Signal Signal 2.21 Signal 1.71 3.09 3.00 3.69 3.85 Energy (MeV) Energy (MeV) Energy (MeV) Energy (MeV) Energy (MeV) Energy (MeV) Apples Amphetamine Sarin
Slide 50: El Paso Radiography Image from Calibration
El Paso Jan. 05 - Radiography Image from calibration process Radiography image
Slide 51: El Paso Carbon Image from Calibration
El Paso Jan. 05 - Carbon Image from calibration process
Slide 52: El Paso Iron Image from Calibration
El Paso Jan. 05 - Iron Image from calibration process
Slide 53: Example PFNA of a Passenger Car
Example PFNA of a Passenger Car • Operator’s Display, showing explosives laden automobile (before automatic alarms are shown)
Slide 54: Example PFNA of a Passenger Car
Example PFNA of a Passenger Car • Operator’s Display, alarmed only on the six explosives, and none of the innocuous items
Slide 55: OSI Cargo Scanning Vision – LA/Long Beach Port Challenge
OSI Cargo Scanning Vision – (Example LA/Long Beach port challenge) ! 12,000 containers arrive in LA daily ! 720 containers inspected daily – dogs, x-rays etc ! 43 are inspected by hand ! 45% of containers coming to US comes through LA Ports ! Foreign Shippers required to provide shipping manifest 24
Slide 56: Integrated Logistical Solution
Integrated Logistical Solution OSI Security Group: Industry’s only “Whole-Port Solution” Layer Three ~1% E ~2% ~$15-20m Layer Two ~3% Transfer of X-Ray Image X ~27% ~$8-12m Layer One ~30% Transfer of Gamma Image I ~20% ~$15-20m 50% T Incoming Cargo Total Investment: ~$38-52m
Slide 57: Commitment to R&D
Commitment to R&D $M FY05 FY04 R&D Investment First Quarter 6.6* 2.0 Second Quarter 7.1* 2.4 • Increase in Security Group R&D primarily attributable to: • HBS systems (Multi-view X-ray, EDS Electronic CT) • Cargo & Vehicle Inspection Products (such as TNA, PFNA & Hybrid Products) • Goal is to turn n
Slide 58: OSI Security Group Summary
OSI Security Group Summary ! Three distinct markets for security scanning: • People Screening, Baggage & Parcel Inspection and Cargo & Vehicle Inspection ! Successful history of integrating acquisitions ! Broadest technology platform and product portfolio for the Cargo & Vehicle Inspection market !
Slide 59: Thank You
Thank You