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  "documentTitle": "OSI Systems, Inc. (OSIS)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2017-12-06 00:00:00",
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  "notes": "The slide uses a deductive reasoning approach to isolate the impact of a specific contract on overall division margins.",
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      "text": "Once we calculate the incremental operating profit from the Mexico turnkey contract, we divide it by the incremental revenue from the contract. The result is an operating profit margin of 31.9%.",
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      "text": "operating profit margin: 31.9%",
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      "text": "The key to our estimate methodology is looking at changes between FY2012 (when the Mexico contract was negligible) to FY2014 (when the contract appears to have fully ramped).",
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      "text": "We assume that the lost $81.5 million of comp revenue in FY2013 had an operating profit margin of 8.0%. Taking that, we estimate how much operating profit the Security Division lost with the decrease of comp revenue ($6.5 million).",
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      "text": "The final task is to solve for the margin associated with the incremental revenue from Mexico. First, we note that outside of the Mexico turnkey contract, Security Division revenue declined between FY2012 and FY2013.",
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