OSI Systems Announces Agreement with TSA
18 January 2013 - 11:02AM
Business Wire
OSI Systems, Inc. (NASDAQ: OSIS), a vertically integrated
provider of specialized electronics and services, announced today
that Rapiscan Systems, its Security division, has reached an
agreement with the U.S. Transportation Security Administration
(TSA) regarding the Rapiscan Secure 1000SP Advanced Imaging
Technology (AIT) systems and Automated Target Recognition (ATR)
software. The agreement relates to the contract underlying the
issues raised in a “show cause” letter delivered to the Company by
the TSA on November 9, 2012.
“We are pleased to reach a mutually satisfactory agreement with
the TSA,” OSI Systems President and CEO, Deepak Chopra, commented.
“We have had a close working relationship with TSA and its
predecessor agencies for the better part of two decades, during
which time we have together pioneered many of the transportation
security technologies in use today. As we continue that
relationship, we look forward to continuing to provide leading-edge
technologies and services to the TSA.”
Under the terms of the agreement, Rapiscan and TSA determined
that the Secure 1000SP would not be ready to meet the next level of
ATR software by the congressionally mandated June 2013 deadline. As
the Secure 1000SP has been operated by TSA as an effective imaging
system, TSA plans to deploy these systems, with Rapiscan’s
assistance, to U.S. government agencies that already rely on the
Secure 1000 product line or can enhance their security programs
with the Secure 1000SP. The agreement enables the U.S. government
to continue to benefit from the investments made by TSA, while
allowing TSA to meet the congressional ATR mandate. The agreement
results in the mutually-agreed conclusion of ATR software
development for the Secure 1000SP, but continues Rapiscan’s overall
contract with TSA for AIT systems.
Under Rapiscan’s contract to provide AIT systems, the Company
did not sell any AIT units to the TSA in fiscal 2012 or fiscal
2013. The Company had approximately $5 million of backlog with
respect to ATR software development as of September 30, 2012, which
will be de-booked. The Company expects to report a related $2.7
million one-time impairment and other charge in the quarter ended
December 31, 2012. While the Company reached agreement with the TSA
regarding the AIT/ATR contract, final resolution of the “show
cause” letter is subject to Department of Homeland Security
disposition. The Company is currently working to complete that
process.
About OSI Systems, Inc.
OSI Systems, Inc. is a vertically integrated designer and
manufacturer of specialized electronic systems and components for
critical applications in the homeland security, healthcare, defense
and aerospace industries. We combine more than 30 years of
electronics engineering and manufacturing experience with offices
and production facilities in more than a dozen countries to
implement a strategy of expansion into selective end product
markets. For more information on OSI Systems, Inc. or any of its
subsidiary companies, visit www.osi-systems.com. News Filter:
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This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements relate to the Company’s current
expectations, beliefs, projections and similar expressions
concerning matters that are not historical facts and are not
guarantees of future performance. Forward-looking statements
involve uncertainties, risks, assumptions and contingencies, many
of which are outside the Company’s control, that may cause actual
results to differ materially from those described in or implied by
any forward-looking statement. All forward-looking statements are
based on currently available information and speak only as of the
date on which they are made. The Company assumes no obligation to
update any forward-looking statement made in this press release
that becomes untrue because of subsequent events, new information
or otherwise, except to the extent it is required to do so in
connection with its ongoing requirements under Federal securities
laws. For a further discussion of these and other factors that
could cause the Company’s future results to differ materially from
any forward-looking statements, see the section entitled “Risk
Factors” in the Company’s Annual Report on Form 10-K for the year
ended June 30, 2012 and other risks described in documents
subsequently filed by the Company from time to time with the
Securities and Exchange Commission.
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