OSI Systems Provides Update on Recent TSA Order Cancellation
09 December 2013 - 6:40PM
Business Wire
OSI Systems, Inc. (NASDAQ: OSIS) today announced that its
security division, Rapiscan Systems, provided an update on the
delivery order recently terminated by the U.S. Transportation
Security Administration (TSA). The Company believes the termination
resulted from Rapiscan’s use of an upgraded component in the AT-2
detection systems. While the component change was vetted by
Rapiscan’s internal quality assurance, it did not meet the
contractual requirement of obtaining TSA’s approval in
advance. When Rapiscan leadership discovered the error, they
proactively informed TSA of the configuration change, the related
procedural lapse and proposed a course for corrective action.
OSI Systems Chief Executive Officer, Deepak Chopra, commented,
“The referenced component is the X-ray generator, an electrical
component with no moving parts or software. The generator’s only
input is electricity and its only output is X-rays, making it
effectively an X-ray light bulb. The new generator has the same key
subcomponents as the TSA-approved generator, but adds some
incremental design improvements for the purposes of enhancing
reliability.”
The Company stated that the recent proposal that resulted in
TSA’s award to Rapiscan of the delivery order in question called
out to TSA that Rapiscan would use X-ray generators manufactured in
China and TSA subsequently awarded the delivery order to Rapiscan.
The new generator is manufactured by Shanghai Advanced
Non-Destructive Testing (SANDT), a China-based company. SANDT
supplies X-ray generators to many leading suppliers of security
X-ray systems, including many of Rapiscan’s competitors. As a
long-standing supplier to the industry, SANDT has thousands of
X-ray generators in use in security systems around the world.
According to TSA’s own preliminary test results, the SANDT
manufactured generator shows comparable detection capability and
false alarm rates.
About OSI Systems, Inc.
OSI Systems, Inc. is a vertically integrated designer and
manufacturer of specialized electronic systems and components for
critical applications. The Company sells its products and services
in diversified markets, including homeland security, healthcare,
defense and aerospace. The Company has more than 30 years of
experience in electronics engineering and manufacturing and
maintains offices and production facilities located in more than a
dozen countries. It implements a strategy of expansion by
leveraging its electronics and contract manufacturing capabilities
into selective end product markets through organic growth and
acquisitions. For more information on OSI Systems Inc. or
any of its subsidiary companies, visit www.osi-systems.com.
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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, 2013 and other risks described in documents filed by
the Company from time to time with the Securities and Exchange
Commission.
OSI Systems, Inc.Ajay Vashishat, 310-349-2237Vice
President, Business Developmentavashishat@osi-systems.com
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