|[January 17, 2013]
OSI Systems Announces Agreement with TSA
HAWTHORNE, Calif. --(Business Wire)--
OSI Systems (News - Alert), 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 (News - Alert) 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 madate.
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: OSIS-G
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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