OSI Systems Announces Agreement with TSA

  OSI Systems Announces Agreement with TSA

Business Wire

HAWTHORNE, Calif. -- January 17, 2013

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: 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.

Contact:

OSI Systems, Inc.
Ajay Vashishat
Vice President, Investor Relations
866-617-0796
rapiscanmedia@rapiscansystems.com
 
Press spacebar to pause and continue. Press esc to stop.