HAWTHORNE, Calif.--(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, 310-349-2237
Vice
President, Business Development
avashishat@osi-systems.com
Source: OSI Systems, Inc.
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