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OSI Systems declares agreement with TSA for its software systems
Jan 18, 2013 (M2 EQUITYBITES via COMTEX) --
OSI Systems Inc (NASDAQ:OSIS), a provider of specialised electronics and services, disclosed on Thursday that its Security division Rapiscan Systems reached an agreement for the Rapiscan Secure 1000 Advanced Imaging Technology (AIT) systems and Automated Target Recognition (ATR) software, with the US Transportation Security Administration (TSA).
Further, the company said that the agreement relates to the contract underlying the issues raised in a "show cause" letter to it by the TSA on 9 November 2012.
Rapiscan and TSA decided, as per the agreement, that the Secure 1000 would not be ready to meet the next level of ATR software by the congressionally mandated June 2013 deadline and since TSA has been operating the Secure 1000 as an effective imaging system, it will deploy these systems with Rapiscan's assistance to US government agencies that already rely on the Secure 1000 product line or enhance their security programs with the same.
Accordingly, the US government will continue to benefit from the investments made by TSA while allowing TSA to meet the congressional ATR mandate, besides the mutually-agreed conclusion of ATR software development for the Secure 1000 and at the same time continuing Rapiscan's overall contract with TSA for AIT systems.
Additionally, the company mentioned that as per Rapiscan's contract to provide AIT systems it did not sell any AIT units to the TSA in fiscal 2012 or fiscal 2013 and it had about USD5m of backlog with respect to ATR software development as of 30 September 2012 that will be de-booked.
Also, the company said that it expects to report a related one-time impairment and other charge of USD2.7m in the quarter ended 31 December 2012 and although it reached agreement with the TSA regarding the AIT/ATR contract, the final resolution is subject to Department of Homeland Security disposition, adding that it is presently working to complete that process.
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