Torrance, Calif. (Vocus) January 8, 2010
Rapiscan Systems, Inc., a leading global supplier of security inspection solutions, today announced that it has been awarded, through its Rapiscan division, a 10-year contract from the Puerto Rico Ports Authority (“PRPA”) to provide a complete turn-key solution resulting in the scanning of all containerized inbound cargo at the Port of San Juan. Under the terms of the contract, which includes two renewal options for an additional five years each, Rapiscan will provide cargo scanning services using multiple Rapiscan Eagle® high-energy X-ray systems at various locations at the Port of San Juan. The Port of San Juan is a major cargo hub in the Caribbean, handling nearly 1.7 million TEU’s (Twenty-foot Equivalent Units), including both inbound and outbound, in 2008.
OSI Systems’ (Rapiscan Systems’ parent company) CEO Deepak Chopra stated, “The cargo scanning initiative at the Port of San Juan represents not only a new business model for the Company but a new model in port security as a first-of-its-kind program which would result in the scanning of all inbound containers at high throughput and low cost. To fulfill the PRPA’s stringent technical and logistical requirements for this ground-breaking project, we have designed a fast, efficient and comprehensive solution based on our operations expertise and our state-of-the-art Rapiscan Eagle® high energy X-ray systems through the Company’s newly initiated Screening Solution Business, S2 Global.”
“Moreover,” Mr. Chopra continued, “the S2 business substantially expands the size of the market we address, by opening new opportunities with customers who are not in the market for outright ownership of scanning equipment, or are otherwise seeking the efficiencies and operational expertise offered by our turn-key solutions team. As more ports around the world implement U.S.-mandated cargo inspection processes, we expect opportunities for our Screening Solution business to grow. We believe this newly-added business model will, in the long run, significantly enhance our opportunities and financial results in our Security Division.”
Ajay Mehra, President of Rapiscan, added, “We specifically targeted the Port of San Juan for this project as one in which we are able to showcase the type of comprehensive, turn-key, custom-tailored solution that is uniquely available from the Company’s Screening Solution business, S2 Global. The S2 business, led by Jonathan Fleming, former COO of the U.S. Transportation Security Administration, is an important addition to our historically technology-centric, manufacturing-driven business model in that it is a pure service model leveraging our in-house portfolio of leading-edge scanning technologies. This services business is expected to generate comparatively higher margins than equipment sales, and provides a longer stream of revenues for a given sale.”
Director of the Puerto Rico Ports Authority, Mr. Alvaro Pilar-Vilagrán, stated that “the Puerto Rico Ports Authority is implementing this unprecedented scanning program as part of Governor Luis Fortuño's efforts to reduce crime. The program aims to eliminate the import of drugs, illegal weapons and other contraband into Puerto Rico, while affording the Ports Authority a mechanism to fight tax evasion. The turn-key scanning solution proposed by the S2 division of Rapiscan prevailed in a competitive process as the most effective and efficient means of achieving the PRPA’s requirements. We believe this program will set the standard in port security, and creates a new model for public-private cooperation that achieves rapid implementation with minimum investment by the taxpayers.”
About Rapiscan Systems:
Rapiscan Systems, a division of OSI Systems, Inc. is a leading supplier of security inspection solutions utilizing X-ray and gamma-ray imaging, and advanced threat identification techniques such as neutron and diffraction analysis. The company’s products are sold into four market segments; Baggage and Parcel Inspection, Cargo and Vehicle Inspection, Hold Baggage Screening and People Screening. The company has an installed base globally of more than 70,000 security and inspection systems. The Rapiscan Systems product line is manufactured at four locations and supported by a global support service network. For more information on Rapiscan Systems, please visit http://www.rapiscansystems.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding the company’s expectations, goals or intentions about the future, including, the Company’s contract to provide an integrated turn-key solution through its wholly owned operational subsidiary, S2 Global Inc. The actual results may differ materially from those described in or implied by any forward-looking statement. In particular, the timing, and delivery of the inspection systems may not ultimately remain in line with the company’s current expectations. Other important factors are set forth in the Securities and Exchange Commission filings OSI Systems, Inc. All forward-looking statements speak only as of the date made, and the company undertakes no obligation to update these forward-looking statements.