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SECURITY AND INSPECTION PRODUCTS
THE NEED IS GROWING, AND OSI Systems HAS THE ANSWER
The market for most security and inspection products developed in response to civilian airline hijackings, so historically a large portion of the Company's security and inspection products were sold and continue to be sold for use at airports. Recently though, the Company's security and inspection products have been increasingly used at locations in addition to airports, such as courthouses, government buildings, mail rooms, schools, prisons, unique locations such as Buckingham Palace in London, England.
In addition, the Company's security and inspection products are increasingly being used for non-security purposes, such as, cargo inspection to detect narcotics and contraband prevention of theft at semiconductor manufacturing facilities, quality assurance for agricultural products, detection of gold and currency.
THE CATALYSTS OF GROWTH
This industry has grown through a combination of public concern and government activism. As the following chronology of events shows, the industry is poised for continued expansion:
In the 1970s, in response to airline hijackings, the US Federal Aviation Administration ("FAA")establishes security standards for the screening of carry-on baggage for weapons, which later are also mandated by the United Nations for adoption by all member states, resulting in the installation of over 10,000 X-ray inspection systems in airports worldwide to date.
The United Kingdom Department of Transport, as well as the European Civil Aviation Conference ("ECAC"), an organization of 33 member countries, require their commercial airports to deploy systems for 100% screening of international checked baggage (by 1998 for the UK, and by 2000 for the ECAC).
The U.S. Congress enacts the Aviation Security Improvement Act of 1990, directing the FAA to establish and implement strict security measures and to deploy advanced technology for the detection of contraband including explosives, drugs, and currency.
In July 1996, President Clinton formed the White House Commission on Aviation Safety and Security (the "Gore Commission"), to review airline and airport security and to oversee aviation safety. In response to the initial report released by the Gore Commission, the United States enacted legislation that includes $144 million in appropriations for the initial deployment of advanced security and inspection technology at major U.S. airports. The Clinton Administration is continuing to fund procurements of $100 million annually for state-of-the-art detection equipment at major U.S. airports. A portion of this funding is allocated for TIP Ready X-ray (TRX) systems at security checkpoints throughout the nation. Rapiscan, through FAA funding, has deployed some 40 TIP systems in the last two years and is currently one of the vendors being evaluated for procurement decisions..
The Clinton Administration budgeted $100 million in fiscal 1999 and proposes Another $100 million for the purchase of state-of-the-art detection equipment for rapid deployment in major US airports.
New X-ray inspection equipment combines X-ray inspection with computer image enhancement capabilities to enable use in detecting narcotics, gold and currency, inspecting agricultural products, and the screening of cargo by customs officers and international shippers. OSI Systems is the parent company of Rapiscan, a premier provider of security and inspection products. Rapiscan has two branded end-product lines, the Rapiscan series, and Metorex.
Body Scanning: Secure 1000 (TM)
Metal Detection: Metor (TM)
Baggage Scanning: Rapiscan (TM)
Cargo Scanning: Rapiscan (TM)
Ensuring Safety Around the World Since entering the security and inspection products market, OSI has shipped about 2,500 units to about 50 countries. Here are some customers and installations that have purchased our security and inspection products since the beginning of 1993:
OSI's Security and Inspection Products World Wide Representative Customers
OVERSEAS: DOMESTIC:
Nanjing Airport; People's Republic of China
Prague Airport; Czech Republic
Gatwick Airport; England
Heathrow Airport; England
TNT Freight; England Federal Courthouses
Finnish Customs; Finland
Indian Customs; India
Japanese Embassies; worldwide
Malaysian Airport Board; Malaysia
Ministry of Agriculture & Fisheries; New Zealand
Pakistan Airports; Pakistan
Doha International Airport; Qatar
HAJ Terminal; Saudi Arabia
Spanish Radio/Television; Spain
Sri Lanka Government; Sri Lanka
Dubai Airport; U.A.E.
Ukraine Airport; Ukraine
United Kingdom Prison System; UK
Schipol Airport; Netherlands
Kremlin: Russia
Prisons; Hungary
Infraero; Brazil
Vatican
Major U.S. Airlines
Bush Intercontinental Airport
Federal Reserve Bank
JFK International Airport
Los Angeles County Courthouse
Los Angeles Intl. Airport
Miami Airport
Orlando Airport
Ronald Reagan National Airport
U.S. Department of Corrections
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