OSI Systems Receives $10 Million Order to Provide Mobile Cargo and Vehicle Inspection Systems

Rhea-AI Summary

OSI Systems (NASDAQ: OSIS) has secured a $10 million order for its Z Backscatter® Van (ZBV®) cargo and vehicle inspection systems. The order, placed by an international customer, includes maintenance, training, and support services. These advanced security solutions are slated for deployment in border customs applications, reinforcing the company's role in enhancing global border security.

CEO Deepak Chopra expressed enthusiasm about delivering one of their most advanced and widely deployed security solutions, emphasizing the important role ZBV systems play in border security enhancement.

Positive

• Secured a $10 million order for cargo and vehicle inspection systems
• Order includes follow-on maintenance, training, and support services
• Strengthens OSI Systems' position in the border security market

Negative

• None.

Insights

Financial Analyst

The $10 million order for OSI Systems' Security division represents a significant contract win, potentially impacting the company's financial outlook. While the exact revenue recognition timeline isn't specified, this order could contribute meaningfully to the division's performance in upcoming quarters.

OSI Systems' Security division, which includes cargo and vehicle inspection systems, has been a key growth driver for the company. This order reinforces the division's market position and demonstrates continued demand for advanced security solutions in border control applications. The inclusion of maintenance, training and support services in the contract suggests potential for ongoing revenue streams beyond the initial equipment sale.

Investors should note that international orders can be subject to geopolitical risks and currency fluctuations. However, OSI's global diversification strategy helps mitigate some of these risks. The company's ability to secure international contracts also highlights its competitive advantage in the global security technology market.

While a $10 million order is positive news, it's important to contextualize this against OSI Systems' overall financial performance. In fiscal year 2022, the company reported total revenues of $1.18 billion, with the Security division contributing $453 million. This order represents approximately 2.2% of the Security division's annual revenue, a modest but noteworthy contribution.

Investors should monitor future earnings reports to assess the impact of this order on the company's financial performance and any potential follow-on orders from this or other international customers.

Technology Expert

The Z Backscatter® Van (ZBV®) technology represents a significant advancement in mobile cargo and vehicle inspection systems. This non-intrusive inspection method uses backscatter X-ray technology to provide rapid, drive-by screening of vehicles for threats and contraband.

Key advantages of the ZBV system include:

• Mobility: The system can be quickly deployed to different locations, enhancing flexibility in border security operations.
• Efficiency: Drive-by screening allows for high-throughput inspections without requiring vehicles to stop, reducing congestion at border crossings.
• Image quality: Backscatter technology provides clear, easy-to-interpret images that can reveal organic materials often associated with explosives or narcotics.
• Safety: The system operates with low radiation doses, minimizing health risks to operators and the public.

The inclusion of maintenance, training and support in the contract is important for ensuring optimal system performance and longevity. This comprehensive package likely contributed to OSI Systems winning the contract and demonstrates the company's commitment to long-term customer relationships.

From a competitive standpoint, OSI Systems' success in securing this international order suggests that their ZBV technology maintains a strong market position. However, the cargo and vehicle inspection market is highly competitive, with players like Rapiscan Systems (a subsidiary of OSI Systems), Smiths Detection and L3Harris Technologies also offering advanced solutions. OSI's ability to continue innovating and improving their technology will be important for maintaining their market share in this evolving sector.

HAWTHORNE, Calif.--(BUSINESS WIRE)-- OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced that its Security division received an order from an international customer for approximately $10 million to provide the Company’s Z Backscatter® Van (ZBV®) cargo and vehicle inspection systems including follow on maintenance, training and support. These inspection systems are expected to be deployed for border customs applications.

OSI Systems’ Chairman and CEO, Deepak Chopra, commented, “We look forward to delivering one of our most advanced and widely deployed security solutions. Our ZBV systems play a crucial role in enhancing border security, and we are excited to support our customer’s mission to ensure safe and secure borders.”

About OSI Systems

OSI Systems 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. The Company combines more than 40 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 or any of its subsidiary companies, visit www.osi-systems.com. News Filter: OSIS-G

Forward-Looking Statements

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 OSI Systems’ current expectations, beliefs, and projections concerning matters that are not historical facts. Forward-looking statements are not guarantees of future performance and involve uncertainties, risks, assumptions, and contingencies, many of which are outside OSI Systems’ control and which may cause actual results to differ materially from those described in or implied by any forward-looking statements. Undue reliance should not be placed on forward-looking statements, which are based on currently available information and speak only as of the date on which they are made. OSI Systems 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 factors that could cause OSI Systems’ future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in OSI Systems’ most recently filed Annual Report on Form 10-K and other risks described therein and in documents subsequently filed by OSI Systems from time to time with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729173567/en/

OSI Systems, Inc.

Ajay Vashishat

Vice President, Business Development

310-349-2237

avashishat@osi-systems.com

Source: OSI Systems, Inc.

FAQ

What is the value of the recent order received by OSI Systems (OSIS)?

OSI Systems (OSIS) received an order valued at approximately $10 million for their Z Backscatter® Van (ZBV®) cargo and vehicle inspection systems, including maintenance, training, and support services.

What product is OSI Systems (OSIS) providing in this $10 million order?

OSI Systems (OSIS) is providing their Z Backscatter® Van (ZBV®) cargo and vehicle inspection systems in this $10 million order.

What is the intended application for the OSI Systems (OSIS) inspection systems in this order?

The Z Backscatter® Van (ZBV®) inspection systems ordered from OSI Systems (OSIS) are expected to be deployed for border customs applications, enhancing border security.

Who placed the $10 million order with OSI Systems (OSIS)?

The $10 million order for OSI Systems' (OSIS) Z Backscatter® Van (ZBV®) inspection systems was placed by an international customer, though the specific customer was not named in the press release.