OSI Systems, which owns Rapiscan Systems (a large manufacturer of airport scanners), appears to be rotten to the core.

We believe the company bribed government officials in Albania to get a concession with a top line value of $150 million to $250 million by literally giving away half of the concession to a highly suspect partner. A major contract in Mexico is up for renewal, and pricing on the original six-year contract seems unduly rich – even egregious. We estimate this one contract, despite being only 15% of revenue, accounts for about half of the company’s EBITDA (a key profit measure). If this renewal is scrutinized closely, it could result in a substantial impact to the company’s financials.

This is our video exposé of OSI. Our more comprehensive written report is here. Note we are short the securities of OSI at the time of publication.

If you have information you want to share on OSI or any of its partners, email us at: RapiscanRevealed@muddywaterscapital.com.

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