This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

TSA To Remove Controversial X-ray Scanners

Not all of the machines will be replaced. Castelveter said that some airports that now have backscatter scanners will go back to having metal detectors. That's what most airports used before scanners were introduced.

The Rapiscan scanners have been on their way out for months, in slow motion.

The government hadn't bought any since 2011. It quietly removed them from seven major airports in October, including New York's LaGuardia and Kennedy airports, Chicago's O'Hare, and Los Angeles International. The TSA moved a handful of the X-ray scanners to very small airports. At the time, the agency said the switch was being made because millimeter-wave scanners moved passengers through faster.

Rapiscan parent company OSI Systems Inc. said it will help the TSA move the scanners to other government agencies. It hasn't yet been decided where they will go, said Alan Edrick, OSI's chief financial officer, in an interview.

Scanners are often used in prisons or on military bases where privacy is not a concern.

"There's quite a few agencies which will have a great deal of interest" in the scanners, Edrick said.

OSI is taking a one-time charge of $2.7 million to cover the money spent trying to develop software to blur the image, and to move the machines out of airports, Edrick said.

The contract to change the software on the scanners came under scrutiny in November when the TSA delivered a "show cause" letter to the company looking into allegations that it falsified test data, which the company denied. On Thursday it said final resolution of that issue needs approval by the Department of Homeland Security.

The agreement with the TSA is an indication that OSI Systems will be cleared of the issues raised by the agency, Roth Capital Partners analyst Jeff Martin wrote on Friday. OSI shares soared $2.37, or 3.5 percent, to close at $70.02.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,987.51 -61.49 -0.36%
S&P 500 1,985.54 -11.91 -0.60%
NASDAQ 4,567.5980 -24.2080 -0.53%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs