Airport security scanner could give boost to firm.

A fledgling security systems manufacturer owned by Hawthorne-based OSI Systems Inc. could hit the jackpot if the Federal Aviation Administration approves its body scanner product for widespread use in airports.

Rapiscan Security Products Inc. has sold five of the scanners to he FAA, which is testing their effectiveness. Should the agency greenlight acquisition of the refrigerator-sized scanners for use in airports nationwide, it could mean contracts worth tens of millions of dollars for 0SI.

The scanner is touted by its maker as the most effective way to identify metal, glass, plastic and ceramic weapons, plastic explosives, and vials or ampules filled with chemical or biological substances.

Rapiscan also is targeting the device as a way of identifying contraband in prisons, schools, embassies and border crossings, as well as smuggled gold and diamonds by mine workers.

A team of engineers and technicians is testing the product at the FAA's Atlantic City, N.J. research and development facility. Although no time line has been set, agency officials said testing could take weeks or months, after which the scanner will undergo operational testing at unspecified airports.

"We need to develop procedures for it to be used," said Rebecca Trexler, an FAA spokes woman. 'And a course there are privacy concerns."

The scanners, which penetrate hair and clothes to detect objects underneath, also outline the human figure in remarkable detail - imaging that is causing a stir from civil libertarians.

Intimate portrait

"It's an extremely intrusive technology and should only be used when there is good cause to suspect that person is a security risk;" said Jay Stanley, privacy coordinator at the American Civil Liberties Union. "This should not be used on all passengers. Passengers do expect privacy underneath their clothing. I don't think that they expect to have to undergo a strip search to get on a domestic flight - even if it is a virtual strip search."

Peter Williamson, Rapiscan's vice president, said "it's irresponsible not to use the technology. I believe the right of privacy is important. But I also believe that people have the right to get on a plane and know they are going to get off in one piece."

The technology, which also is being developed by American Science and Engineering Inc. of Billerica, Mass., has received good reviews from the U.S. Customs Service, which has spent $2 million on 17 body scanners from the two manufacturers for use at international airports and land-border ports.

"It's very, very effective in detecting objects hidden underneath a person's clothing or hair;' said James Michie, a public affairs officer for the Customs Service. "We're pleased with the results of these machines."

Last summer, a scanner detected 200,000 ecstasy tablets valued at $5 million taped to the body of a passenger who flew from France to Miami. Tubes of cocaine were recently discovered in the wig of a passenger who traveled from Jamaica to Miami.

The question is whether domestic fliers, who are used to less stringent security measures than international travelers, will tolerate such invasive exposure.

Should the scanners be purchased in mass, security officials viewing the computer monitors would likely be located in a separate room, or at least away from the gate entrance, FAA officials said. That way, they could not see the faces of the passengers being scanned and the body images could not be seen by the viewing public in line.

Williamson also is recommending that the FAA offer fliers a choice between the scanner or being frisked - the method now used for international passengers who come under suspicion by Customs officials. The agency mandates that scanning be performed in a private room by an operator of the same sex as the passenger, who must also sign a consent form before being scanned. Images that do not show contraband are destroyed immediately.

Of the 6,805 international passengers who were offered the choice between March 1999 and Sept. 19, 2001, only 784 opted to be scanned as opposed to a pat down, Customs records show.

But for Williams, the decision would be an easy one.

"Personally, if I have the choice between a 45-second groping of my body by a person that I do not know versus a 10- to 12-second non-intrusive scan, I will elect the scan every time;" he said.

Rapiscan acquired its technology and patent for its scanner in 1998 from now defunct San Diego-based Nicolet Imaging Systems Inc. for an undisclosed sum.

Extension at technology

The $115,000 device is about the size of a side-by-side refrigerator and freezer, standing 6 1/2 feet high and weighing 200 pounds.

Contraband can be detected in passengers standing adjacent to the scanner, which emits "back-scatter" X-rays that bounce off individuals and any dense objects in their possession, sending the impressions back through an electronic imaging component that creates the image on a computer monitor.

The technology is an extension of OSI's core business. The company, which employs 900 people worldwide, including 400 locally, began in 1987 as a Torrance-based optoelectronic components manufacturer. Its focus was on light-sensing silicon photodiode chips used in X-ray medical diagnostic machines. The company moved to Hawthorne two years later.

Manufacturing X-ray machines and metal detectors for airports, prisons, courthouses and other municipal buildings began in 1992 when OSI Systems acquired United Kingdom-based Rapiscan. That unit has 250 employs, including 75 locally.

The company reported net income of $410,000 for the first quarter ended Sept. 30, up from a net loss of $505,000 in the like year-earlier period. Company officials attributed the losses to expenses from patent litigation not related to the Rapiscan unit and a slowdown in sales of optoelectronics business.

First-quarter revenues were $26.5 million, a marginal increase from the $24.9 million in the same period last year.