OSI Gets Australian Navy Contract

Offshore Systems International Ltd. (OSI) announced that its teaming partner, Nautronix Ltd., has signed the final prime contract to supply the Royal Australian Navy with a fleet installation of OSI's ECPINS-MTM electronic chart navigation system. "We announced our selection by the Royal Australian Navy this past July, and we are pleased that the complex technical evaluations and prime contract negotiations are now fully complete," said John Jacobson, President and CEO of OSI.

"This procurement further expands our track record in the naval market, and it will significantly improve the Royal Australian Navy's ability to operate jointly with NATO-member navies. We would like to thank our Australia-based partners, Nautronix Ltd. and Scientific Management Associates, for their efforts and guidance in bringing the selection and contract process to a successful conclusion."

The total contract value to OSI Navigation Systems is approximately CDN$8 million and the contract is organized into two phases:

- The initial phase, representing approximately CDN$4.5 million in revenue to OSI, includes delivery of software licenses and some hardware installations beginning in September 2004. Management expects this revenue to be realized during the next 12-18 months;

- The second phase, representing approximately CDN$3.5 million in revenue to OSI, includes delivery of further hardware, training and the support services necessary for additional installations of the first phase software. The timing and scope of these deliveries is at the option of the Royal Australian Navy, however management of OSI is optimistic that this additional revenue can begin to be realized some 24 months after contract signing.