OSI Geospatial Inc.
OTC Bulletin Board : OSIIF

OSI Geospatial Inc.

December 19, 2006 08:01 ET

OSI Geospatial Achieves 2006 Strategic Objectives and Announces New Goals for 2007

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 18, 2006) - OSI Geospatial Inc. (TSX:OSI)(OTCBB:OSIIF) announced today that it has achieved all of its fiscal 2006 strategic objectives. Additionally, the company has provided its new strategic objectives for fiscal 2007.

Highlights for 2006 include:

- Revenue to increase from US$11.1 million in 2005 to approximately US$24 million in 2006.

- Net earnings to increase from a loss of US$2.7 million in 2005 to positive net earnings in 2006.

- Demonstrated market development in its existing customer base by securing a significant prime contract from the U.K. Royal Navy: Signed a US$29 million contract with the U.K. Ministry of Defence for the delivery of Warship-Automatic Identification Systems.

- Demonstrated U.S. market penetration by winning a significant U.S. Navy contract: Signed a contract with L-3 Communications for the delivery of its Common Operational Picture (COP) product for the U.S. Navy's DDG 1000 new build destroyer program.

- Expanded customer base by securing new customers in each of the three defense domains, air, land and sea: Announced contracts with the U.S. Office of the Naval Research (sea), Royal Norwegian Navy (sea), U.S. Air Force Command and Control Battle Lab (air) and U.S. Defense Threat Reduction Agency (land).

- Accelerated U.S. and international market penetration by signing a teaming agreement with a top-tier defense contractor: Signed a teaming agreement with L3 Communications to pursue opportunities in the worldwide naval market.

- Diversified into new market sectors by leveraging core technology in the development of new products: Received certification for the commercial shipping market S-VDR product and secured its first customer; signed a contract with the U.S. Defense Threat Reduction Agency to develop a GPS denied handheld personal navigation product for military and homeland defense markets; and was awarded a prime contract with the U.K. Royal Navy to develop a Warship-Automatic Identification System that provides enhanced situational awareness and increased surveillance capability.

"We established and communicated clear objectives for 2006, and I am pleased to report that we have achieved all of them," said Ken Kirkpatrick, President and CEO of OSI Geospatial. "Fiscal 2006 was a very positive year for our company, as we successfully closed on more than US$56 million in new business and completed the integration of our U.S. acquisition. We remain focused on the execution of our growth strategy and we will continue to deliver on our commitments."

The company has established the following goals for fiscal 2007:

1. Achieve revenue in the range of US$28 million to US$32 million, with positive net earnings;

2. Secure a significant U.S. Department of Defense and U.K. Ministry of Defence prime contract;

3. Continue to expand the company's customer base by securing new customers in each of the three defense domains: air, land, and sea;

4. Continue to diversify into new market sectors by leveraging the company's core technology in the development of new products; and

5. Establish the company as a creditable supplier in the global national security / homeland defense market.

"The U.S. and U.K. defense and homeland security markets are critical to our growth strategy. We have made excellent progress in developing these markets in 2006 and we are well positioned to build on this in 2007," continued Mr. Kirkpatrick. "We have established a pattern of setting objectives and delivering on them. I am confident that we will achieve all of our goals in 2007."

About OSI Geospatial

OSI Geospatial Inc. delivers advanced systems and software to address the growing need for enhanced situational awareness in command, control, communications, and intelligence applications. By providing essential tactical and geospatial information, the company's systems and software help decision-makers know the precise location of mission operations across all military forces while integrating information with allies. OSI Geospatial systems are in use by military, government, and commercial customers around the world. The company is publicly traded on the Toronto Stock Exchange (OSI) and the Over the Counter Bulletin Board (OSIIF). For additional information please visit www.osigeospatial.com.

Forward-Looking Statements

Certain statements made in this news release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and Section 138.4(9) of the Ontario Securities Act. These forward-looking statements are subject to risks and uncertainties. Actual results may differ from these projections. The risks associated with the Company's business include risks related to its reliance on international government contracts; the number of large customer transactions and the related lengthy sales cycles in executing those opportunities; uncertainties associated with competitive bidding processes and contract negotiations; actions by government authorities; the effects of general economic and political conditions; changing foreign exchange rates; and challenges related to the company's ability to introduce, develop and implement new products and enhancements to existing products that respond to customer requirements in a changing, complex, technological market. A complete discussion of the company's risk factors is presented in the company's most recent annual reports, filed with the United States Securities and Exchange Commission ("SEC") and the Canadian Securities Administrators ("CSA"), as well as other periodic reports filed with the SEC and the CSA. The Company does not undertake any obligation to update the forward-looking statements.

Copyright (C) 2006 OSI Geospatial Inc. and its affiliated or related companies. ECPINS and COP-IDS are registered trademarks of Offshore Systems Ltd., an OSI Geospatial company. Other company brand, product and service names are for identification purposes only and may be either trademarks, service marks or registered trademarks of their respective owners. Data subject to change without notice.

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