American Science & Engineering [ASEI]
2Q13 2Q12
Sales $46.3M $54.8M
Net Inc. $6.4M, 0.76 $6.9M, 0.74
Net income fell 7 percent on a 16 percent decline in sales. Earnings per share were actually up as AS&E’s stock buyback program has reduced the number shares outstanding. Sales were down across almost all of the company’s product lines except cargo, which was up over 20 percent. In the quarter, cargo revenues were $11.6 million, up $2.4 million, Z Backscatter Systems were $9.4 million, down $8 million, Parcel was $2 million, down $1 million, and Field Service was $22.7 million, down $1.2 million, while contract research and development was $500,000, down $600,000. AS&E’s pipeline of opportunities remains strong, with more than 50 percent of that coming from repeat customers, says Anthony Fabiano, the company’s president and CEO. However, political and economic uncertainty in certain areas of the world, including the U.S., makes some of these opportunities less predictable than before, he says. Bookings in the quarter were $81.7 million, down from $93.5 million a year ago, but are 21 percent higher through the first six months of the fiscal year versus a year ago. Orders have been driven by demand for services, cargo screening equipment and personnel inspection systems, Fabiano says. The company booked eight ZBVs and shipped 13 in the quarter. Backlog at the end of the quarter was $222.7 million, up 5 percent from $211.2 million a year ago. Fabiano says the company has made progress in miniaturizing its backscatter X-Ray technology and has tested and demonstrated a prototype for a strategic customer. He believes the smaller technology offers the company “tremendous growth” potential given its lower price and ability to drive down costs.
OSI Systems [OSIS]
1Q13 1Q12
Sales $181.7M $161.3M
Net Inc. $6.3M, 0.31 $4.8M, 0.24
Net income increased 31% in the quarter to a record on a favorable sales mix at the Security Group, which is benefiting in part from higher margins at its turnkey screening service operation at Puerto Rican seaports, and strong margins at the Healthcare Group. Overall sales were up 13% to a record driven by double-digit gains at each of its three segments, led by Security, which was up 14% to $82.9 million. The Security segment benefited from supplying screening equipment for the London Olympics during the summer. Bookings were strong, north of a one-to-one ratio although OSI didn’t provide specifics, and helped drive a record backlog of nearly $1.1 billion, a 155% increase from $413 million a year ago. Security backlog was $943 million. Free cash was a $21 million outflow in the quarter due to continued investments in installing infrastructure and scanning systems for the Mexico turnkey screening services contract, which the company says is ahead of schedule and should begin accruing “significant” revenues in the second half of FY ’13. With a strong outlook for each of its businesses, OSI increased its financial guidance for the remainder of its fiscal year, with earnings per share expected to be between $2.77 and $3.00, up from $2.75 to $2.95, while sales are expected to be between $870 million to $895, up $5 million on the high end of the range from prior expectations. OSI is feeling more positive about securing additional turnkey security services projects with international customers, officials say. The company is in active discussions with several potential customers and there is a lot of world wide interest, the say. OSI expects to begin booking orders in the second half of the year for its Real Time Tomography explosive detection system although it doesn’t expect to begin recording revenues on those orders until FY ’14. Company officials also say their new handheld trace detection device should begin generating revenues in the second half of FY ’13. The overall market for trace detection is about $200 million. OSI says the device is meant to fill a gap in its security product line so that it can be bundled with other systems.