American Science and Engineering [ASEI]
4Q16 4Q15 FY ’16 FY ‘15
Sales $24.2M $31.2M $103M $126.8M
Net Inc. ($2.7M, 0.38) $877K, 0.12 ($3.2M, 0.45) $979K, 0.13
Sales in the quarter fell 22% on declines in cargo and mobile cargo inspection systems, and in service revenues, which were partially offset by increases in parcel and personnel inspection systems. The company swung to a loss on a $1.3 million charge related to cost cutting actions, and for charges to write-off inventory for a project with a legacy customer in Eastern Europe that was abandoned in the quarter. Bookings for the year were up 35% to $121 million and backlog at year-end stood at $154.1 million, up 11% from a year ago, and the pipeline of opportunities is growing, leading AS&E president and CEO Chuck Dougherty to say the company is “well positioned for top line growth and a return to profitability as we enter fiscal year 2017.” The positive outlook, albeit general, prompted Benchmark Company security analyst Josephine Millward to upgrade her rating on the company’s stock to a buy. Cost containment actions that trimmed $3.1 million from the bottom line for the year are complete, he says. Dougherty adds that the proliferation of terrorist threats continues to drive the business pipeline, which is stabilizing. He also says the outlook is more stable as countries in the Middle East are setting budgets around $30 to $40 per barrel of oil instead of $80 to $100. “Knowing that active projects are based on current fiscal budgets will help us to forecast more accurately and plant more effectively,” he says. He also says that U.S. Customs and Border Protection is initiating a technology refresh that could lead to additional business. Free cash flow was a $4 million outflow in the quarter but a positive $6.8 million for the year following a $13.7 million outflow a year ago. Revenue breakout by category was $14.3 million for field service, $6.1 million for mobile cargo systems, $1.9 million for parcel and personnel, $1.3 million for cargo systems, and $600,000 for other.
Implant Sciences [IMSC]
3Q16 3Q15
Sales $10.9M $3.3M
Net Inc. ($4.1M, 0.05) ($5.7M, 0.08)
Losses narrowed on improvements in operations, including lower research and development expenses due to efficiency gains and lower stock-based compensation expense, and dramatically higher sales, partially offset by costs related to the company’s ongoing strategic review of alternatives and other one-time charges. Sales increased mainly due to increased shipments of QS-B220 desktop explosives trace detectors to the Transportation Security Administration (TSA), as well as shipments to the Canadian Air Transport Security Authority (CATSA) and to Asia. The higher shipments were partially offset by a 39% decline in the average unit sales prices of the QS-B220s. Implant delivered 9,343 QS-B220s in the quarter versus 1,989 a year ago. William McGann, Implant’s CEO, says that QS-B220 deliveries to TSA “are ongoing and on schedule” and that the company is “demonstrating our capabilities from not only a manufacturing and supply chain perspective, but also from a working capital management perspective.” Not everything is perfect and the process is ongoing, he says, but the company is making improvements and is generating the internal cash flow to fund its working capital requirements. McGann says the company isn’t threatened by Smiths Detection’s planned acquisition of another rival in the ETD space, Morpho Detection, saying that the deal eliminates a competitor even though Smiths will be larger as a result. He also says that while there were early problems with the use of the B220 for some of the European deployments in the past year, much of which had to due with “aggressive” sampling of people, the outcome has been enhancements to the system that have improved its capabilities. He also says that work has not begun on a two-year, $2 million development contract with DHS for a trace detection system that monitors travelers as they pass through the checkpoint but that work will begin in weeks and contribute to results in the next fiscal year. Work on a new handheld ETD system has also stalled due to the diversion of staff to help with the steep production ramp this year but the system is expected to enter pilot production in the second quarter of FY ’17.