American Science & Engineering

American Science and Engineering, Inc. supplies innovative X-ray inspection systems. With 50 years of experience in developing advanced X-ray security systems, the company’s product line utilizes a combination of technologies, including patented Z Backscatter technology, Radioactive Threat Detection (RTD), high energy transmission and dual energy transmission X-ray.

The company’s complete range of products include cargo inspection systems for port and border security, baggage screening systems for facility and aviation security, and personnel and passenger screening systems.

ASEI’s systems protect high-threat facilities and help combat terrorism and trade fraud, drug smuggling, weapon smuggling, and illegal immigration and people smuggling.

The company’s customers include leading government agencies, border authorities, military bases, airports and corporations worldwide, including the U.S. Department of Homeland Security (DHS), U.S. Department of Defense (DoD), U.S. Customs and Border Protection (CBP), North Atlantic Treaty Organization (NATO), HM Revenue & Customs (U.K.), Hong Kong Customs, and Abu Dhabi Customs

Recent Events

In mid-December, American Science and Engineering announced that it received a $2.8 million order from a Middle Eastern government for multiple Z Backscatter Vans™ (ZBV™). The ZBV’s are configured for harsh environments and will be used for counterterrorism applications including securing government facilities and mobile checkpoints.

“AS&E continues to increase its ZBV installed base in the Middle East,” said Anthony R. Fabiano, President and CEO. “With the ZBV’s exceptional versatility and explosives detection capability, it remains an ideal tool for this Middle East Government’s crucial mission to protect their high-threat facilities. Its varied operating modes provide maximum maneuverability and flexibility for multiple applications, including urban surveillance and checkpoint security.”

Share are Climbing on Record Results

The company posted strong second-quarter results in early November. Earnings per share of 83 cents soared past the year-prior 48 cents and topped the consensus estimate by 15%. Revenues reached a record $56.3 million, well above last year’s $37.6 million.

The company noted that it saw $93.5 million in bookings for the second quarter, compared to $55.6 million in the year-ago quarter, adding that backlog at September 30, 2008 increased 61% year-over-year to a record $197 million as compared to the prior year.

“We are very pleased with our financial and operating results for the second quarter,” said Anthony Fabiano, AS&E’s President and CEO. “Revenue growth was outstanding at 50% with increased revenues across all primary business areas. Our continued focus on strategic priorities has driven growth and improved operating income, resulting in a 63% increase in net income and greatly improved earnings per share.”

While ASEI was trading more or less in line with the broader market prior to reporting second-quarter results, its share price soared well above the major averages afterward. During 2008, the company saw a gain of 36% as many stocks languished and the major averages were in the red by more than 30%.

Solid Income

American Science & Engineering declared a quarterly dividend of 20 cents per share, which was paid out on December 4.

The company’s dividend yield of 1.1% is a competitive one within the industry as most of ASEI’s industry peers pay no dividend.

Higher Estimates

Analysts have earnings forecasts pegged at $3.18 per share for the fiscal year ending March 2009. Two months ago, analysts were projecting $2.93.