Knobias Clip Report (08-20-2008) IMX
Submitted By Knobias ClipReport
IMX: CEO Discusses Focus on Homeland Security and Growth Opportunities
By Fain Hughes, fhughes@knobias.com
Implant Sciences Corporation (IMX), which has seen a recent uptick in its share price, develops, manufactures and sells sophisticated sensors and systems for the Security, Safety and Defense (SS&D) industries. The Company has developed proprietary technologies used in its commercial portable and bench-top explosive trace detection systems. The Company has evolved from a a contracting engineering firm and has since begun to focus solely on the homeland security arena.
In July, the Company agreed to the sale of certain assets used in the production of coating medical products and its brachytherapy products business for $1.15 million.
Phillip C. Thomas, President and CEO of Implant Sciences, told Knobias on Tuesday, “We expect the divesture of the remaining assets to be complete by the end of this calendar year. We will use the proceeds from the sale of these non-core assets to fund the continued growth and development of the product line in the homeland security area. We aren’t selling everything obviously. In contrast, we recently announced the acquisition of a small San Diego company (Ion Metrics) that has several key building blocks for our future use in the explosive detection arena.”
Mr. Thomas explained, “The security industry has become a mainstay in today’s society. The cost of being free of worries from terrorist action is one the government has spared no expense and when compared to the alternative, is easily termed a bargain. From taking the war to their turf to increased security regulations and personnel in airports and harbors, security measures being put in place have kept those of us at home safe from deadly attacks.”
He added, “While America has attempted to shore up her borders, other countries are following suit. China is under a large magnifying glass with the Olympic Games currently underway. Israel has constantly been under scrutiny in the volatile Middle East region. Europe has also attempted to decrease the probability of attack even with their close proximity to terrorist nations. The bulk of our business comes from the international sector and we expect that to continue in the short term. On the other hand, we’ve continued to work with the Department of Homeland Security, the Transportation Security Administration, Customs and Border Protection, and other agencies to develop new products for their needs in the U.S.”
The Company’s main product line is the Quantum Sniffer which is available in a portable version (QS-H150) and the bench top variety (QS-B200). The core technology includes the measurement of ions in the air and their time of flight which will give their molecular composition. Explosive substances have a unique profile which the Quantum Sniffer technology uses to identify the presence of a threat. Most significantly, it can do this without physical contact and in real-time.
In fiscal 2008, unit sales of the Company’s Quantum Sniffer security systems more than doubled fiscal 2007 unit sales. Revenue from the Company’s Quantum Sniffer security systems, excluding revenue generated in the performance of government contracts, also more than doubled fiscal 2007 revenue. The Company began fiscal 2009 with a backlog of unshipped security system orders nearly equaling the total number of units shipped in FY 2008.
Mr. Thomas concluded, “We see substantial new market opportunities in front of us. We’ve seen studies that put the world market for explosives trace detection systems as high as 25% compound annual growth rate with a base market more than doubling to over $650 million per year over the next 5 years. Our technical capabilities should allow us to participate in six key detection areas of the future: handheld, benchtop, package scanners, air cargo inspection, people in motion, and vehicle checkpoints. In the past year, we have significantly expanded our servable geographies, introduced a key new product, and made considerable progress on our product roadmap. As a result, we believe the Company is well positioned for continued growth.”
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