News Column

American Science and Engineering, Inc. Reports Results for Third Quarter Fiscal Year 2014

February 5, 2014

Company Declaring Quarterly Dividend of $0.50 per share New Customers Accounted for 36% of Bookings in Q3 38 ZBVs booked in the Quarter 700 booked to-date BILLERICA, Mass. , Feb. 4, 2014 (GLOBE NEWSWIRE) -- American Science and Engineering, Inc. (Nasdaq:ASEI) ("AS&E"), a leading worldwide supplier of innovative X-ray detection solutions, today reports its financial results for the third quarter of fiscal year 2014 ended December 31, 2013 . The Company is reporting revenues of $37.8 million as compared with revenues of $50.8 million for the third quarter of fiscal year 2013, net income of $1.6 million as compared with net income of $6.1 million for the third quarter of fiscal year 2013, and earnings per share of $0.20 as compared with earnings per share of $0.73 for the third quarter of fiscal year 2013. For the first nine months of fiscal year 2014 ended December 31, 2013 , the Company is reporting revenues of $124.7 million compared with revenues of $144.4 million for the same period in the prior fiscal year, net income of $11.2 million compared with net income of $16.7 million for the same period in the prior fiscal year, and earnings per share of $1.41 compared with earnings per share of $1.95 for the prior fiscal year. The Company is reporting $43.7 million in bookings for the third quarter of fiscal year 2014 and $119.4 million for the first nine months of fiscal year 2014. Backlog at December 31, 2013 was $180.9 million . Continuing with its dividend program started in August 2007 , the Company is declaring a quarterly cash dividend of $0.50 per share, payable on March 3, 2014 to the holders of record at the close of business on February 18, 2014 . "Quarterly results for revenue and EPS were negatively impacted by a sizable shipment that was delayed while in transit to the customer," said Chuck Dougherty , AS&E's President and Chief Executive Officer. "Absent this delay, revenues would have been consistent with previous quarters, as we continue to make excellent progress on our key growth initiatives. New customers accounted for 36% of our third quarter bookings with new clients added in the Middle East , the European Union , North America , and the Commonwealth of Independent States (CIS). Additionally, we continue to successfully execute on our solid ZBV pipeline in key geographic markets, with six new ZBV customers added and 38 ZBV systems booked in the quarter, including the largest single international ZBV booking in the Company's history." Chuck Dougherty , President and Chief Executive Officer, and Ken Galaznik , Senior Vice President, Chief Financial Officer and Treasurer, will host a conference call and simultaneous audio webcast on Wednesday, February 5, 2014 at 8:30 a.m. ET to discuss the results and respond to questions. To participate in the conference call, please dial 1-877-303-9143 at least 10 minutes prior to its starting time. For international participants, please dial 1-760-536-5194 . The conference identification number is 35133713 . You will be placed on hold until the conference call is ready to begin. The live audio webcast can be accessed through the investor relations section of the Company's website at http://ir.as-e.com/events.cfm . An audio replay of the teleconference will be available, in its entirety, starting Wednesday, February 5, 2014 at 11:30 a.m. ET for a one-week period by dialing 1-855-859-2056. Internationally, please dial 1-404-537-3406. The conference identification number is 35133713 . The replay will also be available through the Company's web site at http://ir.as-e.com/events.cfm . About AS&E American Science and Engineering, Inc. (AS&E) is the trusted global provider of threat and contraband detection solutions for ports, borders, military, critical infrastructure, law enforcement, and aviation. With over 50 years of experience, AS&E offers proven, advanced, X-ray inspection systems to combat terrorism, drug smuggling, illegal immigration and trade fraud. AS&E systems are designed in a variety of configurations for cargo and vehicle inspection , parcel inspection , and personnel screening . Using a combination of technologies, these systems provide superior detection capabilities, with high-energy, dual-energy, and Z Backscatter X-rays pioneered by AS&E. Learn more about AS&E products and technologies at www.as-e.com . Safe Harbor Statement : The foregoing press release contains statements concerning AS&E's financial performance, markets and business operations that may be considered "forward-looking" under applicable securities laws. AS&E wishes to caution readers of this press release that actual results might differ materially from those projected in any forward-looking statements. Factors which might cause actual results to differ materially from those projected in the forward-looking statements contained herein include the following: significant reductions, delays or cancellations (in full or in part) in procurements of the Company's systems by the United States and other governments; disruption in the supply of any source component incorporated into AS&E's products; litigation seeking to restrict the use of intellectual property used by the Company; limitations under certain laws on the Company's ability to protect its own intellectual property; potential product liability claims against the Company; global political trends and events which affect public perception of the threat presented by drugs, explosives and other contraband; global economic developments and the ability of governments and private organizations to fund purchases of the Company's products to address such threats; the potential insufficiency of Company resources, including human resources, capital, plant and equipment and management systems, to accommodate any future growth; technical problems and other delays that could impact new product development and the Company's ability to adapt to changes in technology and customer requirements; competitive pressures; lengthy sales cycles both in United States government procurement and procurement abroad; future delays in federal funding, the market price of the company's stock prevailing from time to time, the nature of other investment opportunities presented to the company from time to time, the company's cash flows from operations and market and general economic conditions. These and certain other factors which might cause actual results to differ materially from those projected are detailed from time to time in AS&E's periodic reports and registration statements filed with the Securities and Exchange Commission , which important factors are incorporated herein by reference. AS&E undertakes no obligation to update forward looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in future operating results, financial condition or business over time. Readers are further advised to review the "Risk Factors" set forth in the Company's most recent Form 10-Q and Form 10-K, which further detail and supplement the factors described in this Safe Harbor Statement. Among other disclosures, the Risk Factors disclose risks pertaining to that portion of the Company's business that is dependent on United States government contracting as well as international customers. AMERICAN SCIENCE AND ENGINEERING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) Quarter Ended Nine Months Ended December 31 , 2013 December 31 , 2012 December 31 , 2013 December 31 , 2012 Total net sales and contract revenues $ 37,773 $ 50,803 $ 124,673 $ 144,400 Total cost of sales and contract revenues 20,905 28,103 69,452 79,230 Gross profit 16,868 22,700 55,221 65,170 Expenses: Selling, general and administrative expenses 8,396 8,280 22,718 21,173 Research and development costs 6,139 5,242 15,725 18,862 Total operating expenses 14,535 13,522 38,443 40,035 Operating income 2,333 9,178 16,778 25,135 Interest and other, net 11 54 8 159 Income before provision for income taxes 2,344 9,232 16,786 25,294 Provision for income taxes 786 3,139 5,624 8,600 Net income $ 1,558 $ 6,093 $ 11,162 $ 16,694 Income per share - Basic $ 0.20 $ 0.74 $ 1.42 $ 1.97 Income per share - Diluted $ 0.20 $ 0.73 $ 1.41 $ 1.95 Weighted average shares - Basic 7,850 8,247 7,837 8,488 Weighted average shares - Diluted 7,889 8,307 7,873 8,542 The results of operations reported herein may not be indicative of future financial conditions or results of future operations. AMERICAN SCIENCE AND ENGINEERING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) December 31, 2013 March 31, 2013 Assets Current assets: Cash and cash equivalents $ 65,965 $ 40,418 Restricted cash and investments 14,753 12,618 Short-term investments, at fair value 86,428 108,546 Accounts receivable, net 22,591 28,477 Unbilled costs and fees 2,484 4,875 Inventories, net 50,144 48,051 Other current assets 9,101 11,984 Total current assets 251,466 254,969 Non-current assets: Building, equipment and leasehold improvements, net 13,972 16,451 Restricted cash and investments 397 899 Other assets 8,687 9,130 Total assets $ 274,522 $ 281,449 Liabilities & Stockholders' Equity Current liabilities: Accounts payable $ 8,913 $ 8,371 Customer deposits 33,131 16,199 Deferred revenue 11,410 15,770 Other current liabilities 19,884 28,148 Total current liabilities 73,338 68,488 Non-current liabilities: Lease financing liability 1,783 2,914 Other non-current liabilities 3,695 5,802 Total liabilities 78,816 77,204 Stockholders' equity 195,706 204,245 Total liabilities and stockholders' equity $ 274,522 $ 281,449 AMERICAN SCIENCE AND ENGINEERING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) For the Nine Months Ended December 31 , 2013 December 31 , 2012 Cash flows from operating activities: Net income $ 11,162 $ 16,694 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,942 3,821 Provisions for contracts, inventory and accounts receivable reserves 1,233 3,503 Amortization of bond premium 1,192 2,151 Deferred income taxes 1,894 152 Other -- (59) Stock compensation expense (credit) 1,527 (85) Changes in assets and liabilities: Accounts receivable 5,952 (14,907) Unbilled costs and fees 2,391 (859) Inventories (3,392) 453 Prepaid expenses and other assets 1,432 684 Accounts payable 542 (892) Accrued income taxes (2,094) 879 Customer deposits 16,932 9,580 Deferred revenue (6,472) 81 Accrued expenses and other liabilities (6,181) (296) Net cash provided by operating activities 30,060 20,900 Cash flows from investing activities: Purchases of short-term investments (47,805) (99,719) Proceeds from sales and maturities of short-term investments 68,755 150,514 Purchases of property and equipment, net (1,463) (2,500) Net cash provided by investing activities 19,487 48,295 Cash flows from financing activities: Increase in restricted cash and investments (1,633) (1,384) Proceeds from exercise of stock options 2,889 1,079 Repurchase of shares of common stock (12,306) (45,347) Repayment of leasehold financing liability (1,115) (1,003) Payment of common stock dividend (11,749) (12,760) Reduction of income taxes paid due to the tax benefit from employee stock option exercises (86) -- Net cash used for financing activities (24,000) (59,415) Net increase in cash and cash equivalents 25,547 9,780 Cash and cash equivalents at beginning of period 40,418 24,369 Cash and cash equivalents at end of period $ 65,965 $ 34,149 CONTACT: Investor Relations Contact: Annemarie Sadowski American Science and Engineering, Inc. asadowski@as-e.com 978-262-8828 Public Relations Contact: Dana Harris Red Javelin Communications, Inc. dana@redjavelin.com 978-440-8392 Laura Berman American Science and Engineering, Inc. lberman@as-e.com 978-262-8713 Source: American Science and Engineering, Inc.


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