mrnhtbr2232
13th March 2011, 04:37 PM
OSI, Incorporated (NASDAQ GS: OSIS), the parent company of Rapiscan that supplies the TSA with Millimeter Wave Backscatter X-ray systems, is apparently doing quite well as a result of their ties to contracts with the US Government. Friday's close of $37.54 marks a trendline that has seen the stock value increase from $10 in the middle of 2008 to a recent high of $40. On their Q1 2011 earnings call, Alan Edrick, CFO, outlines "highlights for our first quarter of fiscal 2011 are as follows. First, Q1 bookings of $196 million were outstanding, shattering our previous record of $175 million. This led to a record backlog of $308 million, a 28 percent increase from the June backlog of $240 million, which in and of itself was a record. Leading the growth was our Security Division, Rapiscan, which posted a Q1 book to bill ratio of 2.2, resulting in a new record Security backlog of $205 million. Although a small portion of the growth in backlog was driven by the push out of deliveries based upon customer requests which impacted Q1 sales, the vast majority of the growth was driven by very strong U.S. Security bookings."
He then turns the call over to Deepak Chopra, who continues: "Thank you Alan. And again, good morning and welcome to the OSI System earnings conference call for the first quarter of fiscal 2011. We are very excited to see the tremendous demand in the marketplace for our products. The strong bookings during the quarter resulted in ending backlog of $308 million which is a company record. I would like to spend some time focusing on the highlights for the quarter, and discussing each of our businesses. Let’s start with our Security Division, Rapiscan, where bookings increased 46 percent to $112 million, a new record. The Security backlog was $205 million at the end of the quarter, approximately 41 percent higher when compared with the first quarter of the prior year. Our sales were up eight percent in Q1, and would have been higher if not for the timing of a few shipments where customers pushed out the delivery date to Q2.
In September, we received the largest indefinite delivery, indefinite quantity order in Rapiscan’s history when we were awarded a $325 million contract by the U.S. Transportation Security Administration for the Rapiscan 620 Dual View advanced technology check point X-ray baggage inspection system. We already received a $35 million purchase order from the TSA under the terms of this five year IDIQ. We anticipate additional orders in the future as the TSA continues the replacement of the present check point systems. In addition, we received a major award to provide inspection systems that protect borders, travelers and critical infrastructure. These wins are from government and commercial customers from a variety of geographic regions. We also gained several new customers both domestic and international for our Eagle Mobile High Energy X-ray cargo and vehicle inspection systems, which can identify the presence of weapons, explosives and narcotics. The Eagle series is a road mobile inspections system that can be quickly deployed in minutes at a port, check point or border crossing and allows the customer the flexibility to optimize the system’s usage and re-locate it to another area of likely threat.
We anticipate further growth in the cargo market segment with our Eagle product line for cargo and vehicle inspection products as we have set the industry standard for detection excellence through put, and reliability. Our Secure 1000 single port system, the world’s most widely deployed advanced people screening, body scanner solution, continues to be installed in new locations. Most notably, during the past quarter, Secure 1000 systems were installed at the Los Angeles International and Chicago O’Hare, some of the world’s busiest airports. As a background, in fiscal 2010, the TSA awarded Rapiscan a $173 million IDIQ contract to provide advanced imaging technology AID Systems, such as the Secure 1000. Because of Secure 1000’s superior imaging capabilities, we are also receiving strong interest from non-aviation customers. We have developed the Secure 1000 man portable, a ruggedized model that was developed specifically for applications that require rapid deployment, mobility and durability as well as superior threat detection. The Secure MP is an ideal portable solution for military, police, corrections, event security and protection of critical infrastructure to detect concealed threats and contraband items. We own a lot of IP intellectual property in this product line.
In the Screening Services segment, the construction phase has begun by the Port of San Juan, Puerto Rico for this project. As you know, in fiscal 2010, we received a ten year cargo scanning services contract with the Port of Puerto Rico Port Authority. We anticipate that the operation will start for this contract towards the latter part of this quarter as construction activity has commenced at the port to ready the sites for screening. Our equipment has started arriving in Puerto Rico. We continue to see strong interest in the marketplace for a turnkey approach to meet screening needs. Our broad portfolio of screening platforms makes us an ideal partner for customers that have diversified screening requirements and seek a full service solution.
A key to success in the programs mentioned above, have been our relentless focus on R&D and working closely with our customers to develop versatile solutions to address the evolving threats to public safety. Because of our strong capabilities in research, during the quarter, we were awarded a multi-year contract valued at up to $12 million if all options are exercised by the Domestic Nuclear Detection Office to develop advanced methods to detect nuclear materials. In addition to an established security customer base in the U.S., Europe and Latin America, we continue to gain new customers in Eastern Europe, India, Middle East and Africa for our advanced personal screening check point and cargo solutions. Our quotation activity has never been as strong as today. After the quarter ended, in early October, we also announced the High Energy Mobile Cargo order from Customs and Border Control for approximately $24 million."
(Complete transcript found here: http://seekingalpha.com/article/232431-osi-systems-ceo-discusses-f1q2011-results-earnings-call-transcript?source=marketwatch).
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mrnhtbr2232 comments:
It is important to remember that the security industry is profit driven, and that the proliferation of scanners in our nation's airports and around the globe are not an act of caring public servants as they would have you believe. On the contrary, the industry itself is sterile to its role in eroding individual liberties and focused on a close association with the US government. The TSA, in turn, is more than happy to play the game where it gets OSI/Rapiscan technical and logistical support for intrusive solutions looking for problems. Former Homeland Security Sect. Michael Chertoff left public service right about when OSI's bottom line went north in early 2009. From then on both the profits and the resulting use of these systems have spiked. This is an obvious and documented example of why the security theater that plays out around us is to mask the corruption of our institutions, and why the TSA is an enabler of tyranny for the benefit of the war on terror and its manufacturers. It's right here in the public record for anyone willing to investigate.
He then turns the call over to Deepak Chopra, who continues: "Thank you Alan. And again, good morning and welcome to the OSI System earnings conference call for the first quarter of fiscal 2011. We are very excited to see the tremendous demand in the marketplace for our products. The strong bookings during the quarter resulted in ending backlog of $308 million which is a company record. I would like to spend some time focusing on the highlights for the quarter, and discussing each of our businesses. Let’s start with our Security Division, Rapiscan, where bookings increased 46 percent to $112 million, a new record. The Security backlog was $205 million at the end of the quarter, approximately 41 percent higher when compared with the first quarter of the prior year. Our sales were up eight percent in Q1, and would have been higher if not for the timing of a few shipments where customers pushed out the delivery date to Q2.
In September, we received the largest indefinite delivery, indefinite quantity order in Rapiscan’s history when we were awarded a $325 million contract by the U.S. Transportation Security Administration for the Rapiscan 620 Dual View advanced technology check point X-ray baggage inspection system. We already received a $35 million purchase order from the TSA under the terms of this five year IDIQ. We anticipate additional orders in the future as the TSA continues the replacement of the present check point systems. In addition, we received a major award to provide inspection systems that protect borders, travelers and critical infrastructure. These wins are from government and commercial customers from a variety of geographic regions. We also gained several new customers both domestic and international for our Eagle Mobile High Energy X-ray cargo and vehicle inspection systems, which can identify the presence of weapons, explosives and narcotics. The Eagle series is a road mobile inspections system that can be quickly deployed in minutes at a port, check point or border crossing and allows the customer the flexibility to optimize the system’s usage and re-locate it to another area of likely threat.
We anticipate further growth in the cargo market segment with our Eagle product line for cargo and vehicle inspection products as we have set the industry standard for detection excellence through put, and reliability. Our Secure 1000 single port system, the world’s most widely deployed advanced people screening, body scanner solution, continues to be installed in new locations. Most notably, during the past quarter, Secure 1000 systems were installed at the Los Angeles International and Chicago O’Hare, some of the world’s busiest airports. As a background, in fiscal 2010, the TSA awarded Rapiscan a $173 million IDIQ contract to provide advanced imaging technology AID Systems, such as the Secure 1000. Because of Secure 1000’s superior imaging capabilities, we are also receiving strong interest from non-aviation customers. We have developed the Secure 1000 man portable, a ruggedized model that was developed specifically for applications that require rapid deployment, mobility and durability as well as superior threat detection. The Secure MP is an ideal portable solution for military, police, corrections, event security and protection of critical infrastructure to detect concealed threats and contraband items. We own a lot of IP intellectual property in this product line.
In the Screening Services segment, the construction phase has begun by the Port of San Juan, Puerto Rico for this project. As you know, in fiscal 2010, we received a ten year cargo scanning services contract with the Port of Puerto Rico Port Authority. We anticipate that the operation will start for this contract towards the latter part of this quarter as construction activity has commenced at the port to ready the sites for screening. Our equipment has started arriving in Puerto Rico. We continue to see strong interest in the marketplace for a turnkey approach to meet screening needs. Our broad portfolio of screening platforms makes us an ideal partner for customers that have diversified screening requirements and seek a full service solution.
A key to success in the programs mentioned above, have been our relentless focus on R&D and working closely with our customers to develop versatile solutions to address the evolving threats to public safety. Because of our strong capabilities in research, during the quarter, we were awarded a multi-year contract valued at up to $12 million if all options are exercised by the Domestic Nuclear Detection Office to develop advanced methods to detect nuclear materials. In addition to an established security customer base in the U.S., Europe and Latin America, we continue to gain new customers in Eastern Europe, India, Middle East and Africa for our advanced personal screening check point and cargo solutions. Our quotation activity has never been as strong as today. After the quarter ended, in early October, we also announced the High Energy Mobile Cargo order from Customs and Border Control for approximately $24 million."
(Complete transcript found here: http://seekingalpha.com/article/232431-osi-systems-ceo-discusses-f1q2011-results-earnings-call-transcript?source=marketwatch).
----------------------
mrnhtbr2232 comments:
It is important to remember that the security industry is profit driven, and that the proliferation of scanners in our nation's airports and around the globe are not an act of caring public servants as they would have you believe. On the contrary, the industry itself is sterile to its role in eroding individual liberties and focused on a close association with the US government. The TSA, in turn, is more than happy to play the game where it gets OSI/Rapiscan technical and logistical support for intrusive solutions looking for problems. Former Homeland Security Sect. Michael Chertoff left public service right about when OSI's bottom line went north in early 2009. From then on both the profits and the resulting use of these systems have spiked. This is an obvious and documented example of why the security theater that plays out around us is to mask the corruption of our institutions, and why the TSA is an enabler of tyranny for the benefit of the war on terror and its manufacturers. It's right here in the public record for anyone willing to investigate.