Applied Energetics' Marines Order Is Step to Laser, Chief Says
By Edmond Lococo
June 10 (Bloomberg) -- Applied Energetics Inc.'s effort to build a laser that can stop cars and disable roadside bombs may get a lift from a U.S. Marine Corps order last week for a simpler electronic weapon that will soon be tested in combat.
The system the Marines ordered last week under a $9.3 million contract is a ``relatively straightforward'' combination of electronic boxes and hydraulic and mechanical gear that uses high-voltage electricity to disrupt bombs, Dana Marshall, chief executive officer of Applied Energetics, said in an interview. That system doesn't use any laser optics, he said, declining to provide more information about the design, which is classified.
The Tucson, Arizona-based defense contractor, which has reported losses every year since it was formed in 2002, has been working since 2004 on the system to defeat the roadside bombs that are the leading cause of U.S. casualties in Iraq. Developing a laser-guided version of the system is still several years down the road, Marshall said.
``It's a long-term home-run opportunity for the company,'' Marshall, 49, said of the laser-guided weapon. The Marine Corps program will help the company test and prove the usefulness of high-voltage power in protecting against so-called improvised explosive devices and ``it also gets the customer comfortable that electricity can be useful to them,'' he said.
The Marine Corps order was for 10 systems for an ``overseas operational assessment,'' the Defense Department said in a statement. Marshall said the company may need to find a larger defense contractor to assist with providing field service and support. He declined to identify potential partners.
Marine Corps Test
If the system works for the Marine Corps, it could be potentially be attached to a fleet of as many as 2,900 mine rollers for a cost of about $250,000 each, said Chris Donaghey, an Atlanta-based analyst with SunTrust Robinson Humphrey who rates the shares ``buy.'' SunTrust has done investment banking work for the company and buys and sells its shares for clients.
``This is the right first step,'' Donaghey said. ``It gets an energy-based system in the field. If it works, that's going to open the door for laser-guided energy applications.''
Applied Energetics reported sales of $12.4 million last year. The company has lost about half its market value in the past year. Its shares rose 2 cents to $2.20 at 9:51 a.m. in Nasdaq Stock Market trading.
Marshall, who began his defense industry career with General Dynamics Corp. in 1982, joined Applied Energetics in 2006 from Zygo Corp., where he was vice president of optical systems. |
