Company Strategy and Sector Heat
VIVID TECHNOLOGIES
Stock Ticker: VVID
Address:10 East Commerce Way
Woburn, MA 01801
Tel:781-938-7800
Fax:781-939-3996
Website:http://www.vividusa.com
We lead off the new year with VVID. The company fundamentals are very good and the timeliness could not be better. Under new domestic flight measures adopted by the Federal Aviation Administration and put into effect New Year's Day, the baggage of passengers who fit a certain security risk profile may be checked for explosives. Significant security improvements including the continuing installation of explosives detection devices at many airports and the use of explosives trace detection equipment at security checkpoints are also part of the new directives. Bradley International in Hartford, Ct. is the first airport in the country to tighten up security measures under the new FAA directive dated Dec.23, 1997. Specifics regarding the upgrades will not be revealed for security reasons. It is a reasonable assumption to expect Vivid Technologies to obtain additional business from the FAA as well as directly from the airlines as is the case in the recently announced contract with JFK International Airport.
faa.gov
In November 1997, the Company received an order for seven Model APS systems for the new Terminal One at JFK International Airport in New York. This will be the first terminal in the world to screen all carry-on baggage for explosives. This contract is specially significant because it is the first airport security contract in the U.S. not funded by the FAA.
biz.yahoo.com
The JFK contract combined with new FAA requirements have provided VVID new potential business in airports across the US. Up to this time the company has conducted most of its business overseas. In the first six months of fiscal 1997, 100% of revenues were generated internationally, approximately 70% in Europe, and 30% in Asia.
VVID presents a compelling picture:
* New US Airport business will provide steady income revenue.
* The company has been receiving important contracts internationally, demonstrating its ability to find new customers and receiving repeat business from existing customers.
* The company has very favorable analyst coverage and strong earning projections.
* Royalty fees VVID pays have been reduced as per contract arrangement, improving the bottom line.
* It has settled a major litigation case with a competitor.
* Strong Insider and Institutional ownership.
* VVID's products can be used outside of the aviation market and the potential for increased demand in other applications is huge.
The share price seems to have been held back due to:
1. Insider selling by James Aldo, a VP, during Sept.
2. Weakness in the sector after the run-up during the summer.
3. Lengthy product introduction process for new customers.
Some basic numbers:
Total shares = 9.42 million and float is 2.3 million
P.E. is 21 compared to the industry avg.of 52
(projected PE based on '98 earning estimates is 15)
Avg. daily volume is over 90k
ROE 30%
ROA 22%
Profit margin 18%
Recent Co. developments:
In 1997 the Company introduced the Model APS, a freestanding system to screen carry-on baggage for explosives and weapons. The Model APS can also be used in the non-aviation market to screen baggage at public, private and government facilities. The first unit was sold in June 1997 to the Public Intelligence Department in Riyadh, Saudi Arabia for the protection of VIP's.
10/30/97 Vivid Technologies's 4th qtr results: Revs (mils) from $5.41 to $9.77 up 80.5%. Net Income (mils) from $0.11 to $2.03 up 1,682.5%. EPS from $0.01 to $0.20 up 1,900%. The earnings for this quarter were above Wall Street Analysts' consensus estimate of 0.19.
09/08/97 Vivid Technologies said it received an order valued at more than $1 million for four of its Model VDS II explosives detection systems from British Airways PLC.
08/11/97 The Federal Aviation Administration awarded Vivid Technologies with a contract to supply eight automated dual energy X-ray explosives-detection systems with the option for 12 additional systems. The contract could be worth as much as $10.7 million.
08/11/97 Vivid Technologies said the FAA has placed a $4 million purchase order for the company's automated dual energy x-ray explosives detection systems, with a total maximum contract value of $10.7 million.
07/29/97 Vivid Technologies's 3rd qtr results: Revs (mils) from $3.92 to $8.31 up 111.8%. Net Income (mils) from $0.41 to $1.72 up 320%. EPS from $0.05 to $0.17 up 240%. The earnings for this quarter were equal to Wall Street Analysts' consensus estimate of 0.17.04/23/97VVID's 2nd qtr results: Revs (mils) from $3.22 to $7.76 up 140.6%. Net Income (mils) from $0.34 to $1.31 up 283.6%. EPS from $0.05 to $0.13 up 160%.
( BW)(PROFILE/VIVID-TECH)(VVID) Corporate Profile for Vivid Technologies Inc.
dated Nov. 7, 1997
(URL) www.vividusa.com
Chief Executive Officer: S. David Ellenbogen
Chief Financial Officer: Bill Frain
Industry: Security Equipment Manufacturer
Market Makers: Lehman Brothers, Cowen Co., Needham Company, Pacific Growth Equities, Herzog, Heine, Geduld Inc., Troster Singer Corp., Knight Securities, John G. Kinnard Co., Mayer Schweitzer Inc., Donald Co. Securities and Sherwood Securities Corp.
Company description: Vivid Technologies Inc. is the leading developer and manufacturer of automated inspection systems that detect plastic and other explosives. Vivid's family of advanced explosives detection systems can be used to screen checked and carry-on luggage in an airport application and to enhance building security by screening bags and parcels. Vivid's systems identify targeted materials by analyzing the physical characteristics of each item in a bag, including the atomic number and mass, using patented composition analysis techniques and proprietary dual-energy X-ray technology. These systems automatically (without the use of an operator) isolate and identify targeted materials within a bag, thereby preventing a suspect bag from being loaded into an aircraft or entering a building until cleared by operator inspection. Vivid's systems can also be used to identify drugs and currency. Vivid's systems have been selected for use at numerous airports around the world including London's Heathrow and Gatwick Airports, Paris' Charles de Gaulle and Orly Airports, Kuala Lumpur International Airport in Malaysia, Chek Lap Kok Airport in Hong Kong, Brussels in Belgium, Amsterdam Schiphol and several airports in the United States. For the fiscal year ended Sept. 30, 1997, Vivid posted total sales of $31,702,188 and net income of $5,865,578 or $.60 per share. |
