ICXT Icx Technology (MM)

ICx Technologies, Inc. (Nasdaq GM: ICXT), a developer of advanced sensor technologies for homeland security, force protection and commercial applications, announced today its operating and financial results for the first quarter ended March 31, 2010.

First-Quarter Financials

For the quarter ended Mar. 31, 2010, ICx reported revenues of $40.6 million, compared to $47.4 million for the quarter ended Mar. 31, 2009, representing a 14 percent decrease year-over-year. The Company showed adjusted EBITDA profits of $2.1 million, an improvement of $1.3 million, or 163 percent, over the first quarter in 2009.

Product revenue grew 33 percent for the first quarter, which resulted in year over year growth in adjusted EBITDA profits due to high gross margins on product sales in the Detection group.

“With continued growth in adjusted EBITDA profits, we are pleased with our achievements in the first quarter of 2010,” said Colin Cumming, CEO of ICx Technologies. “Our revenue would have been higher for the quarter, but a significant contract was delayed and came in after the quarter closed. This revenue will be captured later in the year.”

Key First-Quarter Highlights

• ICx released its ClearPoint™ bottled liquids screener, which rapidly and accurately identifies suspicious liquids through their containers. Based on recent breakthroughs in Raman technology, ClearPoint is designed to tackle the challenge of screening bottled liquids in the pressure-filled, fast-paced environment of airport security checkpoints.
• The Critical National Infrastructure Authority (CNIA) of Abu Dhabi, UAE, awarded ICx a $9 million contract for mobile integrated surveillance systems. Under the contract, ICx will provide their integrated millimeter wave ground-based radar and thermal/CCTV imaging systems on mobile tactical platforms for deployment around critical infrastructure sites to provide comprehensive wide area surveillance.
• ICx introduced a new product in its CommandSpace® product suite, a pre-configured, turnkey wide area surveillance system that includes integrated ground surveillance radar and forward looking infrared cameras. This fixed CommandSpace solution is less dependent upon infrastructure which allows rapid implementation and lower up-front and life cycle costs.
• The Tennessee Valley Authority (TVA), the largest public power company in the U.S., issued ICx a blanket $3 million contract for remote terminal units (RTUs). Callisto™ Edge RTUs are well suited to address Smart Grid applications and will be deployed throughout the TVA supervisory control and data acquisition (SCADA) system.

Revenue and Earnings Outlook for 2010

ICx reconfirmed today its initial guidance for 2010. The Company expects to show solid results in 2010 with revenue in the range of $212 million to $226 million, reflecting growth rates of 16% to 23% over 2009. The Company expects EPS in 2010 to range from $0.06 per share to $0.25 per share on a fully diluted basis. This compares to a loss per share of ($0.31) in 2009.

Conference Call

In connection with the earnings release, ICx will host a conference call and Webcast for investors and analysts to discuss its results for the quarter on Thursday, May 13, at 4:30 p.m. Eastern Time.

Participants should call, toll-free, 1.877.315.9025 (United States/Canada), or 1.678.894.3956, and request the ICx Technologies call. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call 1.706.645.9291 (United States/Canada), or call toll-free at 1. 800.642.1687 and enter confirmation code 72404125. The recording will be available from 7:30 p.m. (EDT) on Thursday, May 13, 2010, through midnight, May 20, 2010 (EDT). A live broadcast of the earnings conference call will also be available via the Internet at http://www.ICXT.com in the 'Events & Presentations' section under 'Investor Relations'. The webcast will be archived on the site for 60 days.

About ICx® Technologies

ICx Technologies is a leader in the development and integration of advanced sensor technologies for homeland security, force protection and commercial applications. Our proprietary sensors detect and identify chemical, biological, radiological, nuclear and explosive threats, and deliver superior awareness and actionable intelligence for wide-area surveillance, intrusion detection and facility security. We then leverage our unparalleled technical expertise and government funding to address other emerging challenges of our time, ranging from a cleaner environment and alternative energy to life science.

Safe-Harbor Statement

All forward-looking statements contained in this release are made within the meaning of and pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are all statements other than statements of historical facts, including but not limited to statements concerning the outlook for the Company's revenues and EPS for fiscal 2010; and all other statements concerning the plans, intentions, expectations, projections, hopes, beliefs, objectives, goals and strategies of management. Forward-looking statements are not guarantees of future performance or events and are subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed, projected or implied by such forward-looking statements. Important risks, uncertainties and other factors include, but are not limited to, demand for the Company's products and services; the ability of the Company to successfully develop and expand its products, services, technologies and markets; the ability of the Company to effectively assimilate acquired businesses and achieve the anticipated benefits of its acquisitions; changes in U.S. government funding levels to purchase the Company’s products and services; the ability of the Company to sell its products to original equipment manufacturers, prime contractors and system integrators; seasonality; competition; the ability of the Company to develop innovative products; the ability of the Company to attract, retain and motivate key personnel; the ability of the Company to secure and maintain key contracts and relationships, including contracts with the U.S. government; general economic, market and business conditions, uncertainties and other factors identified from time to time in the Company's filings with the Securities and Exchange Commission. Accordingly, there can be no assurance that the results expressed, projected or implied by any forward-looking statements will be achieved, and readers are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements in this press release speak only as of the date hereof and are based on the current plans, goals, objectives, strategies, intentions, expectations and assumptions of, and the information currently available to, management. The Company assumes no duty or obligation to update or revise any forward-looking statements for any reason, whether as the result of changes in expectations, new information, future events, conditions or circumstances or otherwise.

Use of Non-GAAP Financial Measures

In evaluating its business, ICx considers and uses Adjusted EBITDA as a supplemental measure of its operating performance. The Company defines Adjusted EBITDA as earnings from continuing operations before interest, taxes, depreciation and amortization, plus non-cash equity compensation. The Company also presents Adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company’s operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, Adjusted EBITDA does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than ICx, limiting their usefulness as comparative tools. ICx compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.

  ICx TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations and Net Loss (Unaudited) (dollars in thousands, except per share amounts)     Three Months Ended March 31, 2010   2009 Revenues: Product revenues $ 21,715 $ 16,321 Contract research and development revenues 12,161 11,282 Service and other revenue   6,694     19,788   Total revenues   40,570     47,391     Cost of revenues: Cost of product revenues 8,366 8,100 Cost of contract research and development revenues 8,952 8,314 Cost of service and other revenues   4,821     14,194   Total cost of revenue   22,139     30,608   Gross profit   18,431     16,783     Operating expenses: General and administrative 7,040 7,189 Sales and marketing 6,309 6,354 Research and development 3,760 3,516 Depreciation and amortization   1,952     3,023   Total operating expenses   19,061     20,082   Operating loss   (630 )   (3,299 )   Other income (expense): Interest income 11 52 Interest expense (27 ) (17 ) Other, net   247     56   Total other income   231     91   Loss before income taxes (399 ) (3,208 ) Income tax expense   280     113   Loss from continuing operations $ (679 ) $ (3,321 ) Loss on discontinued operations, net of tax (313 ) (154 )     Net loss $ (992 ) $ (3,475 )   Other comprehensive income Foreign currency translation adjustment, net of tax   (273 )   (779 ) Comprehensive loss $ (1,265 ) $ (4,254 )   Net loss per common share Basic and diluted $ (0.03 ) $ (0.10 )   Reconciliation of Non-GAAP Measure: Net loss (992 ) (3,475 ) Add (subtract) Loss from discontinued operations 313 154 Income tax expense 280 113 Interest income (11 ) (52 ) Interest expense 27 17 Depreciation and amortization 1,952 3,023 Stock-based compensation expense   530     1,030   Adjusted EBITDA $ 2,099   $ 810       ICx TECHNOLOGIES, INC. AND SUBSIDIARIES Condensed Balance Sheets (Unaudited) (dollars in thousands)     March 31,   December 31, Assets 2010 2009 Current assets: Cash and cash equivalents $ 28,123 $ 22,270 Restricted cash 8,473 8,465 Trade accounts receivable, net 28,151 36,751 Unbilled revenue 10,789 8,957 Inventories 23,764 22,491 Other current assets 3,750 4,553 Current assets of discontinued operations   1,175   1,052 Total current assets 104,225 104,539 Property, plant and equipment, net 9,195 9,673 Goodwill and intangibles, net 79,042 80,176 Other noncurrent assets 3,788 3,671 Noncurrent assets of discontinued operations   238   365 Total assets $ 196,488 $ 198,424   Liabilities and Stockholders' Equity   Current liabilities $ 24,917 $ 26,193 Current liabilities of discontinued operations 294 828 Noncurrent liabilities   894   966 Total liabilities   26,105   27,987   Total stockholders' equity   170,383   170,437 Total liabilities and stockholders' equity $ 196,488 $ 198,424     ICx TECHNOLOGIES, INC. AND SUBSIDIARIES Selected Segment Information (Unaudited) (dollars in thousands)     Three Months Ended March 31, 2010 2009 Detection Product revenue $ 14,409 $ 9,295 Contract research and development revenue 11,591 11,084 Service and other revenue   1,158     819   Total revenue $ 27,158 $ 21,198 Gross profit %   46.7 %   40.3 %   Surveillance Product revenue $ 6,044 $ 5,112 Contract research and development revenue 570 198 Service and other revenue   662     10,770   Total revenue $ 7,276 $ 16,080 Gross profit %   54.0 %   32.7 %   Solutions Product revenue $ 1,281 $ 1,938 Contract research and development revenue 37 35 Service and other revenue   4,913     8,291   Total revenue(1) $ 6,231 $ 10,264 Gross profit %   29.1 %   29.0 %

 

(1)   Includes $95 and $151 of intersegment revenue that has been eliminated in the Consolidated Statement of Operations and Net Loss for the three months ended March 31, 2010 and 2009, respectively.