Posted on 08/17/11
Implant Sciences Corporation has 32 distribution plants across 6 continents and is one of the very rare, if not the only company in the U.S, which has a non-contact non-radiation explosives trace detection technology. The Transportation Security Administration (TSA) has stated the need for such a device to make security checks more dignified and effective. As IMSC’s QS-H150 perfectly fits the definition, the company has chances of substantially increasing shareholder value if they land a with the TS. Moreover, the Department of Homeland Security has taken IMSC’s ETD technology under review for implementation at airports as security check equipment; and if approved, the company would be given a $2.1 million contract.
Implant Sciences has a patent portfolio made up of 11 patents related to technological methods of explosives and narcotics analysis, detection, and sample harvesting and collection, which helps the company, generate steady cash flow. Talking about cash, the company has successfully been able to increase revenue 421.9% due to expanding sales of their portable explosives trace detectors in countries like Japan, Mexico, China and Spain. The company has recently increased the number of distributors by adding seven new countries described later in this article.
What makes IMSC a high potential company is the fact that it is the fourth best global provider of ETD technology and the company has strong U.S government support. Furthermore, the company has a strong balance sheet, the historical analysis of which indicates efficient conversion of short-term investments into cash. The company does not have any long-term debt and has enough cash on hand to ensure liquidity.
About the Company
Implant Sciences Corporation, established in 1984, belongs in the trace explosive detection industry alongside competitors such as General Electric (GE Securities) and Smiths Detection. The company develops, manufactures and sells sensory and detection systems for security, safety and defense (SS&D) industries which are associated with Homeland Defense efforts worldwide. IMSC has two main products namely Quantum Sniffer QS-H150 Portable Explosives Detector and Quantum Sniffer QS-B200 Bench-top Explosives Detector. The company also engages in the development of the propriety explosives trace detection (ETD) technology used in the mentioned products. Private and public companies make use of the products to detect and screen people, cargo, baggage and other objects for traces of explosives. There is high demand for such products since 2001 due to enhanced security procedures for protection against terrorism. IMSC’s Quantum Sniffer Portable Explosives Detectors have been labeled qualified anti-terrorism technology by the U.S Department of Homeland Security under the SAFETY (Support Anti-Terrorism by Fostering Effective Technology) act of 2002. Implant Science’s is also among the top five global providers of ETD products.
According to the CEO of Implant Sciences, Glenn D. Bolduc, their non-contact and non-radioactive way of detecting explosive traces eliminates any instances of embarrassment or health concerns during the passenger screening method, allowing the security personnel to conduct a non-intrusive, efficient and graceful screening procedure. Many companies in this industry have long been attempting to create such Explosive Trace Detection (ETD) technology; IMSC being the pioneer, gives the company the first-mover advantage in the market.
IMSC markets and sells its products both domestically and globally with United States and China being the main locations. Recently sales of the products to Mexico, Spain and Japan have increased allowing IMSC to generate more revenue from the international market rather than domestic. The major customers of the company include the India Ministry of Defense, Beijing Subways, Japan National Police Agency, Russian Federation Ministry of Transportation, and Civil Aviation Administration of China. With the recent expansion, the company has 32 distributers across 6 continents.
Quantum Sniffer QS-H150 Portable Explosives Detector:
The product makes use of Ion Mobility Spectrometry in order to detect and identify trace amounts of explosives which come in various forms of homemade, improvised, commercial and military explosives. Owing to the portable, high-performance, and low cost features of the product, IMSC has managed to sell over 1300 units; approximately $30 million sales worldwide.
Quantum Sniffer QS-B200 Bench-top Explosives Detector:
Similar to QS-H150, QS-B200 uses non-radioactive and contamination resistant Ion Mobility Spectrometry to detect and identify trace amounts of military, improvised, commercial and homemade explosives as well as narcotics. The only difference is the fact that this product is a bench-top rather than hand-held.
How the technology works
In the first step, the non-contact ETD technology uses its heated vortex to release and collect the trace particles from the surface of the sample. The vortex, which is like a miniature tornado, transports the vapor taken from the sample directly to the detector. By the use of its Ion Mobility Spectrometry, the ionized molecules in the vapors are sent through a rift tube where it is separated, collected and analyzed by special software. If any trace of explosives is detected the device provides with visual and auditory alarm and further displays the necessary information regarding the detected explosive.
Implant Sciences holds an extensive range of intellectual property related to technological methods of explosives and narcotics analysis, detection, and sample harvesting and collection. The company’s patent portfolio is made up of 11 patents related to security with 4 additional patents still pending.
|Market Capitalization||23.70 Million|
|Shares Outstanding||28.90 Million|
|% held by insiders||2.40%|
|% held by institutions||N/A|
Glenn D. Bolduc, President and CEO at Implant Sciences, has 25 years of extensive experience in the field of public and private technology and services companies as an executive and financial leader. The Financial Vice President also has 25 years of leadership experience in his line of profession of accounting and finance. Moreover, IMSC has veterans as members of board of directors such as Robert Liscouski, who was the Director of Information Assurance at The Coca Cola Company, and Joseph E. Levangie, who has the expertise required by small-cap companies to overcome their growth and financial challenges owing to his vast experiences as a CEO of a business advisory firm. Moreover, the board of director has Howard Safir as the Director who is the Chairman and CEO of one of the highly renowned security consulting company. He has extensive expertise in the field of defense and security. Safir was the Assistant Director of the DEA and chief of Witness Security Division at U.S Marshals Service and is the Director of the Foundation of the International Association of Chiefs of Police.
Balance Sheet Analysis
It is evident from the asset decomposition how over the years short-term investment has decreased and cash has increased, this demonstrates how IMSC is capable of converting their short-term investments and inventory into liquid cash, ensuring liquidity for the company. The decrease in total assets is due to the drastic decrease in good will, which is a non cash item. This further confirms the fact that the company is financially stable as the decrease of assets is not due to decrease in