March: BiodefenseCompany profile: ICx Technologies

ICx Technologies, a small but energetic Northern Virginia-based security company, strikes observers as similar in one way to the Department of Homeland Security: DHS has been built through the merger of two dozen government agencies, and ICx has been built largely through the acquisition of seventeen companies and the formation of two others since it was founded in 2003. The biggest difference, however, is that ICx a highly functional organization and its equipment works.

In early November 2007 the company went public, raising $80 million with an initial public offeringthat priced below the forecasted range. The 5 million share offering, priced at $16 per share, compared with a forecast range of $17 to $19, according to underwriters. Reporter Calvin Biesecker writes that the reason for the slightly-below-expectations IPO had to do with the fact that the company headed to Wall Street with noticeable net losses. In the first quarter of 2007 ICx posted a $9.5 million net loss, which is narrower than the $12.9 million reported in 2006. Sales in the quarter grew 38 percent to $27 million from $19.5 million, although ICx did not strip out its organic growth. In 2006 ICx posted a $127.5 million net loss versus a $14.8 million loss in 2005. When it began operations in 2004 as a holding company, ICx reported a $5 million loss. Sales in 2006 nearly tripled to $90.1 million from $31.3 million in 2005, mainly due to acquisitions. The company was honest in its prospectus. “We expect to incur significant additional expenses for the expansion and integration of our businesses, including expenditures for sales, marketing and manufacturing,” the company said in its filing with the SEC. “As a public company, we also expect to incur significant accounting, legal and other expenses that we did not incur as a private company. We also expect to incur additional expenses to expand our research and development programs, and in developing new products and services we may obtain through acquisitions. As a result, we may continue to incur losses for the foreseeable future” (see detailed fourth quarter and year-end 2007 results below).

Part of that future uncertainty has to do with the nature of companies relying on the homeland security sector for their growth. ICx said that its forecast remains unpredictable due to uneven demand for its products and services as well as uncertainty regarding market acceptance of its new products. The company