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Print Edition StoriesFriday, February 5, 2010
Reveal Imaging buoyed by automated airport screening demand
By Rodney H. Brown
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While most people are calling for more airport security following the alleged bombing attempt on Christmas Day, Reveal Imaging Technologies Inc. has been growing steadily by focusing on better security.
The 7-year-old Bedford company made its first impression with an X-ray CT-based device that automatically inspects checked baggage for contraband material such as explosives or weapons. Automation was the key to its success — as the thought of having a screener look at an image of each bag was a non-starter with most airports.
Now, according to Reveal CEO Michael Ellenbogen, that automation is drawing the attention of the federal government and international airports for use in areas that currently require a living, breathing employee.
“Our customers are telling us they don’t want more equipment with screens that show images that require more guards or security operators staring at them all day long,” Ellenbogen said. “They want automated decisions. That’s what we are good at.”
To keep up with the new demand for its products and the interest in segueing to new screening areas, Reveal has jumped into a bit of a hiring spree.
“In 2009 we added over 30 new employees and I think we currently have about 17 open positions,” Ellenbogen said.
The company, which has approximately 120 employees, in October 2009 landed a $3.9 million contract from the Department of Homeland Security’s Office of Science and Technology to “look at different technologies that can do a better job of automating the personnel inspection process,” Ellenbogen said.
Transitioning its core technology from checked baggage to carry-ons and passenger inspections will be the next stage in Reveal’s growth path. While Ellenbogen wouldn’t disclose financial details of the private company, he did say Reveal is profitable, cash-positive and grew in 2009 when other companies were reeling.
“We saw about a 25 percent increase in revenue and a significant increase in profitability and we anticipate similar growth through this year as well,” he said.
Key to that growth is the Reveal philosophy of using its proprietary software to make scanners work more efficiently with less hardware, creating devices that are one-third the size and cost of its competitors, Ellenbogen said. That focus on software is what also drives the automation aspect of its scanners, and will drive its growth going forward.
“There’s still significant need for additional equipment in the airports in the U.S. and our international business is growing 50-to-100 percent per year,” Ellenbogen said. “It’s worldwide.”
The U.S. market was valued at $4.53 billion in 2007, according to Frost & Sullivan, which projected spending on screening technology in U.S. airports alone to reach $5.42 billion in 2012.
Vying for their own slice of the baggage screening pie are California-based Rapiscan Systems, a division of OSI Systems Inc.; Smiths Detection, a unit of publicly traded U.K. technology conglomerate Smiths Group plc; and New York’s L-3 Communications Holdings Inc.
Reveal plans to further invest in its core technology to adapt to what are expected to be more stringent accuracy requirements in dealing with people and their carry-on bags.
“The challenge is not easy,” Ellenbogen said. “You are trying to balance high levels of detection of materials that you are interested in with a low false alarm rate and without violating privacy concerns.”
As a profitable company that capped off its venture money at $25 million with a final round in February 2008, Reveal seems a likely candidate for an initial public offering, but Ellenbogen didn’t want to speculate.
“We are looking at all options,” he said.
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