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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) APRIL 2, 1999
AMERICAN SCIENCE AND ENGINEERING, INC.
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(Exact Name Of Registrant As Specified In Its Charter)
MASSACHUSETTS
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(State or Other Jurisdiction of Incorporation)
1-6549 04-2240991
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(Commission File Number) (I.R.S. Employer Identification No.)
829 MIDDLESEX TURNPIKE, BILLERICA, MASSACHUSETTS 01821
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(Address of Principal Executive Offices) (Zip Code)
(978) 262-8700
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On April 2, 1999, American Science and Engineering, Inc. (the
"Company") mailed a letter to the Company's shareholders describing pending
litigation proceedings brought by the Company against each of EG&G and the U.S.
Customs Service alleging, among other things, infringement of the Company's
patents, misappropriation of the Company's trade secrets and a violation of
statutory contracting procedures. A copy of the letter to shareholders in
included as an exhibit to this Report.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1. Letter to Shareholders of the Company dated April 2, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 5, 1999 AMERICAN SCIENCE AND ENGINEERING, INC.
By: /s/Ralph S. Sheridan
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Ralph S. Sheridan
President and Chief Executive Officer
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April 2, 1999
Dear Shareholder:
I am writing to advise you about litigation we recently launched against EG&G
and the U.S. Customs Service. I believe when a public company creates a
technology franchise that is successful and highly differentiated, one must be
prepared to defend it fiercely from imitators seeking to shortcut the complex
and expensive creative process.
Last fall, after learning that EG&G was attempting to market a system that
copies our MobileSearch-Trademark- system, AS&E-Registered
Trademark- filed a suit against EG&G for infringing our backscatter and
MobileSearch patents and misappropriating our trade secrets. Some of the
technology at issue in this case traces back to trade secrets specifically
held to belong to AS&E as a result of the successful litigation against
Martin Annis in 1996.
More recently, AS&E learned that U.S. Customs contracted with EG&G to build a
mobile X-ray system. AS&E has strong reason to believe that EG&G's performance
under that contract violates trade secret law and infringes at least two of our
patents. In addition, we believe this contract to be a violation of statutory
contracting procedures. The purpose of the new lawsuit against Customs is to
obtain an injunction that halts this contract.
Customs apparently believes that they must seek a second source for AS&E's
MobileSearch technology. We believe Customs may be motivated by: 1) the fact
that the MobileSearch system has proven to be a highly effective tool for
interdicting drugs on the border and 2) their plan to buy a substantial number
of these systems. In its zeal to find a second source, we believe U.S. Customs
has violated contracting laws, trade secret laws and promoted unlawful transfer
of AS&E's intellectual property. We initiated this litigation because the
evidence clearly supports our position.
As a small, technology-based company, AS&E's success is based on taking
innovative technology to the global security and inspection marketplace. We
have invested heavily in establishing our world recognized capability. The
success of this program is evidenced by trailing 12-month revenue growth of
58%, largely from international orders for the CargoSearch-Trademark- family
of systems, including MobileSearch. We and our shareholders have a legitimate
right to realize the full benefits of our investment and risk-taking.
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In today's high stakes global inspection marketplace, AS&E's technology is
clearly differentiated from our competition. Where competitors have attempted to
infringe on our technology, we have defended vigorously and successfully. We
have retained bright, aggressive, experienced and highly competent counsel to
lead the current efforts.
We are committed to resolving this situation as quickly as possible. The federal
district court judge hearing the Customs case has supported our request for
expedited proceedings. We hope to report a successful result to you in the first
quarter of fiscal 2000. In the meantime, we will continue to work with U.S.
Customs on a number of matters and to treat them as the valued customer they
are.
Over the last five years we have taken AS&E from $11 million in revenues to over
$50 million. We appreciate your confidence in AS&E and the future of our
technology in the global marketplace. We look forward to providing you with
sustained growth and increasing profitability based on an expanding proprietary
technology platform.
Sincerely,
/s/ Ralph S. Sheridan
Ralph S. Sheridan
Chief Executive Officer and
President
