- Appointed Donald W. Morgan as chief financial officer of RAE Systems.
- Florida and Kentucky National Guard Civil Support Teams and North Carolina Rapid Response Team purchased Rapid Deployment Kits.
- U.S. military purchased our top selling aviation wing tank entry kits.
- NASA purchased our PID instruments for rocket fuel monitoring.
- U.S. Military chemical weapons school purchased our most sensitive PID products.
- Armed services purchased our NeutronRAE radiation pagers for base protection.
For 2004, RAE Systems reported revenue of $45.8 million as compared to revenue of $31.3 million in 2003, an increase of 46 percent. KLH, which was acquired in June of 2004, contributed approximately $8.0 million in revenue for the year.
Gross margins for 2004 were 60 percent as compared to 61 percent for 2003. Net income for 2004 was $2.5 million, or $0.04 diluted earnings per share, as compared to net income of $2.8 million for 2003, or $0.06 diluted earnings per share.
Sales and marketing expenses were $11.0 million for 2004 or 24 percent of revenue as compared to $7.3 million or 23 percent of revenue for 2003. Research and development expenses were $4.3 million or 9 percent of revenue for 2004 as compared to $3.0 million or 10 percent of revenue for 2003. General and administrative expenses were $8.2 million or 18 percent of revenue for 2004, as compared to $5.2 million or 16 percent of revenue for 2003.
Chen continued, "RAE Systems has laid the foundation for continued growth in multiple key markets around the world and we are confident of achieving our goal of $55 to $60 million dollars in revenue in 2005."
2004 Key Highlights and Developments
- Acquired 64 percent of KLH, a Beijing-based, hazardous environment detection company in June 2004.
- Launched new products, including ppbRAE Plus, AreaConnect 500, AutoRAE, and EntryRAE.
- Successfully demonstrated RAEWatch wireless sensor networks in three separate venues.
- Major oil company purchased AreaRAEs, Rapid Deployment Kits, UltraRAEs and RAEGuard monitors.
- Major agribusiness company purchased our RAEGuard and MultiRAEs to monitor their production of BioDiesel and Ethanol fuels.
- U.S. Fire departments continued their adoption of MultiRAEs and Rapid Deployment Kits for perimeter monitoring of hazardous material accidents and major public events.
- Awarded U.S. patent 6,734,435 for pioneering photoionization detection (PID) improvements.
- Provided public venue protection for New Years Celebrations, the 2004 Super Bowl, the Greek Olympics, the World Series, the Presidential Debates, political party conventions and many other high profile events.