Manufacturers, distributors see an uptick post 9/11

Inquiries and orders are now up after a temporary slowdown for some companies
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Friday, March 1, 2002

Some security manufacturers and distributors finally seem to be seeing the impact of Sept. 11, reporting that sales of CCTV and access control products are beginning to increase after a short slowdown.

While exact numbers are not available yet, in terms of quarterly results that ended in December, product makers and suppliers say they are now noticing a marked increase in inquiries and in many cases, business. (See Security Systems News' NewsPoll results)

"Post 9/11 we have seen a big surge on the military side," said Flint Cooper, executive vice president and general manager of distributor Richardson Electronics Security Systems Division in Houston.

Panasonic is also seeing a surge on government related orders, according to Frank Abram, general manager of Panasonic Security and Digital Imaging Co. "We have noticed a difference, particularly in our government sales," said Abram. "There's a tremendous increase in request for product information and we've had significant increase in purchasing from the government."

And while Richardson Electronics saw a slowdown in CCTV and access control orders in the private sector initially, business on that end is now picking up, said Cooper.

A short slowdown in orders seems to be what happened to Videology Imaging Solutions, too. Initially, Carol Either, president and chief executive officer of the camera manufacturer, expected sales to jump. But that wasn't the case.

"We got many calls saying, 'Wow, you're so lucky to be in this business. Your sales must be booming'," said Either. "That's the general perception out there, but that's not the case after 9/11."

By mid-January, Either said business seems to be returning back to normal, with more orders for products coming in. "The good news is that finally everything is turning into orders and delivery," she said.

Jack Mallon, a security industry analyst and publisher of Mallon's Security Investing, said on the investor side, the market has been mixed. Only a few public companies have seen their stocks increase.

Companies such as Vicon, Silent Witness and Napco are maintaining an upward momentum for the year stock-wise, while companies like Armor Holdings, Frisco Bay Industries, Ultrak, Universal Security and Diebold have seen their stocks decrease to some degree in January, said Mallon.

"It tells me the exuberance of the post 9/11 investor in security has dipped somewhat as we get into 2002," said Mallon. But that's not to say that the newly found spotlight on security is about to go away anytime soon, he said.

Cooper and Abram both said they expect the increase in business in the security market will be long lived.

"We saw similar patterns (after) the first World Trade Center bombing and after the Oklahoma City incident, but those were only sustained for a year," said Cooper. "We see this as a much longer lasting effect in terms of demand of close circuit video."