American Science & Engineering (Nasdaq: ASEI) reported earnings this week and, as we've come to expect, the analysts' numbers were off by a mile. Sadly, they were a mile ahead of what AS&E actually earned this time around. Sales for the fiscal fourth quarter came in light at $68 million, and earnings dropped 23% to just $1.03 per share. That's the bad news -- now here's the worse news:

Last quarter, after commending AS&E for continuing to gross more profit per revenue dollar than rivals OSI Systems (Nasdaq: OSIS), Analogic (Nasdaq: ALOG), L-3 Communications (NYSE: LLL), and even United Technologies (NYSE: UTX),  I condemned it for failing to produce free cash flow at anywhere near the rate at which it reports net earnings. It's still doing the former -- but it's still doing the latter, too.

AS&E's free cash flow for the fiscal year came to an anemic $27.9 million, just 65% of reported "profits." So while you might think the stock looks attractive at 18 times profits, I'd suggest you look at it a little differently. Look at AS&E as a business that you're being asked to invest in. A business that will cost you 28.5 times the amount of cash that it generates in a year. Sound like a good deal to you?

Nope. Doesn't sound that way to me, either. To win my investing dollars, AS&E is going to have to grow a whole lot faster than the 11% pace Wall Street has it pegged for. And remember -- so far, Wall Street's been shooting high on this one.