ARNPRIOR, ONTARIO--(Marketwire - May 22, 2012) - Pacific Safety Products Inc. ("PSP" or the "Company") (PSP.V - News), today reported financial results for the three month period ended March 31, 2012.
"Profitability is a significant milestone in the transformation of the Company," said Chief Executive Officer, Doug Lucky. "We're creating a business platform on the back of focus and alignment decisions, a stable balance sheet, and a value-added operating cost structure."
-- The Company reported net income for the third quarter of $0.1 million
compared to a net loss of $1.4 million during the second quarter of
fiscal 2012 and a net loss of $0.1 million during the third quarter of
the prior year. The Company recorded an impairment charge with respect
to intangible assets in the second quarter in the amount of $1.2
-- Working capital remained strong despite a modest decline from $2.9
million at June 30, 2011 to $2.6 million at March 31, 2012. The working
capital ratio at March 31, 2012 was 1.66 compared to 1.69 at June 30,
-- Sales for the third quarter were $5.2 million, an increase of $1.5
million or 41.6% from the second quarter of fiscal 2012, and
approximately $3.1 million or 37.8% lower than the third quarter of the
prior year which included revenue from the Company's former distribution
-- The gross margin percentage for the third quarter was 29.2%, a continued
improvement over the gross margins of 28.1% for the second quarter of
fiscal 2012 and 21.0% for the third quarter of the prior year. The
increase in gross margin percentage, offset by lower sales, represented
a decrease of $0.2 million in gross margin dollars or 13.5% compared to
the third quarter of the prior year.
-- Operating expenses for the third quarter were $1.3 million,
approximately 26.4% lower than the third quarter of the prior year of
-- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA")(1) was $0.25 million for the third quarter compared to $0.26
million in the third quarter of the prior year, despite the decrease in
sales of 37.8% from the third quarter of the prior year.
Mr. Lucky commented further, "In order to ensure the Company's operating cost structure is adding value, significant cost has been removed through cost reduction initiatives designed to align and size operations to North American business opportunities entering fiscal 2013."
The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely(R). PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, tactical clothing, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of National Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products under the GH Armor Systems(R) brand to U.S. based law enforcement and private security firms. The Company also produces tactical clothing. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.
Forward-Looking Information: This news release contains certain statements which may constitute "forward-looking information" within the meaning of applicable securities laws. These statements relate to anticipated or assumed events or results including, without limitation, with respect to the anticipated impact of the steps being taken to align and size the Company's operations to current North American business opportunities. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Although the Company believes that the expectations conveyed by the forward-looking information are reasonable based on information currently available to it, these statements are based on management's expectations, estimates and projections and involve a number of risks, uncertainties and assumptions, both known and unknown. As a result, the results or events depicted in these forward-looking statements may differ materially from actual results or events. Many factors could cause results to differ materially from those stated including, but not limited to the impact of price and product competition, changes in general industry and market conditions, inability to successfully plan and execute cost reduction and business improvement strategies, ability to retain key staff, restrictions and covenants contained in credit agreements, fluctuations in currency, exchange and interest rates and commodity prices, ability to retain existing customer contracts, reliance on key customers, as well as various other factors which are discussed in the Company's filings with applicable securities regulatory authorities at www.sedar.com. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
For complete condensed consolidated interim financial statements with notes and management discussion and analysis, refer to SEDAR (www.sedar.com).
(1) Adjusted EBITDA consists of earnings before interest expense, income taxes, stock based compensation, amortization, foreign exchange, and other one-time charges and gains. PSP believes EBITDA is a useful measure in the evaluation of performance. EBITDA is not a measure recognized under Generally Accepted Accounting Principles ("GAAP") and does not have a standardized meaning as prescribed by GAAP. Therefore, EBITDA may not be comparable to similar measures presented by other entities. Investors are cautioned that EBITDA should not be construed as an alternative to net loss determined in accordance with GAAP.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Pacific Safety Products Inc.
Chief Executive Officer