American Defense Systems Inc. Reports Second Quarter 2008 Financial Results.Management raises the minimum expectation for 2008 full year revenue guidance to reflect a new range of $49 million to $54 million HICKSVILLE, N.Y. -- American Defense Systems, Inc. "ADSI (Active Directory Services Interface) A programming interface from Microsoft for accessing the Microsoft Active Directory (Windows 2000), the directory within Exchange and other directories via providers. " (AMEX AMEX See: American Stock Exchange : EAG EAG - Extended Affix Grammar ), a provider of advanced transparent as well as opaque armor, architectural hardening hardening, in metallurgy, treatment of metals to increase their resistance to penetration. A metal is harder when it has small grains, which result when the metal is cooled rapidly. and security products for the defense and homeland defense markets, today announced financial results for the second quarter 2008, ended June 30, 2008. Mr. Anthony J. Piscitelli, Chairman & Chief Executive Officer of American Defense Systems, Inc., stated, "Our second quarter performance reflects another solid quarter of execution towards our strategic goals and full year 2008 financial guidance. First and foremost, we continue to strengthen and expand our portfolio of complementary military and homeland defense offerings including the formal launch of our new T2 live fire tactical training offering in May 2008, which is seeing strong initial interest from a wide range of audiences including federal and local law enforcement, as well as domestic and international governmental agencies. I am also pleased to announce the successful completion of ADSI's testing and certification process to qualify as a primary contractor for new architectural hardening activities at U.S. State A U.S. state is any one of the fifty subnational entities of the United States, although four states use the official title "commonwealth". The separate state governments and the federal government share sovereignty, in that an American is a citizen both of the federal entity and Department facilities, which we believe will open up some excellent new opportunities going forward." "Additionally, on the military side of the business we are expanding our relationships with several large globally positioned, heavy equipment manufacturers as well as expanding our presence in international markets which we expect to provide new sales channels for our military and homeland defense products. Looking forward, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op for ADSI's near-term and long-term prospects, including significant top line growth as we upwardly adjust our minimum expectations for full year revenue growth to a new range of between 34 percent and 48 percent. As we execute towards this goal, and enter what we believe will be a stronger half of our fiscal year 2008, we also see the long-term potential to expand our footprint from our core armorized construction equipment business to new segments of the market for military and war fighting vehicles," concluded Mr. Piscitelli. Revenues for the second quarter of 2008 were $9.1 million, a decrease of 12 percent from the $10.4 million reported for the same period in 2007. Revenues for the first six months of 2008 totaled $18.6 million, an increase of 12 percent from the $16.6 million reported for the first six months of 2007. Contract backlog as of June 30, 2008 totaled $45.0 million, up 41 percent year-over-year. Gross margin as a percentage of revenue for the second quarter of 2008 was 31.0 percent as compared to 39.4 percent for the second quarter of 2007. Notable cash expenditures during the quarter included $0.8 million associated with the company's final allocation of expenses for its SEC registration and public exchange listing initiative, a $0.3 million contribution to the Marine Corps-Law Enforcement Foundation (MCLEF MCLEF Marine Corps-Law Enforcement Foundation ), $0.3 million in expense related to the expanded build out of ADSI's corporate headquarters, $0.3 million in expenses related to the launch of the company's state-of-the-art T2 interactive live-fire training system, and lastly a $0.3 million scheduled payment in conjunction with the prior Tactical Applications Group (TAG) acquisition. Net income in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) for the second quarter of 2008 was $3.8 million, or $0.09 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a GAAP net income for the second quarter 2007 of $1.5 million, or $0.01 per basic and diluted share. GAAP net income during the second quarter of 2008 also includes the benefit of approximately $4.0 million in non-cash gains related to the adjustment of fair value associated with the series A convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and related warrants as well as stock based compensation expense. Excluding the $4.0 million in non-cash gains related to the adjustment of fair value associated with the series A convertible preferred stock and related warrants, as well as approximately $21,000 in stock based compensation expense, the company reported a non-GAAP net loss for the second quarter of 2008 of $0.02 million, or $(0.02) per basic and diluted share. Refer to the "Use of Non-GAAP Measures" section and accompanying financial table for a reconciliation of GAAP financial information to non-GAAP. Financial Guidance Based on current business conditions and expectations, ADSI is raising the company's minimum revenue expectations of its previously issued fiscal year 2008 revenue to reflect a new target of between $49.0 million and $54.0 million, as compared to revenue of $36.5 million reported for fiscal year 2007. Conference Call and Webcast On Monday, August 11, 2008 at 9:00 a.m. Eastern Time, ADSI management will conduct a conference call to discuss the second quarter 2008 results which will be simultaneously Web cast. The call will feature Anthony J. Piscitelli, Chairman and Chief Executive Officer, Gary Sidorsky, Chief Financial Officer and Brigadier General Fergal Foley fo·ley n. 1. A technical process by which sounds are created or altered for use in a film, video, or other electronically produced work. 2. A person who creates or alters sounds using this process. (USA Ret.), Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . To access the second quarter 2008 earnings conference call, participants should dial +1-800-399-0427 and international participants should dial +1-706-643-1624. Investors are also invited to listen to the call live via Web cast on the ADSI corporate Website at http://www.adsiarmor.com. Please go to the site at least 15 minutes earlier to register, download, and install any necessary audio software. A Web cast replay of the call will be available on the Website approximately two hours after the conference call is completed. Use of Non-GAAP Measures The non-GAAP financial measures discussed in the text of this press release and accompanying non-GAAP supplemental information represent financial measures used by American Defense Systems' management to evaluate the operating performance of the company and to conduct its business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Non-GAAP financial measures discussed in this press release exclude non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to stock-based compensation expense, gains or losses associated with adjustments from cost to fair value for the company's series A convertible preferred stock and gains or losses associated with adjustments to fair value for the related warrants. Management uses the non-GAAP financial measures for planning purposes, including the preparation of operating budgets Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for investors in evaluating ADSI's financial and operational performance. However, these non-GAAP financial measures are not intended to be an alternative to financial measures prepared in accordance with GAAP and should not be considered in isolation from the company's GAAP results of operations. A detailed reconciliation between the company's GAAP and non-GAAP financial results is provided in this press release and investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the company's SEC filings. About American Defense Systems, Inc. (ADSI) American Defense Systems, Inc. "ADSI" (AMEX: EAG) offers advanced solutions in the design, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. , and installation of transparent and opaque armor, security doors, windows and curtain wall curtain wall Nonbearing wall of glass, metal, or masonry attached to a building's exterior structural frame. After World War II, low energy costs gave impetus to the concept of the tall building as a glass prism, an idea originally put forth by Le Corbusier and Ludwig Mies systems for use by military, law enforcement, homeland defense and corporate customers. ADSI engineers also specialize spe·cial·ize v. 1. To limit one's profession to a particular specialty or subject area for study, research, or treatment. 2. To adapt to a particular function or environment. in developing innovative, functional and aesthetically pleasing security applications for the mobile and fixed infrastructure physical security industry. For more information about American Defense Systems, Inc. please visit the corporate Web site at http://www.adsiarmor.com Some of the statements made by American Defense Systems, Inc. ("ADSI") in this press release, including, without limitation, statements regarding ADSI's anticipated future growth, are forward-looking in nature. ADSI intends that any forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. shall be covered by the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions for such statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "should," "expects," "anticipates," "intends," "plans," "believes," "estimates," "predicts," "potential," "continues" and similar expressions are forward-looking statements. ADSI cautions you that forward-looking statements are not guarantees of performance. ADSI undertakes no obligation and disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements involve known and unknown risks and uncertainties that may cause ADSI's actual future results to differ materially from those projected or contemplated in the forward-looking statements. ADSI believes that these risks include, but are not limited to: ADSI's reliance on the U.S. government for a substantial amount of its sales and growth; decreases in U.S. government defense spending; ADSI's ability to contract further with the U.S. Department of Defense; ADSI's ability to comply with complex procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. laws and regulations; competition and other risks associated with the U.S. government bidding process; changes in the U.S. government's procurement practices; ADSI's ability to obtain and maintain required security clearances; ADSI's ability to realize the full amount of revenues reflected in its backlog; ADSI's reliance on certain suppliers; and intense competition and other risks associated with the defense industry in general and the security-related defense sector in particular. Additional information concerning these and other important risk factors can be found under the heading "Risk Factors" in ADSI's filings with the Securities and Exchange Commission, including, without limitation, its registration statement on Form 10. Statements in this press release should be evaluated in light of these important factors. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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