Defense Industries International Reports Full Year 2003 Financial Results.Business Editors ASHKELON Ashkelon: see Ashqelon, Israel. , Israel--(BUSINESS WIRE)--March 31, 2004 Defense Industries International, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :DFNS), a leading manufacturer and global provider of personal military and civilian CIVILIAN. A doctor, professor, or student of the civil law. protective equipment and supplies, reported yesterday, March 30, 2004, its financial results for the year ended December December: see month. 31, 2003. Revenues for the year ended December 31, 2003 were $9.03 million, compared to revenues of $10.63 million in 2002. The Company reported comprehensive income for 2003 of $263,957, compared to comprehensive income of $136,288 for 2002. Comprehensive income for each period includes adjustments related to foreign currency translation and unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. or losses on securities available for sale. Excluding these adjustments, net income for 2003 was $127,771, or $0.01 per share based on 25,350,000 shares outstanding, compared with net income of $243,394, or $0.01 per share based on 24,265,479 shares outstanding for 2002. Gross profit for 2003 was $2.58 million, compared with gross profit of $3.84 million in 2002. The Company reported operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $299,962 for 2003, compared with $1.22 million for 2002. Gross margins for 2003 were 28.5% compared with 36.1% in 2002. Revenues for 2003 included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $5.0 million in sales to the local Israeli market, compared with local sales of $8.0 million in 2002. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight from exports were approximately $4.0 million, compared with $2.6 million for 2002. The Company's results for 2003 reflect weakness in its local markets, both military and civilian, due to the economic recession in Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. . Despite the negative trend during the past two years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Israeli Ministry of Finance anticipates an increase of approximately 2.7% in national gross production during 2004, which Defense Industries believes will have a positive impact on future government tenders. Commenting on the results, Joseph Fostbinder, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Defense Industries said, "We made significant progress in 2003 toward expansion of our export business by the penetration The successful unauthorized breach of a security perimeter. See penetration test. of key geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. markets, most notably South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , the expansion of our international customer base and follow-on fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. business from existing customers. We are pleased with the success of our efforts, which resulted in a year-over-year export revenue growth of approximately 55%. The continued successful implementation of our international growth strategy has been essential due to the economic recession and general uncertainty in Israel throughout 2003, which adversely effected our sales to the local market." He continued, "Since the establishment of our South American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of joint venture and the first shipment of our products in May 2003, we have secured several new customers and received follow-on orders from our initial customer. We believe that the potential for continued growth in this market exists, as demand remains strong and customers have recognized that our products are among the best in the industry." Mr. Fostbinder concluded, "During the year, we made several important additions to our product family, introducing minefield protection shoes shoe n. 1. A durable covering for the human foot, made of leather or similar material with a rigid sole and heel, usually extending no higher than the ankle. 2. A horseshoe. 3. and expanding our line of vehicle armoring armoring (ärˑ·m  ·ring),n kits to include lightweight Use in English The word lightweight is conserderd one of the most insulting words in the English language. Is is the only word in the English language is every part of speech at the same time. One lightweight of note is Jason. armor designed for trucks and vans. We believe that the respective end markets for these products are substantial and that both products have the ability to contribute significantly to the Company's future revenues. In the first quarter of 2004, we received orders for our new vehicle armor kits from an international customer. The initial response from this customer has been extremely positive and we expect to receive additional orders during the year." About Defense Industries International, Inc. Defense Industries International, Inc. ("Defense Industries") (www.defense-industries.com) is a leading manufacturer and global provider of personal military and civilian protective equipment and supplies. The Company's products are used by military, law enforcement, border patrol enforcement and other special security forces, as well as corporations, non-governmental organizations “NGO” redirects here. For other uses, see NGO (disambiguation). A non-governmental organization (NGO) is a legally constituted organization created by private persons or organizations with no participation or representation of any government. and individuals throughout the world. Customers include the Israel Defense Forces, the North Atlantic Treaty Organization North Atlantic Treaty Organization (NATO), established under the North Atlantic Treaty (Apr. 4, 1949) by Belgium, Canada, Denmark, France, Great Britain, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, and the United States. (NATO NATO: see North Atlantic Treaty Organization. NATO in full North Atlantic Treaty Organization International military alliance created to defend western Europe against a possible Soviet invasion. ), the United Nations Peacekeeping Forces peacekeeping force n → fuerza de pacificación peacekeeping force n → forces fpl qui assurent le maintien de la paix and other U.N. organizations. 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. Statement This press release contains 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. as defined 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. Certain statements contained in this press release are "forward-looking statements" within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by the company with the Securities and Exchange Commission. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The company undertakes no obligation to publicly release to these forward-looking statements made to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Neither the Company nor its agents assume responsibility for the accuracy and completeness of the forward-looking statements. This release and prior releases are available on the KCSA KCSA Krannert Center Student Association KCSA Kentucky Crushed Stone Association (Frankfort, KY) KCSA Kyiv City State Administration KCSA Kalamazoo Christian School Association KCSA Kentucky-Canadian Studies Association Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most Worldwide website at www.kcsa.com. (Tables to Follow)
DEFENSE INDUSTRIES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December December
31, 2003 31, 2002
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 784,026 $ 831,820
Trade accounts receivable, net of allowance for
doubtful accounts
of $68,345 and $108,765, respectively 1,912,747 1,965,918
Trade accounts receivable - related parties, net 322,373 209,165
Inventory 2,115,825 1,734,966
Investment in marketable securities 704,046 -
Note receivable - officer - 380,986
Deferred taxes 45,353 89,294
Other assets 422,489 186,868
---------------------
Total Current Assets 6,306,859 5,399,017
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, NET 1,662,902 1,847,642
---------- ----------
OTHER ASSETS
Investment in marketable securities - 479,595
Deposits for the severance of employer-employee
relations 437,963 414,350
Deferred taxes, long-term 232,713 235,703
Intangible assets 41,105 47,475
---------- ----------
Total Other Assets 711,781 1,177,123
---------- ----------
Total assets $8,681,542 $8,423,782
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 730,561 $ 982,802
Short-term debt 719,642 425,998
Current portion of long-term debt 489,524 435,152
Other liabilities 603,514 748,188
---------- ----------
Total Current Liabilities 2,543,241 2,592,140
---------- ----------
LONG-TERM LIABILITIES
Long-term portion of debt 728,678 762,732
Provisions for the severance of employer-
employee relations 290,573 397,936
Minority interest 852,914 817,888
---------- ----------
Total Long-Term Liabilities 1,872,165 1,978,556
---------- ----------
TOTAL LIABILITIES 4,415,406 4,570,696
---------- ----------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 13)
SHAREHOLDERS' EQUITY
Preferred stock, $.0001 par value, 50,000,000
shares authorized, none issued and outstanding - -
Common stock, $.0001 par value, 250,000,000
shares authorized, 25,350,000 and 25,100,000
issued and outstanding, respectively 2,535 2,510
Common stock to be issued (250,000 shares) - 25
Additional paid-in capital 1,711,450 1,711,450
Retained earnings 2,767,781 2,640,010
Accumulated other comprehensive loss (215,631) (457,909)
Deferred consulting expense - (43,000)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 4,266,135 3,853,086
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $8,681,542 $8,423,782
========== ==========
DEFENSE INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
Twelve Months Ended
December 31,
2003 2002
----------- -----------
NET REVENUES $ 9,031,963 $10,629,600
COST OF SALES AND PROCESSING 6,455,315 6,790,980
----------- -----------
GROSS PROFIT 2,576,648 3,838,620
----------- -----------
OPERATING EXPENSES
Selling 862,155 663,605
General and administrative 1,414,531 1,955,727
----------- -----------
Total Operating Expenses 2,276,686 2,619,332
----------- -----------
INCOME FROM OPERATIONS 299,962 1,219,288
----------- -----------
OTHER INCOME (EXPENSE)
Financial expense, net (240,815) (148,852)
Impairment loss on marketable securities - (282,435)
Other income, net 168,715 27,429
----------- -----------
Total Other Income (Expense) (72,100) (403,858)
----------- -----------
INCOME BEFORE INCOME TAXES 227,862 815,430
Less: income tax expense 94,554 313,038
----------- -----------
INCOME BEFORE MINORITY INTEREST 133,308 502,392
Minority interest (income) (5,537) (258,998)
----------- -----------
NET INCOME 127,771 243,394
----------- -----------
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss), net
of minority interest gain (loss) of $29,488
and ($8,225), respectively 207,662 (162,225)
Unrealized gain (loss) on available-for-sale
securities 5,128 (5,128)
----------- -----------
Other comprehensive income (loss) before tax 212,790 (167,353)
Income tax (expense) benefit related to items
of other comprehensive income (loss) (76,604) 60,247
----------- -----------
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET
OF TAX 136,186 (107,106)
----------- -----------
COMPREHENSIVE INCOME $ 263,957 $ 136,288
-------------------- =========== ===========
Net income per share - basic and diluted $ 0.01 $ 0.01
=========== ===========
Weighted average number of shares outstanding
- basic and diluted 25,350,000 24,265,479
=========== ===========
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