Defense Industries International Reports Third Quarter 2005 Financial Results.ASHKELON Ashkelon: see Ashqelon, Israel. , 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. -- 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, announced yesterday its financial results for the third quarter and the nine-month period ended September September: see month. 30, 2005. For the third quarter of 2005, the Company reported revenues of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.0 million, compared with revenues of approximately $3.2 million in the third quarter of 2004, a decrease of 37.4%. The decrease is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the decrease in export sales resulting from the general industry decline in sales of bullet-resistant vests. Gross profit for the third quarter of 2005 declined 53.9% to $531,405 compared with $1,153,412 for the comparable quarter in 2004. The decrease in gross profit is mainly attributable to the decrease in sales. Selling expenses remained substantially consistent in both periods with expenses of $224,941 during the three months ended September 30, 2005 compared to $222,231 for the same period in 2004. General and administrative expenses for the three months ended September 30, 2005 increased to $431,620 from $367,941 for the same period in 2004. This increase is mainly a result of the growth in professional fees and additional expenses due to the acquisition of Owen Mills. Net loss for the third quarter of 2005 was $55,542, or $0.00 per share compared with a net income of $249,408 for the third quarter of 2004. Net revenues for nine months ended September 30, 2005 decreased slightly to $9,584,813 from $9,753,915 in the same period in 2004. The decrease is primarily attributable to the decline in sales of bullet-resistant vests. Net income for the nine months ended September 30, 2005 totaled $232,809 or $0.01 per share compared with $681,742 or $0.03 per share for the comparable period in 2004. 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: "Our third quarter results reflect the general decrease in sales of bullet-resistant vests in the market. This trend results from new requirements of the 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 NIJ Noun 1. NIJ - the law enforcement agency that is the research and development branch of the Department of Justice National Institute of Justice Department of Justice, DoJ, Justice Department, Justice - the United States federal department responsible for for certifying new bullet-resistant vests, due to recent performance problems of body armor Noun 1. body armor - armor that protects the wearer's whole body body armour, cataphract, coat of mail, suit of armor, suit of armour armet - a medieval helmet with a visor and a neck guard models that contain Zylon
v. 1. To obtain or receive from a source. 2. To produce or obtain a chemical compound from another substance by chemical reaction. from bullet-resistant vests, the general decline in sales of bullet-resistant vests caused a decline in our total revenues this quarter. "Our strategy of capitalizing on our significant research and development capabilities and the strength of our brand identity remains unchanged. Despite the current decline in the bullet-resistant market, we believe that the demand for our products will continue to grow in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. . We are ready to address this growth by offering a comprehensive array of high quality branded security products to meet the needs of our world-wide customer base. "We also plan to enhance our leadership position in the industry through potential strategic acquisitions and by creating a broad portfolio of products and services to accommodate our customers' increasingly complex security products needs. Looking forward, we remain focused on increasing revenues and delivering profitability. We believe that our core capabilities and expertise in our markets, broad customer base and diverse product offering position us for long-term growth." About Defense Industries International, Inc. Defense Industries International, Inc. is a leading manufacturer and global provider of personal military and civilian protective equipment and supplies. Defense Industries' main products include body armor, bomb disposal suits and bullet-resistant vests and jackets; ballistic bal·lis·tic adj. 1. a. Of or relating to the study of the dynamics of projectiles. b. Of or relating to the study of the internal action of firearms. 2. wall covers, helmets, plates and one-way one-way adj. 1. Moving or permitting movement in one direction only: a one-way street. 2. Providing for travel in one direction only: a one-way ticket. protective windows; personal military equipment, battle pouch pouch (pouch) a pocket or sac. abdominovesical pouch one formed by reflection of the peritoneum from the abdominal wall to the anterior surface of the bladder. units and combat harness harness, comprehensive term for the gear of a draft animal, excluding the yoke, by which it is attached to the load that it pulls. Although harnesses are used on dogs (for drawing travois and dogsleds), on goats, and sometimes on oxen, the typical harness is for units; dry storage units, liquid logistics Liquid Logistics is a special category of logistics that relates to liquid products, and is utilized extensively in the "Supply Chain for Liquids" discipline. Standard logistics techniques are generally used for discrete or unit products. , tents and vehicle covers; winter suits, sleeping bags and backpacks. The Company's manufacturing facilities meet American EQNET EQNET Earthquake Information Network and international ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 standards. Main 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. The Company has two main subsidiaries Export Erez Erez (Hebrew: ארז, meaning cedar) is a common Israeli given name. The following people are named Erez:
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 update such statements to reflect events that occur 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 that exist after the date on which they were made.
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
ASSETS
September December
30, 2005 31, 2004
----------- ----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 656,927 $ 505,013
Accounts receivable, net of allowance for
doubtful accounts of $132,200 and $105,927,
respectively 2,265,375 2,495,861
Accounts receivable - related parties, net 509,336 374,458
Inventories 2,544,483 2,809,019
Investments in marketable securities held for
trading 729,316 808,102
Deferred taxes 56,790 43,049
Other current assets 448,870 402,325
----------- ----------
Total Current Assets 7,211,097 7,437,827
----------- ----------
PROPERTY, PLANT AND EQUIPMENT, NET 1,973,114 1,761,842
----------- ----------
OTHER ASSETS
Deposits for the severance of employer-employee
relations 417,070 483,334
Deferred taxes, long-term 47,447 60,326
Intangible assets, net 22,020 31,337
Goodwill 80,900 -
----------- ----------
Total Other Assets 567,437 574,997
----------- ----------
TOTAL ASSETS $ 9,751,648 $9,774,666
=========== ==========
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
September December
30, 2005 31, 2004
----------- ----------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 872,888 $1,026,162
Accrued expenses 224,278 490,236
Short-term debt 531,738 652,913
Current portion of long-term debt 839,808 407,227
Common stock to be issued 40,000 -
Other current liabilities 411,395 516,723
----------- ----------
Total Current Liabilities 2,920,107 3,093,261
----------- ----------
LONG-TERM LIABILITIES
Long-term portion of debt 923,897 731,442
Provision for the severance of employer-
employee relations 283,059 336,101
Common stock to be issued 120,000 -
Minority interest 912,645 902,771
----------- ----------
Total long-term Liabilities 2,239,601 1,970,314
----------- ----------
TOTAL LIABILITIES 5,159,708 5,063,575
----------- ----------
COMMITMENTS AND CONTINGENCIES
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, 25,386,463 and 25,350,000
issued and outstanding, respectively 2,538 2,535
Additional paid-in capital 1,751,447 1,711,450
Deferred private placement costs (130,000) -
Retained earnings 3,381,759 3,148,950
Accumulated other comprehensive loss (413,804) (151,844)
----------- ----------
Total Shareholders' Equity 4,591,940 4,711,091
----------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,751,648 $9,774,666
------------------------------------------ =========== ==========
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
--------------------------
For the For the For the For the
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 2005 30, 2004 30, 2005 30, 2004
----------- ----------- ----------- -----------
NET REVENUES $ 1,992,642 $ 3,181,111 $ 9,584,813 $ 9,753,915
COST OF SALES 1,461,237 2,027,699 7,223,841 6,779,737
----------- ----------- ----------- -----------
GROSS PROFIT 531,405 1,153,412 2,360,972 2,974,178
----------- ----------- ----------- -----------
OPERATING EXPENSES
Selling 224,941 222,231 603,751 613,587
General and
administrative 431,620 367,941 1,389,667 1,051,530
----------- ----------- ----------- -----------
TOTAL OPERATING
EXPENSES 656,561 590,172 1,993,418 1,665,117
----------- ----------- ----------- -----------
INCOME (LOSS) FROM
OPERATIONS (125,156) 563,240 367,554 1,309,061
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
Financial income
(expense), net (11,286) (47,787) (46,723) (110,582)
Other income
(expense), net 39,763 (39,947) 104,475 18,960
----------- ----------- ----------- -----------
Total other income
(expense) 28,477 (87,734) 57,752 (91,622)
----------- ----------- ----------- -----------
INCOME (LOSS)
BEFORE INCOME
TAXES (96,679) 475,506 425,306 1,217,439
Income tax (expense)
benefit 28,569 (212,583) (153,460) (496,284)
----------- ----------- ----------- -----------
INCOME (LOSS)
BEFORE MINORITY
INTEREST (68,110) 262,923 271,846 721,155
Minority interest
(income) loss 12,568 (13,515) (39,037) (39,413)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (55,542)$ 249,408 $ 232,809 $ 681,742
----------- ----------- ----------- -----------
OTHER COMPREHENSIVE
INCOME (LOSS)
Foreign currency
translation gain
(loss), net of
minority interest
portion (8,145) 6,275 (242,712) (82,618)
----------- ----------- ----------- -----------
Other comprehensive
income (loss) before
tax (8,145) 6,275 (242,712) (82,618)
Income tax (expense)
benefit related to
items of other
comprehensive income
(loss) 2,994 (2,196) 89,066 28,916
----------- ----------- ----------- -----------
TOTAL OTHER
COMPREHENSIVE
INCOME (LOSS), NET
OF TAX (5,151) 4,079 (153,646) (53,702)
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME
(LOSS) $ (60,693)$ 253,487 $ 79,163 $ 628,040
=========== =========== =========== ===========
Net income (loss) per
share - basic and
diluted $ --- $ 0.01 $ 0.01 $ 0.03
=========== =========== =========== ===========
Weighted average
number of shares
outstanding - basic
and diluted 25,386,463 25,350,000 25,370,970 25,350,000
=========== =========== =========== ===========
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