GVI Security Solutions, Inc. Announces Results for Second Quarter FY 2004.CARROLLTON, Texas Carrollton is a city in Texas, partially in Dallas County, partially in Denton County, and partially in Collin County. As of 2005, census estimates the city's total population to be 122,699.[1] Carrollton is a suburb of Dallas. -- GVI GVI Global Vision International (UK) GVI Giga Virtual Instrument GVI Global Vegetation Index GVI Google Videos (file extension) GVI Georgia Ventures Inc. Security Solutions, Inc. (Pink Sheets:GVIS) today reported the financial results for the second quarter ended June 30, 2004. Revenue for the three months ended June 30, 2004 was $14.9 million, an increase of 16.9% compared to revenue of $12.8 million for the three months ended June 30, 2003. The revenue growth was attributable to increases in sales across the range of GVI's products as well as the introduction of several new products manufactured by both Samsung Electronics Samsung Electronics (SEC, Hangul:삼성전자; KSE: 005930, KSE: 005935, LSE: SMSN, LSE: SMSD) is a South Korean multinational corporation and the world's largest and leading electronics and information technology company. and other manufacturers, and distributed by GVI. Gross profit increased to $2.2 million, or 10.0%, from $2.0 million in the prior-year quarter. This translates to a gross margin of 14.5%, compared with 15.8% in the second quarter of fiscal 2003. In the second quarter of fiscal 2004, GVI's selling, general and administrative expenses more than doubled. As a result, the Company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $(1.8) million, compared to an 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 $0.5 million in the prior-year quarter. This loss was primarily due to increased salaries and wages associated with additional hires, staffing the new Enterprise Solutions Group, cost associated with the refinancing Refinancing An extension and/or increase in amount of existing debt. of GVI's working capital facility, and the addition of a $5 million term loan note. Additionally, in the second quarter of fiscal 2004 GVI has incurred costs associated with being a public company of $0.3 million. As a result of these items, the Company posted a net loss of $(1.4) million, or $(0.05) per fully 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 for the 2004 second quarter, compared with a net income of $0.5 million, or $0.02 per fully diluted share, for the three months ended June 30, 2003. Excluding one time cost associated with the refinancing and being a public company, the net loss for the period would have been $(1.1) million. Revenue for the first six months of 2004 increased 31.7% to $30.0 million, compared to $22.8 million in the same period last year. Net loss for the first half of 2004 was $(1.6) million, or $(0.06) per fully diluted share, compared to a net income of $0.8 million, or $0.03 per fully diluted share, in the same period last year. "During the second quarter to fiscal 2004, our primary focus was on establishing GVI in the market, and building a strong foundation for the future growth," said Nazzareno Paciotti, Chief Executive Officer of GVI Security Solutions. "On May 27, 2004, we closed a $15 million convertible debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay with Laurus Master Fund, Ltd. under which we were provided with a $5 million term loan and a $10 million accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying loan facility. "With a pipeline of pending prospects for our surveillance solutions and growing demand for advanced security products, GVI is well positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. today's needs of homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States industry," concluded Nazzareno Paciotti. About GVI Security Solutions, Inc.: GVI Security Solutions, Inc. is a provider of complete video surveillance and security solutions incorporating a complete line of video surveillance, access control and detection systems to the homeland security, professional, business-to-business and retail market segments. The Company is the exclusive distributor of video surveillance products for Samsung Electronics in North, Central and 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. . We also distribute other security products such as digital recording, software systems and networking products. GVI's board and senior management have decades of high-level experience in the security and law enforcement community. The Chairman of the Board is Howard Safir Howard Safir (born 1941 in the Bronx, New York) was New York City Fire Commissioner from 1994 to 1996 and New York City Police Commissioner from 1996 to 2000. Safir was appointed New York City's 29th Fire Commissioner of the City of New York by Mayor Rudolph W. , former New York City Police Commissioner The New York City Police Commissioner is the head of the New York City Police Department, appointed by the Mayor of New York City. Governor Theodore Roosevelt, in one of his final acts before becoming Vice President of the United States in March 1901, signed legislation replacing . Some of the statements made by GVI Security Solutions, Inc. in this press release are forward-looking in nature. Actual results may differ materially from those projected in 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. . GVI Security Solutions, Inc. believes that its primary risk factors include, but are not limited to: reliance on primary supplier; outstanding indebtedness; reliance on a primary retailer for sales through the retail channel; effective integration of recently acquired operations and personnel; expansion risks; effective internal processes and systems; the ability to attract and retain high quality employees; changes in the overall economy; rapid change in technology; the number and size of competitors in its markets; law and regulatory policy; the mix of products and services offered in the company's target markets; and other factors detailed in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-KSB for the year ended December 31, 2003 currently on file.
GVI SECURITY SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Predecessor Predecessor
Business Business
Revenues $14,936 $12,782 $30,023 $22,799
Cost of Revenues 12,771 10,766 25,338 18,988
Gross Profit 2,165 2,016 4,685 3,811
Selling, General And
Administrative Expenses 3,947 1,531 6,754 2,973
Operating Income (Loss) (1,782) 485 (2,069) 838
Interest Expense (116) (51) (204) (109)
Income (Loss) Before Taxes (1,898) 434 (2,273) 729
Income Tax Expense (Benefit) (527) (48) (633) (48)
Net Income (Loss) $(1,371) $482 $(1,640) $777
Income (Loss) Per Share
Basic $(0.05) $0.02 $(0.06) $0.03
Diluted $(0.05) $0.02 $(0.06) $0.03
Shares Used In Calculation
Of Net Income (Loss) Per Share
Basic 29,604 28,372 29,604 28,372
Diluted 29,604 28,383 29,604 28,383
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