TVI Corporation Reports Second Quarter 2007 Financial Results.

GLENN DALE, Md. -- TVI Corporation (NASDAQ: TVIN), a global supplier of first receiver and first responder products and provider of event shelter and equipment rentals, today announced its financial results for the quarter and six months ended June 30, 2007.

Second-Quarter 2007 Results

* Revenue was $12.5 million, an increase of 71.3% compared with $7.3 million for the second quarter of 2006.

* Gross profit margin was 9.1%, compared with 51.8% for the second quarter of 2006.

* Operating loss was $5.1 million, compared with operating income of $306,000 for the second quarter of 2006.

* Net loss was $14.8 million, or $(0.44) per share, compared with net income of $228,000, or $0.01 per diluted share, for the second quarter of 2006. Net loss for the second quarter of 2007 includes a non-cash goodwill impairment charge of $12.0 million, or $(0.36) per share, related to the Company's November 2005 acquisition of Safety Tech International, Inc. (STI).

* Cash and short-term investments totaled $136,000 as of June 30, 2007, compared with $4.2 million as of December 31, 2006.

* Borrowings under the credit facility totaled $24.9 million as of June 30, 2007, compared with $26.7 million as of December 31, 2006.

Six-Month 2007 Results

* Revenue was $26.8 million for the six months ended June 30, 2007, an increase of 61.8% compared with $16.6 million for the first six months of 2006.

* Gross profit margin was 13.8% for the six months ended June 30, 2007, compared with 51.6% in 2006.

* Operating loss was $9.0 million for the six months ended June 30, 2007, compared with operating income of $2.2 million for same time period in 2006.

* Net loss for the first six months of 2007, which includes the previously mentioned non-cash goodwill impairment charge, was $17.4 million, or $(0.52) per share, compared with net income of $1.4 million, or $0.04 per diluted share, for the first half of 2006.

Comments on Second-Quarter

"During the second quarter, we continued the process of reorganizing, reestablishing and restructuring TVI's business operations to capitalize on the opportunities we see for our products and services," said General Harley A. Hughes, TVI's President and Chief Executive Officer. "This quarter's results include a number of charges outside the ordinary course of business, such as the goodwill impairment, that are reflective of that process. In addition, we experienced lower margins due to decreased sales in the shelter and personal protection business lines, coupled with pricing and cost discipline issues within our rental services business. Despite these challenges, we made considerable progress executing our turnaround initiatives. With a strengthening infrastructure and a renewed focus, we will be better positioned to address the markets we serve."

"In our shelter and related products business, we are rebuilding relationships with our channel partners and have filled all outstanding vacancies in our sales team with experienced industry professionals," Hughes said. "In our personal protection equipment business, we are reestablishing our OEM presence, which has been a source of higher margin revenue for STI in the past and was not adequately penetrated in recent quarters. In addition, we are implementing pricing and cost management disciplines within our SSES business that should help us to realize better gross margins in that business going forward. Despite the near-term issues with SSES, we continue to view this business as a positive long-term addition to TVI."

"During the second quarter, we determined that our former management's financial expectations used to value goodwill associated with STI were no longer valid. We believe that former management's financial projections of STI's performance were based on a transition of the personal protection equipment segment from an OEM to a distribution sales model, which was not well planned or executed. After a full assessment by an independent valuation specialist, taking into account updated financial projections based on known or foreseeable business, we elected to reduce our goodwill by $12 million and took a corresponding non-cash impairment charge to the quarter's income statement," Hughes said.

Appointment of CEO 

In a separate press release issued this morning, the Company announced that its board of directors has named Harley Hughes as its President and Chief Executive Officer. Hughes was appointed Interim President and Chief Executive Officer in April 2007.

"I am enthusiastic about TVI's prospects and encouraged by the dedication and hard work I see from our employees," said Hughes. "While we still have many challenges ahead to return TVI to profitability, we believe that we have made substantial progress to date toward turning the Company around."

Business Outlook

"From an operational perspective, we continue to focus on executing our turnaround plan. In addition to implementing longer-term initiatives, we continue to capitalize on short-term opportunities and reduce ongoing expenses, as well as costs incurred in addressing certain ineffective prior business practices. From a financial perspective, we continue to maintain a strong cooperative relationship with our bank and we have entered into a longer-term amendment to our credit agreement that we believe will give us the flexibility to work through this transition. We continue to work with our bank toward the restructuring of our credit facility," Hughes concluded.

Conference Call Information

TVI's management will host a conference call today at 10:00 a.m. EDT. To participate in the call please dial [phone] or [phone]. To listen to the live webcast, visit the Company's website at www.tvicorp.com prior to the event's broadcast. Interested parties unable to listen to the live call may access an archived version of the webcast on TVI's website.

About TVI Corporation

TVI Corporation, located in Glenn Dale, Maryland, is a global supplier of first receiver and first responder products. These products include shelters, personal protection equipment and other products for homeland security, hospitals, the military, police and fire departments, and public health agencies. The Company designs, fabricates and markets products and systems both through distributors and directly to end-users and OEMs. Through its Signature Special Event Services business, TVI is now the leading full-service shelter and event equipment rental company serving the corporate, sporting, social, and government and defense industries.

The TVI designation is a trademark of TVI Corporation. All other company and product names mentioned above are trade names and/or trademarks of their respective owners. For more information concerning TVI, please visit the Company at: www.tvicorp.com. This reference to the TVI website is an active textual reference and the contents of the site are not part of this press release.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

Certain information contained in this press release constitutes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and involves expectations, beliefs, plans, intentions or strategies regarding the future. These statements may be identified by the use of forward-looking words or phrases such as "should", "anticipates", "believes", "expects", "might result", "estimates" and others. These forward-looking statements are based on information available to TVI as of the date hereof and involve risks and uncertainties and are not guarantees of future performance, as actual results could differ materially from our current expectations. Such risks and uncertainties include actions of our lender, our ability to comply with bank covenants and debt repayment obligations and our ability to obtain future financing on satisfactory terms; achieving the intended benefits of our acquisitions and integrating the operations, technologies, products and services of those businesses; achieving order and sales levels to fulfill revenue expectations; unanticipated costs or charges; our ability to meet the requirements of the NASDAQ Capital Market for continued listing of our common stock; adverse consequences from any government investigations, lawsuits or private actions; our ability to manage growth should it occur; general economic and business conditions; adverse changes in governmental regulations; the possibility that our products contain unknown defects that could result in product liability claims; and competitive factors in our markets and industry generally. Numerous other factors could cause or contribute to such differences, including, but not limited to, those set forth in the Company's Annual Report to Stockholders, periodic reports, registration statements and other filings made with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of the press release. We assume no obligation to update any such forward-looking statements, whether as a result of new information, future events or otherwise.

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