AMERICAN BODY ARMOR & EQUIPMENT ANNOUNCES
THIRD QUARTER AND NINE MONTHS RESULTS
FERNANDINA BEACH, Fla., Nov. 13 /PRNewswire/ -- American Body Armor & Equipment, Inc. (NASDAQ: ABAEC), today announced financial results for the third and nine months ended Sept. 30, 1991.
Revenue for the quarter ended Sept. 30, 1991 increased by 36 percent to $4,334,658 compared to $3,188,444 recorded for the same quarter in the previous year, resulting in a net loss for the quarter of $141,339, or $0.04 per share compared to net income before extraordinary items of $74,400 or $0.03 per share for the same period a year ago.
The third quarter loss resulted from price increases on raw materials used in production of bullet-resistant vests coupled with sales prices for products sold based upon pre-price increase sales quotes or contracts. Additionally, a substantial part of the increased sales in the quarter related to large export sales, which were subject to agent commissions that are higher than commissions paid on domestic sales.
The company is in the process of instituting changes aimed at reducing product costs through better utilization of materials. Additionally, the company anticipates that many of the sales quotes based upon pre-price increase of material costs have been completed and that contracts being honored based upon pre-price increase quotes are near completion and will be completed prior to Jan. 1, 1992.
For the nine month period ended Sept. 30, 1991, revenues increased by 35 percent to $12,032,225 from $8,887,745 for the 1990 period. Net loss for the nine month period ended Sept. 30, 1991 was $4,493,553 or $1.53 per share.
The results for the nine month period ended Sept. 30, 1991 were negatively affected by a loss of $4,576,509 reported in the second quarter. The second quarter loss included a $1.56 million loss from operations before interest expense and unusual charges of $2.9 million. The second quarter operating loss resulted primarily from the company's decision not to fill an order for a Middle East country until payment had been received for an order shipped to that country in the first quarter.
The unusual charge of $2.9 million recorded in the second quarter of 1991 occurred in connection with mangement's review of the company's products and marketing strategies such review led to the determination that certain assets should be written down in the amount of $785,701. Part of this write down applies specifically to inventories purchased during the second quarter of 1991 in anticipation of additional orders to a certain middle eastern government. In connection with changes in the company's senior management which occured in June 1991 a reserve for severance and other related expenses was set up amounting to $245,730. Management does not expect such expenses to recur. Furthermore, the company set up an additional reserve in connection with the proposed Federal Trade Commission (FTC) Consent Agreement of $1.45 million.
Commenting on the results, Hugh Downe, chairman and chief executive officer of ABA, stated, "The results for the third quarter represent the first step of the company's return to profitability and provide an indication that actions taken in the second quarter are beginning to positively impact the company's operations. Management, the board of directors and the Downe Acquisition Group are confident that ABA'a potential remains significant and we are committed to making ABA the leading manufacturer and distributor of bullet-resistant vests, ballistic armor and armored vehicles in the world."
Effective Oct. 25, 1991, the company's symbol on the NASDAQ stock market was changed from ABAE to ABAEC. This change denotes that the company's listing on the NASDAQ stock exchange is conditional and results from being granted a temporary exception to paragraph 1 (c)(3) of Part II of Schedule D of the NASDAQ By-laws requiring a minimum tangible net worth of $375,000. This exception requires the company to file a progress report on the company's private stock placement with NASDAQ by Nov. 15, 1991.
American Body Armor & Equipment, Inc. is the oldest manufacturer of soft body armor in the United States, incorporated in 1969. American Body Armor products include concealable soft body armor, armored vehicles, EOD equipment and bomb suits, ballistic guard houses, armored aircraft components and high speed patrol boats. The company's products are sold primarily to military, government and law enforcement agencies, nationally and internationally.
/CONTACT: Doug Goin of American Body Armor & Equipment, Inc., 904-261-4035/
(ABAEC) CO: American Body Armor & Equipment, Inc. ST: Florida IN: SU: ERN AW-MR-JJ -- FL003 -- 3968 11/13/91 12:58 EST